4.19 The most obvious existing institutional channel through which the HEI agenda might be influenced to take account of labour market needs would be the network of TECs which cover England. The difficulty in doing this under current circumstances, however, is that TEC links with HEIs are highly variable, with some TECs striving vigorously to cultivate links to local HEIs, but many others – seemingly a majority – seeing higher-level skills training as largely or exclusively the province of HEIs, and hence concentrating their efforts to a much greater degree on the widely acknowledged problems of technician-level skills and intermediate labour markets. In this respect, the decision to withdraw HE Performance Related Funding for TECs is generally regarded as unhelpful, even though the funds channelled through this route were never generous. At the same time, some HEIs themselves are reluctant to be drawn into any significant degree of vocational training, partly on the grounds of their autonomy, partly due to the residual culture of indifference to vocational skills amongst some pockets within some universities, but most significantly because existing higher education funding mechanisms compel them to focus their energies in other directions.

4.20 Despite such limitations, it is clear from our survey that there are some examples of existing attempts to ensure that HEIs provide what one interviewee referred to as ‘regionally useful’ skills. At the national level, these are generally limited in scale. DfEE, for instance, has established the HE Development Fund, a £2.7 million competitively-allocated budget for 1997/98, managed by government regional offices. The aim of this fund is to support projects which encourage HEIs to produce more ‘relevant’ skills amongst students, and which encourage employers (and, in particular, SMEs) to make greater use of HEI services in both teaching and research. It represents the latest example of a sequence of other small-scale initiatives: DfEE’s support for collaboration between HEIs and employers through its Higher Education and Employment Division; the catalytic Enterprise in Higher Education initiative; and the HE-Business Partnerships. These have served a useful demonstration purpose as pioneering efforts to stimulate HEI-employer links, but with such limited resources that their impacts are unlikely to be anything other than marginal to the heart of HEI activities. Moreover, there is no overriding reason for basing these on regional boundaries (other than the fact that government regional offices administer some of the funds involved) rather than simply allowing such links to germinate naturally at whatever scale is appropriate.

4.21 There are also instances from our regional case studies of HEI outputs which are explicitly geared to meeting labour market needs. In the East Midlands, for example, all seven of the region’s TECs have formed alliances with partner HEIs, while DfEE Higher Education Development Fund monies will be used to support further links between HEIs, TECs and Business Links with the aim of supporting the needs of the region’s SMEs. In the other English case study regions too, it is possible to highlight examples of good practice with regard to TEC-HEI links, but not on a scale to belie the conclusion that these are anything other than isolated, peripheral and collectively lacking coherence. In London, for instance, LETEC, Newham Borough Council and LDDC are partners with London Guildhall and City Universities, University of East London and Queen Mary and Westfield College in a project to establish a new college of East London in London’s Docklands, planned to open in 1999. This is planned to have an explicitly local focus, with input from economic development and training agencies ensuring a sensitivity to local labour market characteristics and needs.

4.22 It is also possible to highlight examples from the case study regions of attempts by employers more directly to influence curricula development in HEIs. The Industrial Advisory Committees established at UMIST, comprising around 15-20 industrialists and which meet annually to review teaching, are one such attempt to influence curricula development. Another example, again from the North West, is from Salford University, where admission arrangements, course content and assessment on the Computers, Management and Electronics degree are decided jointly by the University and industry, with the aim of generating a ready-made supply of graduates for the sorts of non-technical engineering employment which historically have proved difficult to fill.

4.23 Many of these initiatives are useful, but essentially do little more than demonstrate the potential for greater HEI involvement in meeting skills needs. The situation in Scotland, by contrast, is very different, and in some cases acts as an exemplar on which the English regions might draw. The nation-wide remit of Scottish Enterprise, which deals with strategic economic issues outside the ambit of the LECs, has enabled HEI-employer networks to be established. These embrace a wide range of interests from across the country. For instance, one area of concern has been about levels of business awareness and transferable skills for SMEs. Whereas in England responsibility for economic development is largely outside the control of TECs, and training and labour market issues are fractured among the various TECs, Scotland has the advantage of having these powers combined in the network of LECs and overseen by the Scottish Enterprise core. This has enabled a more coherent response to the perceived problem of inadequate skills levels amongst graduates. Scottish Enterprise has the necessary weight to ensure that, as one respondent noted, ‘industry and academia are collaborating’. Similarly, as a national body, Scottish Enterprise has also been in a position to influence the agenda of the Scottish Higher Education Funding Council, for example successfully lobbying for the principles of Enterprise in Higher Education to be embodied in the arrangements for Quality Assessment of Teaching in Scottish HEIs. By contrast, evidence from the survey of stakeholders in English regions suggests that, in the absence of arrangements comparable to those of Scottish Enterprise, individual TECs lack the authority to influence the HE agenda and that attempts to do so at the local level achieve only patchy nation-wide coverage as a result.

4.24 That these projects are more thoroughly developed in Scotland is indicative of the different institutional structures in place. Scotland, in contrast to the English regions, has had in the form of Scottish Enterprise (and before it the Scottish Development Agency) a relatively well-resourced agency which is able to take a strategic perspective on skills needs and has the political and financial clout to ensure that HEI involvement is maximised. In England, by contrast, responsibility for economic development, skills training and inward investment is dispersed amongst a disparate network of agencies, straddling TECs, Business Links, Chambers of Commerce, local authorities, Urban Development Corporations, the Employment Service, the Careers Service, regional inward investment promotional agencies, regional economic development partnerships and sundry other ad hoc private-public partnerships. That HEIs should have some difficulty in relating to this complex and seemingly impenetrable array of overlapping bodies is unsurprising, although recent attempts to create more simplified institutional structures (for example, through mergers between TECs and Business Links) and funding sources (for example, through the creation of the Single Regeneration Budget) have helped somewhat to ease this problem.

4.25 Nevertheless, it is difficult to avoid the conclusion that wider institutional change is needed in order to enable HEIs to collaborate with these various bodies. The establishment of Government Regional Offices has clearly been helpful in this respect, since they offer an authoritative forum through which the various stakeholders can be brought together. This is particularly true in the training field since TECs receive funds via the regional offices. Regional offices could, however, take a rather more directive role in encouraging greater links between HEIs and TECs. Such links already exist in the East Midlands, and between some TECs and HEIs in the other English regions, but, as we have seen, these are generally limited in scale. Informal regional associations such as the North West Partnership offer an alternative potential mechanism for encouraging local and regional labour market issues to be considered. The Labour Government’s proposals for regional development agencies and regional chambers/assemblies might offer more enduring bodies into which HEIs could feed.

4.26 There are, however, doubts about whether the regional scale is the most appropriate at which to organise collaborative activities to bolster local labour markets. Such doubts range from arguments that more effective collaboration might be organised locally, taking account of the strength of existing city-wide institutions and, it could be argued, approximating more closely to actual local labour market boundaries. A different suggestion is that some form of national structure might be more appropriate for co-ordinating higher-level skills provision. Proposals for a University of Industry, for example, might go some way towards establishing a national framework through which unmet economic development priorities could be realised. This, however, would not realise the potential mutual benefit of involving universities in their local, sub-regional or regional economies and could therefore represent only part of the solution.