By Lucy Phillips
22 January 2010
Lord Mandelson has defended the government’s decision to slash university budgets, saying it will prompt necessary changes for economic growth.
The business secretary yesterday criticised higher education institutions for not supplying graduates with skills for new and expanding industries, such as nuclear civil engineering, which would drive the UK’s future economic growth. ‘Universities are not ivory towers. They are not remote islands in the regions they are located, they have got to work and join up with businesses and private enterprises,’ he said.
The £950m cuts to higher education spending over the next three years, announced in December, would force the sector to adapt, Mandelson said. ‘Universities have to change what they offer and deliver to students both to meet individual demands and the employment needs of the economy. If that means changes in employment so be it,’ he added.
Higher education institutions were ‘a prime investment in our economic future’ and couldn’t be ‘completely immune to fiscal reality’, he added. ‘They have to accept their fair share of the economies and savings that have to be made – but not more than their fair share.’
Mandelson also said regional development agencies would be the ‘essential bridge’ between local authorities, science-based research and private enterprise in the government’s post-recession economic plans, outlined in the Going for Growth strategy published on January 7. He condemned Tory plans to scrap the quangos, which are also unpopular among council leaders.
‘If we don’t have them, who else will make sure these alignments take place and things happen on the ground... They [the Tories] will be kicking in the teeth every region in the country that needs the sort of effective planning, speed of decision making and joining up of government the RDAs bring,’ he said.
Rosie Winterton, minister for regional economic development, told Public Finance that local government would have ‘a very clear role’ in delivering the government’s growth strategy, although it would mainly be through RDAs.
‘If you abolished RDAs and abandoned government intervention strategy, you would have a complete free-for-all, and not the ability to target investment. We know there will be difficult fiscal restraints but that’s why we have to have a properly planned approach,’ she added.
