Knowledge has power to inspire

Apr 16 2009 by Paul James, The Journal

FOCUS on a knowledge economy is crucial to the survival of the North East, and university chiefs are backing up their claims with cash and commitment.

Key financial figures at the region’s big four universities have said their combined role in the area can not only stimulate a short-term recovery, but lead to long-term prosperity and fill the void left by heavy industry.

Newcastle, Northumbria, Sunderland and Durham have pointed to a breakdown of university spending in the local economy, including students’ cash, which shows higher education is worth more than £1bn to the region each year.

With the sector facing funding cuts, which could see it slip into its own cash crisis over coming years, the institutions have said it is crucial they do all they can now for the North East while the funds remain available.

A combination of grants from the Higher Education Funding Council for England (HEFCE), VAT breaks, and their own cash, means universities will:

PUMP more than £20m of extra spending into the local economy over the next 18-months

CREATE up to 500 extra jobs

PROVIDE careers guidance, work placements and specialist training to more than 4,000 unemployed, or underemployed workers

RETAIN more graduates within the region’s workforce

CONTINUE with long-term employment and development projects including Newcastle Science City

The theory is universities can act as conduits for Government cash to be channeled to the areas it is needed most.

Professor Andrew Wathey, vice-chancellor and chief executive of Northumbria University, said: “Over the past two decades, the North East economy has seen a huge change, with the demise of the traditional heavy industries giving way to a knowledge-based economy.

“Universities were key to that phase of repositioning and regeneration, and can now play a pivotal role in supporting business nationally through the current economic downturn.”

The moves come as all four universities continue to attract record numbers of applications for places, particularly from foreign students in light of the weak pound.

All remain on course to return a desirable spending surplus of between 3% and 6% when the academic financial year draws to a close.

Durham University treasurer Paulina Lubacz, said: “We are in a good financial position at the moment compared with many local businesses. We’re very fortunate, which is why we’re looking to do what we can for the region.”

Newcastle University says it has focussed on labour-intensive construction, at sites including a new one-stop shop for student services, next to Northern Stage, which they believe will generate as much local wealth as possible.

In February Northumbria launched a three year £17.8 million Strategic Investment Fund, intended to grow University’s research strengths and to attract high quality research-active staff to the North East.

And Sunderland University are in the process of employing a dedicated pool of interns, which will be made available to local businesses, and developing the skills of 600 key staff in the automotive industry.