Intelligence: 14 October 2019Universities & Cities: Avoiding a ‘conscious uncoupling’?

The Augar Review findings and Theresa May’s ‘swan-song’ backing of a reduction in tuition fees, have perhaps brought the question of higher education funding and equality of access more sharply into focus of late. But beyond this clear challenge, we also need to be alive to the role that universities (as longterm investors) can, and in many locations already do, offer our cities and towns in terms of support for considered economic growth and regeneration.

UK universities are world-renowned, competitive hotbeds of innovation and entrepreneurship and act as major economic assets. They support jobs, exports and contribute to society through research and teaching, in partnership with government and business, which help to feed and drive many of our vital industries.

Universities need their home city or town to be accessible, diverse and present an appealing offer of culture and opportunity, while a town or city thrives on the vibrancy universities bring. The flow of educated and skilled people can feed the local employment market with professionals and entrepreneurs; sector concentrations around centres of excellence drive growth opportunities, while student spending supports culture and leisure markets. But of course, it is the potential for universities to influence and positively change the built environment which is of particular interest to our teams.

Research from our Development Economics team this year shows that over the past three years, a large proportion of universities have continued to increase their development related capital expenditure programmes, with the top ten also seeing a significant rise in income and student numbers as a potential result (see graphic below). But universities invariably thrive when the city or town in which they reside is also flourishing. Here we take a closer look at their inter-dependencies and challenges inherent within this relationship.

The role of the University

Oxford and Cambridge may be the extreme examples of universities as major landowners and investors, but many university and college campuses have helped to shape the skyline and over time even provide new civic identities for wider urban populations across the UK. With investment and the changing funding regimes for education emerging over the last 20 years, universities have had to embed this role as landowners and place-shapers into their core administrative skills set.

Students for many years now have picked universities as much for the teaching reputation and course offer as the lifestyle and opportunities the wider city or campus provides them throughout their studies. However, in the ever more competitive world of higher education, the importance of attractive, well-connected and ‘healthy’ campus environments is driving a range of investment programmes and initiatives. Pressures on the flexibility and quality of teaching accommodation, also sit alongside high expectations for student living accommodation. But also in the last few years, the importance of connectivity between the two and the wider city has increased.

The need to create a “sticky campus” is growing. It is a simple concept that aims to provide students with the right kind of environment and learning opportunities that they will want to come study in, stay in and grow their careers and families in. The connectivity with the place, business environment and economy in which a university lies, opens up so many more opportunities to prevent ‘brain drain’ and build on mutual opportunities.

Development which integrates with the city and allows businesses and students to interact enables research and commercial reality to feed off one another. This was a concept we have fully debated with many local businesses and the wider community throughout the Reading 2050 visioning engagement programme, and the desire for all to be aware of, inspired by and even proactively engaging with what the University of Reading is doing was extremely strong. Physically exposing and weaving the university into the fabric of the city was one obvious way we proposed to do this.

Our recent involvement with major projects for Liverpool John Moores University (LJMU) and Manchester Metropolitan University (MMU) has demonstrated the huge ambition to transform key city centre sites through innovative architecture, forward thinking and an open attitude to education. This will surely have an immensely positive impact, not only on the students and staff experience but also on the competitiveness of the universities and the wider city region.

The role of the city

In any relationship, there are always two sides to the story. From a city’s perspective, what are the challenges they face and how can we improve this union to prevent an ‘uncoupling’, going forwards?

Cities and the local authorities who drive them play a huge role in regenerating their urban fabric and embracing the regenerative opportunities their higher education providers (and in fact any landowner or investor of scale) are able to offer. At MIPIM 2019, we were joined by Bill Hughes, Head of Real Assets, Legal & General Investment Management and Frank Rogers, Chief Executive of Liverpool City Region Combined Authority, on our joint British Property Federation panel discussion, where this very point was discussed at length.

From Frank’s perspective, the key attribute an authority or city can bring to this partnership, to maximise the opportunities, is ‘vision and courage’. Once cities have articulated it, they then need to hold their nerve to see it through. Frank also cited the ‘single front door that city regions and combined authorities are now offering’ as great progress for all looking to contribute. This approach facilitates engagement on a much broader geographic level and potentially transcending local politics to consider and deliver change over far greater timescales.

Alongside this, a flexible approach to use is needed. Policy should not become an unnecessary barrier to regeneration. Invariably dated local plans and an inherent resistance to change can block activity. Instead local authorities need to consider when change can have a positive impact and then quantify this impact to the general public. Bill in particular felt strongly that cities which are progressive and constructive in their dialogue are refreshing to deal with and grab the attention of investors.

Although not a marriage made in heaven yet, universities and cities are so intrinsically linked that the mutual benefits of success are clear for us all to see. With competition amongst cities and universities rising, we believe that there continues to be a huge opportunity to stimulate new models of urban regeneration in UK cities and this is surely better achieved together.

Greg will be speaking on the role of universities aiding urban regeneration at the Education Estates Conference on the 16th October.

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