Devolution 2.0

Some within higher education dismiss the implications of devolution for universities.

There are no proposals yet to devolve control of the large majority of income that will be directed to universities over the foreseeable future. Policies on tuition fees, funding for research and wider tax rules will continue to be managed nationally on an aspatial basis.

Critics point to the relatively limited scope of those devolution deals already agreed. Historic boundary disputes in some places are now in a new stalemate.

Others point to growing resistance within central departments, from local politicians in a growing number of places now openly resistant to directly elected Mayors, and from some potentially side-lined MPs keen not to vote for their own Christmas.

Devolution deals

But devolution and a wider importance of place has already had a real impact on higher education.

It was little surprise that the first wave of Science and Innovation Audits in England headed to the North and the Midlands.

Long-term guarantees from Government of £30 million and more per annum in each agreed Devolution Deal will be used as security to draw down new investment funds of up to £1 billion.

This money isn’t new and it has had to come from somewhere. See the big cuts in the last Spending Review for the capital budget of the Department for Business, Innovation and Skills.

Localised business rates

The radical (and difficult to implement) proposal to localise 100 per cent of business rates may well see new proposals for further devolution of funding, and even, the beginnings of fiscal devolution. It will certainly bring existing university discounts on business rates into the sharp focus of finance directors of near bankrupt local councils.

Will we see confrontation or local partnerships involving universities taking a more integrated approach to strategic planning of the necessary finance for important investments?


A few more deals are expected but Government may now wish to take a breath to see how these are implemented. But in less than a year it will be faced with at least 9 more directly elected Mayors, each with a large electoral mandate and the need to secure more new powers and finance.

Each will be a focal point for communication between Government and local partners.

How can universities organise themselves to better ensure these new Mayors understand and represent the many different roles and needs of higher education?

But the trend is clear. Ministers in HM Treasury are now talking about what new funds could be devolved in Northern Powerhouse Phase 2.

Longer term, a Government that believes in the smaller (national) state may force central departments with diminishing capacity to let go. Nor is there any need for any new legislation.

The Cities and Devolution Act is remarkably permissive and enabling. It allows future Secretaries of State a fast parliamentary track to devolve theoretically unlimited powers, functions and money.

Universities will do well to watch and prepare for both matches – taking each game as it comes.