The UK government’s plans for an industrial strategy pledge a key role for universities in regional growth, commit to increasing university-business collaboration funding and reaffirm the commitment to a “major review” of tertiary education funding.

The , published today, says that “Britain will take a leading role in a new industrial revolution as significant as the last” and that the government “will drive change through the biggest increase in public investment in [research and development] in our history”.

Following on from an increase in research funding outlined in the budget, the White Paper reaffirms the government’s commitment to reach “2.4 per cent of GDP [gross domestic product] investment in R&D by 2027 and to reach 3 per cent of GDP in the longer term, placing us in the top quartile of OECD [Organisation for Economic Cooperation and Development] countries”.

The White Paper offers further detail on how extra research funding will be directed: “UK Research and Innovation strategy will deliver a real-terms increase in council budgets of approximately 20 per cent between 2015-16 and 2019-20. We will also increase support for Quality-Related research through Research England.”

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It also outlines four “grand challenges” in research, developed after consultation with UK science: to “put the UK at the forefront of the artificial intelligence and data revolution”; “maximise the advantages for UK industry from the global shift to clean growth”; “become a world leader in shaping the future of mobility”; and “harness the power of innovation to help meet the needs of an ageing society”.

The government will invest a further £725 million over the next three years in the Industrial Strategy Challenge Fund, to be matched by private investment, to support these grand challenges.

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The White Paper commits the government to increasing Higher Education Innovation Funding, which supports university engagement with businesses, to a total of £250 million a year by 2020-21.

The document also recognises the key role of the regions in the industrial strategy and growing a successful economy. There is a commitment to introduce “a new competitive £115 million Strength in Places Fund to support areas to build on their science and innovation strengths and develop stronger local networks”, to fund “collaborative programmes proposed by universities, local employers, Local Enterprise Partnerships and their counterparts in the devolved nations”.

And there will be Local Industrial Strategies, agreed between regions and the government by March 2019. “Universities, colleges and other local institutions will be key, as will an approach that is responsive to both local and global market conditions to provide greater long-term certainty,” says the White Paper.

The document also says the Office for Students “will address employer and student needs and expectations in the short, medium and long term – considering the skills gaps that exist today, and anticipating the demands of the future economy. It will make the sector more dynamic and make it easier for new, high quality providers to offer higher education.”

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The White Paper adds: “Furthermore, our commitment to conducting a major review of funding across tertiary education will ensure a joined-up system that works for everyone.”

Pam Tatlow, chief executive of MillionPlus, said ministers would have to ensure that a “jigsaw of stakeholders and initiatives fit together to produce a coherent pattern of delivery throughout the country”.

She added: “All the evidence confirms that historic inequalities in regional growth can, in part, only be addressed at local level. The ambition to develop local industrial strategies by March 2019 is the right approach. As anchor institutions in their regions and localities, modern universities must be involved as key players from the outset.

“The success of the industrial strategy, as a whole, will depend on these local strategies and the government should look to commit significant investment to these plans and their stakeholders in the future.”

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Maddalaine Ansell, University Alliance chief executive, said: “It is particularly welcome that today’s White Paper signals a more strategic role for the Office for Students in identifying the future skills needs of the UK economy. Alongside this, the promise of extra core funding for university research and innovation will enable institutions to undertake more work alongside businesses of all sizes to raise productivity in every part of the economy.”

Jessica Cole, Russell Group head of policy, said: “The papers will be full of the happy news about the royal wedding tomorrow, but the Industrial Strategy will have far more of an impact on the future of our country."

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She called the HEIF investment confirmation good news and added: “The benefits of our world-class higher education system are spread right across the country.”

john.morgan@timeshighereducation.com