Why we all make capital from this great city

It's the nation's incubator, so don't resent its success - a strong London is good for everyone, say Jane Glanville and David Rhind

Britain has been deconstructed since 1997. The reality of devolution to many aspects of life in Scotland, Wales and Northern Ireland is still not appreciated by many, including Whitehall.

Universities have been affected by the regional operations of the learning and skills councils, and various regional bodies have sought to encourage links with local, often small, businesses. There have been regionally devised schemes set up by the Higher Education Funding Council for England and the Learning and Skills Council to widen participation, while the Higher Education Investment Fund is allocated with advice from regional development agencies.

But in terms of traditional mainstream teaching and research funding for universities, there has been little change.

Do, can or should universities play a significant regional role? If the answer is no, why are the chair and the chief executive of Hefce, the director-general of higher education in the Department for Education and Skills and the chair of the London Development Agency attending next week's plenary meeting of London Higher, the representative umbrella organisation for the capital's universities and higher education colleges?

Regions differ hugely, so there can be no universal prescription or one model for a regional association of higher education institutions. But the London experience over the past few years may have much wider relevance.

London is the academic capital of Europe. Its 42 HE institutions span the range from world-class research-intensive universities to those with long records of success in widening participation: though London has the highest proportion of working graduates, it also has areas of very low higher education penetration.

The capital is blessed with an astonishing range of nationally distinctive specialist institutions, a constellation of world-class organisations in the performing arts, three of the top six business schools in Britain and a strong focus on the professions. Some 340,000 students study there, 60,000 of them from overseas. Maybe surprisingly, these 42 bodies have an astonishing record of collaboration.

London's higher education is hugely important to the city. Our most recent report, London: The Knowledge Capital , shows that it generates some 4 per cent of the capital's gross domestic product and has major city-wide benefits in creating human and social capital. So the draft London economic development strategy stresses the importance of the London Development Agency working closely with London Higher.

But London as a place is also crucial to London's institutions: as a world city where 300 languages are spoken and ethnic diversity is a fact of life, it is a great magnet for young people and business alike. A third of all overseas students in Britain come here, bringing short and long-term financial benefit.

Contrary to myth, this benefits the whole of the UK. Our report - based on independent studies - shows that higher education generates even more benefit outside the capital than within. In part, this is because of the nursery effect, whereby London acts as a gateway and an incubator. Skilled staff and businesses often later migrate to the rest of Britain, taking advantage of lower local costs and other factors.

A regional strategy that compromises national success would be a disaster- thus London must be encouraged to grow still more and fight off international competition. More generally, some things should be left well alone. "Mainstream" long-term, basic and some strategic research should remain funded on the basis of national excellence wherever it is manifested. But more immediately useful research and good strategic partnering between the RDA and higher education can be hugely beneficial to local and national economies. Universities can transform the cultural richness of their hinterlands. Fostering the widening of participation needs regional, sub-regional and still more local partnerships between universities and others.

No one higher education institution can do all things well. It follows that different regional and national policies need to be delivered by different clusters of institutions. Regional associations can facilitate the collaboration required to make this happen. By engaging member higher education institutions, they can also minimise unanticipated consequences of new policies. Regional associations can help to make university activity at regional level a beneficial reality.

Jane Glanville and David Rhind are director and chairman of London Higher and are writing in their personal capacities. Professor Rhind is vice-chancellor of City University.

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