Against a backdrop of processes of globalization, there is growing recognition across Europe of the importance of sub-national development strategies that provides a context for universities to become powerful partners of regional economic, environmental and social change. Pressures associated with the rise of the so-called knowledge economy, increased participation in higher education (HE), and processes of political and administrative devolution have all led to a rediscovery in recent decades of the relevance and responsibility of higher education to local and regional communities (Bogdanovic et al., 2006: 46). In the United Kingdom, higher education institutions have so far been keen to show that through the generation of a local pool of conceptual and managerial skills, the provision of applied research and other transfer activities, they have, more or less successfully, been able to define themselves the terms of their own engagement with their immediate locality. Yet, these instrumental justifications emphasising the economic nature of the public goods offered are being challenged with more pressure in the form of government schemes (to which funding is attached) increasingly imposing a common frame on these initiatives within a discourse of community engagement. Underpinning this, is the notion that by opening up higher education institutions in ways other than course provision and accreditation, universities can contribute to social justice and community inclusiveness through the promotion and dissemination of “non-economic accounts of public contributions, such as individual self development or improved citizenship" (Calhoun, 2006: 12) . Under such pressure, universities have embarked on more comprehensive strategies of "community engagement" or "social embeddedness", in order to restore their image as "paradigmatic institutions of the public sphere" (Delanty, 2005). The extent to which strategies to raise the profile of universities as agencies of cultural regeneration and of tackling disadvantage and structural poverty reflect primarily their dependency towards state policies, their positioning within a competitive higher education market, or to their level of structural embeddedness within the social fabric of their local environment is the main focus this paper. More specifically, the paper will seek to relate the levels and nature of effective and perceived impacts (both negative and positive) of universities over their immediate environment to their rhetoric of engagement. A particular attention will be paid to local contexts in order to allow a discussion at the conference about European and local trends in these processes.

These multilevel interactions will be examined using preliminary findings from two UK case studies combining a regional focus (large conurbations in Scotland and England) and a grounded institution-centred approach. Both cities are characterised by higher than national average levels of deprivation and contain more than one university, including a former technical college/polytechnic which in each case acts as our core focus. The fieldwork was carried out over one year (2008) and involved interviews with a range of stakeholders from within and outside the HE sector, as well unstructured fieldnotes and document analysis. Those two cases are part of the larger ESRC-funded HEART project (Higher Education And Regional Transformation) examining the complex relationship between 'disadvantaged' communities and their local higher education institutions (HEIs).

• New funding mechanisms of higher education institutions throughout Europe are driving institutional strategies towards showing a higher local profile. • The diversity of forms of engagement and of types of local impact of universities is a reflection of the level of stratification of national HE systems. • Perceived social impacts of universities depend on their level of structural embeddedness in the local social fabric. • Institutions characterised by high levels of embeddedness tend to find it difficult to translate this longstanding relationship into a strategic discourse on community engagement.