Balancing the incentives in English higher education: the imperative to strengthen civic influence for levelling up

ABSTRACT The UK government’s levelling up strategy is the latest attempt to address the nation’s spatial inequalities. This issue has been amplified by voting in the 2016 referendum to leave the European Union, within which people in places with lower levels of educational qualifications and wages demonstrated their desire for change. These places have been characterised as ‘left behind’ by the pursuit of a knowledge economy fuelled by university expansion and mobile labour. The article explores how the specific policies adopted to support university expansion in England have influenced spatial inequalities and the political motivation for levelling up. It then describes how universities are recognised within the diagnosis of spatial inequalities in the Levelling Up White Paper and the vision for addressing them, but not the strategy embodied in its prescription of missions. The article concludes by exploring how tertiary education systems can strengthen the civic influence on universities, and how this could inform future approaches to funding and regulation in England. This could balance the growing influence of national government and global market forces, which has been a feature of university expansion in England since the 1980s, and thereby position universities better for the imperative of levelling up.


Introduction: university expansion and spatial inequalities in England
The United Kingdom (UK) has high levels of spatial inequalities relative to similar countries (McCann, 2020).The UK government's Levelling Up White Paper ascribes this to the nation's particular exposure to de-industrialisation and globalisation, and the dependency of some places on a single source of trade and employment (HM Government, 2022, p. 67).This is associated with the historic strength and spatial concentration of the UK's industry, together with the policies of successive governments since the 1980s, notably their promotion of market forces ahead of industrial strategy (Hudson, 2013) and their veneration of a knowledge economy, with rewards for people and places with high levels of educational qualifications and mobility (Goodhart, 2017;Rodríguez-Pose, 2018;Sandel, 2020).
The UK's spatial inequalities are economic, driven by gaps in productivity and reflected in wages (Zymek & Jones, 2020), and they are social, reflected in levels of education, health and wellbeing (Joyce & Xu, 2019).As is clear from the 2016 referendum decision to leave the European Union (EU), discontent with the UK's spatial inequalities is also expressed through a desire for change (McCann & Ortega-Argilés, 2021).By committing to deliver on the referendum result, the Conservative Party has gained parliamentary seats in places across the industrial heartlands of the English north and midlands that voted to leave the EU (Cutts et al., 2020;House of Commons Library, 2020).These places, which tend to have lower levels of higher education participation and lower proportions of graduates (Hobolt, 2016), have been characterised as 'left behind' by the pursuit of a knowledge economy (MacKinnon et al., 2022;Martin et al., 2021;Sykes, 2018).
Universities argued collectively against leaving the EU (Mayhew, 2017;Mayhew, 2022) and graduates were less likely to vote for the Conservative Party in the 2019 general election (IPSOS Mori, 2019).Both the education and research missions of English universities rely on the global movement of people and knowledge, reflected in the profile of their students and staff, nearly a quarter of whom come from outside the UK (Higher Education Statistics Agency, 2023b, 2023d).Higher education is increasingly borderless worldwide, facilitated by formal collaborations such as the EU's ERASMUS and Horizon programmes, together with institutional partnerships and academic relationships, and continually increasing demand for higher education from students and their families (Marginson, 2016).In England, these ingredients have been accompanied by successive reforms to student finance and government funding, which have sustained increases to student participation and research investment by sharing a greater proportion of the cost of higher education with graduates (Department for Business Innovation andSkills, 2011, 2016;Department for Education and Skills, 2003).Different policies have been adopted in Scotland, Wales and Northern Ireland, but England's reforms have influenced patterns of higher education beyond its borders due to the size of its university sector, its centrality to the UK's global brand and the mobility of its staff and students (Riddell et al., 2016).
In 2003, there were 86,000 academic staff and 1.98 million students in English higher education, supported by an income of £14 billion, of which 25% was gained from tuition fees (Higher Education Statistics Agency, 2005a, 2005b).The latest higher education data shows income of £37 billion, 56% from tuition fees, which supports 194,000 academic staff and 2.43 million students (Higher Education Statistics Agency, 2023a, 2023b, 2023c).The benefits of this growth have not, though, been felt throughout the country.The proportion of students entering England's universities part-time and above the age of 21 reduced from 34% to 12% between 2008-2009 and 2019-2020, and the proportion entering part-time for a qualification below a full degree from 23% to 4% (Office for Students, 2021).As the system has expanded, universities have focused on bringing young students to their existing campuses for full degree qualifications, rather than establishing provision that responds flexibly to the needs of learners of all ages in places where there are low levels of higher education participation, which often requires collaboration with further education colleges in those places.This model has maximised the income to universities from tuition fees, residences and services by enabling the alignment of provision for domestic and international students, but it has limited the benefits of their expansion beyond their immediate localities.Places in England with universities and high proportions of graduates appear not only to have improved opportunities for their local populations during the last two decades, they have attracted highly skilled people and investment from other areas, leading to a concentration of highly skilled jobs and higher wages (Overman & Xu, 2022).
This pattern has been influenced by policies that have increased the reliance of England's universities on tuition fees for both their teaching and research, whilst promoting student choice and competition (McCaig, 2018).In a more competitive environment, there have been weaker incentives for universities to collaborate with each other and with further education colleges.University rankings have also become more influential due to their effect on the choices made by students and families about where and what to study.The most high profile university rankings encourage vertical stratification based on global research standing and academic entry requirements, rather than horizontal differentiation to meet the needs of local communities and employers (Hazelkorn, 2015;Locke, 2014).Rankings are more likely to reward universities for research with global corporates, regardless of the location in which they generate wealth, than partnerships to enhance the absorptive capacity of local SMEs for knowledge and skills.They also encourage national and international recruitment of students from selective and feepaying schools, rather than state schools and further education colleges in communities with low levels of educational qualifications and proportions of graduates in the workforce, which are the priority for levelling up.

Levelling up: diagnosis, vision and prescription
The government's approach to implementing the Levelling Up White Paper has evolved since its publication in February 2022, not least due to two changes in the Prime Minister during the year since.There is, nonetheless, a growing literature exploring the extent to which the measures proposed by the government can be expected to meet its ambitions (Bailey et al., 2023;Coyle & Muhtar, 2023;Fransham et al., 2023;Tilley et al., 2023).This work raises questions about the scope and scale of the funding and devolution that have been proposed, the capability and coherence of local institutions and central government departments, and the commitment to and effectiveness of local and national industrial strategies.It also positions current government policy in the context of previous UK regional economic development strategies, and the level and character of investment and infrastructure in other countries.A common concern is the degree of uncertainty about the definition of levelling up, which may relate to opportunities, experiences or outcomes, and be judged in economic, cultural or social terms.
In this climate of ambiguity, universities have been able to highlight diverse ways in which they can support the levelling up strategy (Atherton & Webb, 2022) and they have helped local areas secure funding for regeneration (House of Commons Library, 2023).There is, though, no basis yet for understanding their contribution as civic institutions attracting people and investment for their mutually reinforcing missions of education, research and knowledge exchange, nor how the co-ordinating mechanisms for higher education could facilitate this.There has been substantial research on the consequences of reforms to student finance and government funding in English higher education.This exposes how student choice and competition influence the perceptions, experiences and trajectories of students (Bunce et al., 2017;Tomlinson, 2017), the character of education and the values of universities (Naidoo, 2018;Tomlinson, 2018;Williams, 2012).It positions England's recent reforms within a longer (Hillman, 2013;Mandler, 2020;Patel, 2022) and global (Cantwell et al., 2018) trajectory of liberalisation, and it explores how universities are navigating the different imperatives for their work (Scott, 2021;Thrift, 2022).This article is, though, distinctive to the extent that it explores the interaction between the government's levelling up strategy and its regulation of higher education in England, and the broader lessons for governments wanting to harness the civic capabilities of their universities.
The characteristics and consequences of university expansion described earlier in this article mirror factors within the wider economy that are associated with spatial inequalities in the Levelling Up White Paper.This includes the tendency towards agglomeration as economies become increasingly knowledge-based, the benefits of this for growth overall, but also its consequences for spatial inequalities if people who do not go to university and places with low proportions of graduates are neglected.The White Paper states that: agglomeration and clustering effects are cumulative in successful places, as they serve as a magnet for people, business, finance and culture, locking them into a high growth equilibrium.The reverse forces operate in struggling places, repelling people, business, finance and culture and locking places into a low-growth equilibrium.The co-existence of self-reinforcing economic forces, in a rising number of places, explains the UK's widening geographic divides.(p.50) In countries experiencing 'a shift from heavy industry to knowledge-intensive industries' (p.xv), such as the UK, universities are perceived to be central to this: Clusters of industrial activity correlate with measures of economic value-added, illustrating their potency as drivers of skilled jobs, productivity and GDP in places.Often, they are found close to higher education (HE) institutions.(p. 53) This is identified as particularly influential if those institutions can demonstrate the characteristics of research intensity and student selectivity associated with global recognition, which attracts investment from 'partnering private companies' (p.39) who are interested in the commercialisation of new technologies, but is also reinforced by the migration of highly educated and highly skilled people, both within the UK and from outside.Overall, places with the highest existing stock of human capital tend to attract the largest numbers of skilled workers, both from within and outside the UK.(p.62) These patterns are considered to have 'benefited the UK overall, improving productivity, increasing wealth and driving up living standards through more innovation and competition', but 'while London and much of the South East have benefited economically, former industrial centres and many coastal communities have suffered ' (p. xv).The solution proposed within the White Paper is not a different vision for prosperity that is less reliant on universities, but the replication of conditions in places where there is already 'a virtuous circle of agglomeration … skilled people with high quality jobs and have access to outstanding schools and globally-competitive universities' (p.xvi).
The White Paper describes how the government can deploy its convening, influencing and co-ordinating powers to advance this model.National government requires fundamental reorientation 'to align policies with the levelling up agenda and hardwire spatial considerations' (p.xix) through 'a whole system' (p.111) approach.Previous attempts are considered to have 'lacked the clarity and commitment, coordination and empowerment' (p.114) to make a sustained difference.The prescription for addressing this is to 'precipitate systems change through cooperation' (p.119), with a focus on aligning mutually reinforcing capitalsphysical, human, financial, intangible, social, institutionalaround common missions in local areas across the country.
Twelve missions are identified within the White Paper.All of the missions may be considered to be influenced by universities, but they contribute most directly to those on education, skills and research.There is a mission to increase public investment in research and development outside the Greater South-East by at least 40% by 2030.For education and skills, there are missions for 90% of primary school children in England to achieve the expected standard in reading, writing and maths, and for 200,000 more people to complete high quality skills training by 2030 (p.xvii).Universities conduct a high proportion of research in England, so they are central to the research mission.They also contribute to the skills mission through their involvement in continuing professional development and they benefit indirectly from the qualified applicants flowing from the school mission.Undergraduate and postgraduate education are not, though, included within the missions, despite connecting together the schools, skills and research missions by providing pathways from schools and further education colleges into research careers and other areas of highly skilled employment.
Instead of convening and influencing universities to align all aspects of their activities with the levelling up strategy, the White Paper identifies market regulation as the co-ordinating mechanism for their work: The 2017 Higher Education and Research Act created the Office for Students (OfS), which made the process of becoming an HE provider more straightforward and allowed for the first time new providers to acquire degree awarding powers … The UK Government will continue to work with the OfS to reform barriers for entry to the English HE sector, so that new high quality HE providers can open across England.(p. 197) Reflecting patterns of demand, a high proportion of new higher education providers are based in London and they are responsible for only 5% of students and income in English higher education (Higher Education Statistics Agency, 2022, 2023c), so they are unlikely to make a significant contribution to levelling up other parts of the country.
The Act highlighted in the White Paper separates government oversight of higher education between its interests in education, which is regulated by the OfS, and research, which is funded by UK Research and Innovation (UKRI).The Regulatory Framework for Higher Education, which arises from the Act (Office for Students, 2018), applies the same regulatory conditions to all providers, regardless of their mission or location, with the aim of establishing baseline levels of quality and standards beyond which student choice and competition can determine the pattern of provision.Regulatory conditions take no account of the imperative for coherence with other areas of government investment in education and research, nor the needs of different local areas.Whereas further education and research funding can be re-balanced to support the levelling up strategy, the education of highly skilled graduateswho are needed to work in knowledge-based industries, build their absorptive capacity and attract other highly skilled people and investmentcannot.There is, therefore, no co-ordination across different areas of education and research policy, nor alignment with other areas of government policy, despite the imperative for this identified in the White Paper.
Higher education co-ordination in England: the advancement of national government and market forces Burton Clark's description of a 'triangle of co-ordination' provides a seminal theoretical framework for understanding the factors shaping the focus and character of higher education systems worldwide (Clark, 1983).The triangle positions national systems between three influences: academic oligarchy, state authority and market forces.Writing in the early 1980s, Clark situates the United States most closely to the market, he uses the examples of Sweden and France as systems shared between state and academic authority, and he identifies that 'Britain locates fairly closely to rule by academic oligarchy'.This is due to the influence of the UK-wide University Grants Committee (UGC) and subject-based Research Councils, which were led by senior academics and provided the majority of funding for universities at that time (Shattock, 2012).Since Clark's analysis, the state and market forces have become more influential.The state has, though, been redefined by the separation of the UGC into separate national higher education agencies in 1992, and by devolution of powers to the Scottish Parliament, National Assembly for Wales (now the Senedd) and their executives in 1998.This has enabled governments in Scotland and Wales to diverge from policy in England, placing less reliance on market forces without preserving their universities from global and UKwide competition.
In England, the major higher education policy changes during the last four decades have been characterised by the empowerment of national government in relation to universities and the mobilisation of market forces to shape their educational activities.Key measures during the 1980s and 1990s include the removal of public subsidy for international students, the replacement of the UGC by a Funding Council with stronger powers in relation to corporate governance and financial management, the establishment of teaching and research quality assessments, and the inclusion of locally governed polytechnics within unified national systems for admissions, funding and accountability, so they could provide greater competition for universities (G.Williams, 1997Williams, , 2004)).For a period in the 2000s, the Higher Education Funding Council for England (HEFCE) was encouraged to develop regional strategies through dialogue with Regional Development Agencies and University Associations.From 2010, however, this approach was replaced by measures to promote national competition, including the production and promotion of nationally comparable data on the experiences on and outcomes from different courses and institutions, the replacement of the majority of government teaching grant to universities with re-payable loans for tuition fees, and the removal of entry controls so that student choice and competition could determine the pattern of provision (Brown, 2011;Brown & Carasso, 2013;Hillman, 2014;Scott & Callender, 2013).Although these most recent reforms may be associated with market forces, they have been accompanied by increasing powers for the national government, embodied in the clear line of sight that has been established by the 2017 Higher Education and Research Act.For the educational activities of universities, this can be delivered through guidance and direction to the OfS, which has no duty to have regard to local imperatives, and for their research activities by the unification of the subject-based Research Councils within UKRI as a single accountable body (Department for Business, Energy and Industrial Strategy, 2018).This most recent strengthening of national influence on universities coincides with a reduction in their contribution to local regeneration activities due to their loss of access to the European Regional Development Fund (Highman et al., 2023).
The model of university expansion driven by national government and market forces can be associated with four assumptions, which have been shared by successive UK governments since the 1980s, but most actively promoted by those governing English higher education during the 21st to date.Firstly, that increasing student participation and research investment drives productivity and growth through the influence of graduates and research on new techniques and products in a knowledge economy (Brown et al., 2020;Holmes & Mayhew, 2016).Secondly, that the cost of university expansion can be minimised through increased student tuition fees if they are paid up-front by government loans with re-payment terms aligned with higher graduate earnings (Barr, 2016).Thirdly, that greater competition for students, secured through their empowerment as consumers and the introduction of new providers, improves responsiveness to students, their experiences and their outcomes (Willetts, 2019).Fourthly, that governments need actively to create the conditions for these assumptions to be delivered in practice through conditions and regulation attached to public funding, including publicly-backed loans (Palfreyman, 2014).
Government intervention has become stronger in England as the first three assumptions underpinning the higher education growth model have become increasingly exposed, demonstrable by low and spatially unequal rates of productivity growth (Conlon et al., 2023;McCann, 2023), the consolidation of university provision around an expensive campus-based full-time full-degree model for young students (Callender & Thompson, 2018), and the consequences of these patterns for public expenditure on student loans (Office for National Statistics, 2018).The current government's concerns about these issues, and indeed the culture of debate in universities (Adekoya et al., 2020), has been compounded by its low levels of support in universities and in places with high proportions of graduates, as described earlier in this article.
As a result, government guidance to the OfS has become increasingly frequent and prescriptive (Department for Education, 2022), yielding national thresholds for the level of graduate employment to be achieved for any course to receive public funding (Office for Students, 2022) and regulatory intervention on issues which extend beyond the rights and interests of students as consumers, such as free speech (Higher Education: Freedom of Speech Bill, 2023).These interventions are nationally determined, uniformly applied and conducted separately from other areas of policy influencing universities and the places in which they are located.They create the combination of geographyblind national policy and market forces that the Levelling Up White Paper itself associates with the UK's spatial inequalities problem.

Conclusion: strengthening the civic influence on universities for levelling up
Reforms to English higher education since the 1980s have been successful in facilitating the expansion of universities, attracting people and investment, and thereby increasing substantially the supply of graduates and research.These policies have not, though, encouraged universities to spread the benefits of their expansion, notwithstanding policy entrepreneurship to position themselves within strategies for local productivity and growth (Brown, 2016).
Given the influence of voters in areas with lower proportions of graduates on the 2016 referendum and its impact on their academic staffing, student recruitment and international collaborations, universities may now be increasingly motivated to build back support for their work by improving their civic contribution, both in the towns and cities where they are located and other places without higher education provision.The growth of Civic University Agreements (Civic University Network, 2023), which position universities to be publicly accountable for commitments in their local areas, may reflect this.For this movement to become embedded, however, it requires measures to balance the incentives in English higher education by strengthening the civic influence on universities, stimulating dialogue with local agencies, communities, businesses and public services, and a more collaborative approach to provision.
Most English universities are civic institutions, reflected in their origins and location in particular places (Whyte, 2016).Their high profile and size, relative to many other local organisations, arises from their whole institition combination of education, research and knowledge exchange activities, through which they advance, communicate and deploy knowledge within a single institution (Goddard et al., 2016).The alignment of research and knowledge exchange with undergraduate and postgraduate education creates the potential not only to improve the supply of highly educated people in local areas, but also the demand for and utilisation of their knowledge and skills through innovations to products and processes.It can be particularly powerful if provision is steered towards subjects that are demonstrably important for productivity and growth, and if university engagement can enhance the absorptive capacity of local SMEs (Finegold, 1999;Keep, 2022;Keep & Mayhew, 2014;Stansbury et al., 2023).
This could be crucial for bridging from the input measures identified within the Levelling Up White Paper missions, which are associated with increases to investment, qualifications and training, to their intended outcomes, which extend from improvements to productivity, pay, jobs and living standards, and the creation of opportunities and improved public services.The Levelling Up White Paper mentions the whole institution contribution of universities to their local areas, stating that: HE institutions have a vital part to play in supporting regional economies, as significant local employers and through their role as anchor institutions supporting regional collaboration.(p. 197) It also highlights the government's £50,000 investment in the civic university movement across the UK (Civic University Commission, 2019), which is informed by evidence and insights on the character and contributions of universities to their local areas worldwide (Kempton et al., 2021;Organisation for Economic Cooperation and Development, 2007).This is not, though, a meaningful intervention compared with the £20 billion tuition fee income generated annually by England's universities, which is more influenced by national and international regulatory and reputational standing than local needs.
Table 1 demonstrates the imperative to shift the balance of incentives towards civic influence by adding to the description of research, skills and education missions in the Levelling Up White Paper an account of the potential contribution universities could make as whole institutions working collaboratively with local partners.
As higher education participation increases, governments concerned minimise cost, diversify provision and improve productivity returns are increasingly exploring tertiary systems that bring universities together with technical and vocational education.Mirroring developments in countries such as New Zealand, Norway and Ireland, the governments in Scotland and Wales are now aligning their oversight of higher education with For increased R & D investment to boost productivity, pay, jobs and living standards as intended, there is a need to enhance capability for the conduct of research in universities and partner organisations, and absorptive capacity among local communities, businesses and public services.This requires local people to be able to develop higher level knowledge and skills through studies in further and higher education, both for entry into research jobs and the broader management, commercial, legal and technical roles associated with the translation of research into new products and processes.
Spread opportunities and improve public services, especially in those places where they are weakest Education By 2030, the number of primary school children achieving the expected standard in reading, writing and maths will have significantly increased.In England, this will mean 90% of children will achieve the expected standard, and the percentage of children meeting the expected standard in the worst performing areas will have increased by over a third.
For improvements to basic education and skills training to spread opportunities and improve public services as intended, young people need to be able to progress through secondary, further and higher education into highly skilled jobs in local businesses and public services.This requires coherent pathways to be developed through collaboration between schools, further education colleges, universities and employers, and measures to build not just the supply of educated people but also the demand for and utilisation of their knowledge and skills.further education, adult learning and apprenticeships (Scottish Funding Council, 2021; Tertiary and Research (Wales) Act, 2022).These developments balance the individual and institutional interests embodied in student choice and competition by promoting collaboration and coherence in response to local and national priorities (Hazelkorn, 2016;Shattock & Horvath, 2020).Tertiary systems seek to encourage universities to collaborate with technical and vocational colleges and employers by joining up the funding and regulation of research, higher education and skills.They position universities to extend their presence to places that may be 'left behind' by their expansionthe towns, rural and coastal areas in which colleges and employers tend to be more connected and influentialand provide a platform for building demand for knowledge and skills, not just their supply.It remains unclear how deeply the agencies now overseeing tertiary education and research in Scotland and Wales will seek to integrate funding, regulation and institutions across their systems.Universities will, regardless, remain significantly influenced by market forces due to their reliance on tuition fee income from students recruited from England and other countries.There may be concerns that the higher cost of teaching and long timeframe for research in universities will make them a lower priority for investment, and they may be cautious about collaborating with each other and with further education colleges during a period of real terms financial reductions.Scotland, Wales, New Zealand, Norway and Ireland are, nonetheless, comparable in population size to the Mayoral Combined Authority areas to which powers and funding are now being devolved in England, so they have the potential to provide learning on approaches that could be adopted for aligning universities more closely with the imperative of levelling up.
A new devolution settlement has been announced for the Mayoral Combined Authority in the North East of England (Department for Levelling Up, Housing and Communities, 2022) and more substantial freedoms for those in Greater Manchester and the West Midlands (Department for Levelling Up, Housing andCommunities, 2023a, 2023b).Universities have also become more centrally positioned within the government's approach to incentivising investment in local areas (Department for Levelling Up, Housing and Communities & HM Treasury, 2023), with the expectation that local partnerships of universities, businesses and public services will align their research and innovation priorities with those for education and skills.If there is further devolution in England and this is aligned with local democratic accountability, as both of the major political parties have promised (Commission on the UK's Future, 2020), there is the potential for a new settlement for higher education co-ordination.
Any new settlement for higher education in England is unlikely to involve devolution of funding and regulation to bodies comparable to the tertiary agencies in Scotland and Wales, not least given the size of the English system, limited institutional expertise and capability at the local level, the asymmetrical character of devolution to date, and the confidence that flows to students and investors from national oversight of quality, governance and financial sustainability.There is, though, scope to reduce the focus of national oversight to these core accountabilities and to replace obligations that have recently been added by national government with a duty to engage actively with and have regard to priorities at the Mayoral Combined Authority level.These priorities could be shaped by a Tertiary Education and Innovation Board in each area where powers and funding have been devolved and there is sufficient capability.These Boards could define the priorities in their local areas, but also commission solutions and review progress in relation to them, delivered through their own single pots of funding and planning responsibilities, together with a partnership approach to analysis and investment with national funders and regulators.
These changes could give voice to the civic origins and purpose of England's universities by situating their national and international interests alongside meaningful incentives for local agency, bridging across all aspects of their work.In doing so, they could build universities not just into the government's diagnosis of spatial inequalities and its vision for levelling up, but also its prescription for achieving it.

Table 1 .
An analysis of civic university contributions to the levelling up research, schools and skills missions, adapted from Table2.1 of the Levelling Up White Paper (p. 150).