Our New Forms of Funding workshops showed that the widening range of sources of investment finance for local growth is becoming more important and complex.
Universities need the right managerial and specialist capacity, especially when they engage with other ‘anchor’ institutions.
1. Getting the scope right
New forms of finance are available for local growth activities and the core functions of teaching, research (and now, increasingly for student housing).
It is easy to see a particular type of funding as being suitable for one purpose but not another.
But the move away from standalone projects towards more strategic programmes with mixed application, means it may be appropriate to think of the different funding sources as working together, albeit accounted for separately.
2. Partners? Who’d have them?
Individual institutions can continue to work alone where this makes sense. But greater devolution, decentralised fiscal policy – with its current focus on proposals for taxes on business properties – makes the case for stronger or new collaborative partnerships.
Combined and local authorities are a ready connection, not least because of their land holdings and planning powers. They also have a role in leveraging cheap capital finance, especially if it can be secured against localised business rates.
Local NHS institutions might not look like obvious partners. Still, a potentially radical transformation of the health service infrastructure appears to be underway, and, of course, many hospitals are deliberately located near to universities.
A new development programme for one sector at the exclusion of the others would not make much sense.
3. Nation or region?
The performance of land prices, commercial property markets and, of course, local economies, differ markedly across the country. Land that increases in value overnight in London may have a negative value elsewhere.
The skills needed to make both ready for investment are very different. But an approach that is too geographically fixed loses important opportunities to transfer best practice and innovative approaches from one place to another.
4. Working with the private sector
A small number of universities already have the managerial and technical capacity they need for successful local growth. Others are not yet at that stage.
Even the most capable need to contract with professional service firms in some way at some point in the development process. These private firms appear willing to contribute on a pro bono basis to a development programme. It’s in their interests to build ‘savvier’ clients.
But when does support provided free of charge end, and when do discussions turn to commercial arrangements?