Scottish cuts ‘based on incorrect assumption’ of overseas subsidy

Scottish university leaders have warned of “deepening pain” from the latest Holyrood funding cuts, which are based on an “incorrect assumption” that all institutions can plug the gap with international revenue, when the reality is one of “concerning headwinds” on overseas recruitment.

The Scottish government’s 2024-25 budget includes what amounted to a cut of £48.5 million, or 6 per cent, to higher education resource funding – covering the teaching of Scottish-domiciled students – compared with the previous budget.

However, given that the Scottish government had already made in-year cuts of £20 million for 2023-24, the reduction was £19.6 million, or 1.7 per cent, against that revised baseline.

Public funding per Scottish student has been shrinking consistently in real terms since 2014-15, now reaching a cumulative 39 per cent fall since then, according to estimates from Universities Scotland.

Preserving a funding system in which there are no tuition fees, and funding for Scottish students comes only via the government, has been a totemic issue for the Scottish National Party (SNP), in power since 2007.

“Next year’s budget will cause further and deepening pain, given the cumulative nature of these cuts,” said Iain Gillespie, convener of Universities Scotland and principal of the University of Dundee. “Universities will face tough decisions while trying to balance the best outcome for students and the other stakeholders who rely on our institutions.

“There have been long-held assumptions that universities will continue to be OK in the face of cuts, as they have the cross-subsidy from international student fees to fall back on. That can no longer be relied upon as universities everywhere face sudden and very concerning headwinds in international recruitment.”

George Boyne, principal of the University of Aberdeen, told an event last month that this year had seen “an almost 20 per cent reduction on average in the number of international students coming to study at Scottish universities”. This, he continued, was partly connected to “the UK government’s immigration policy, visa requirements, debarring of international students from bringing their dependants with them” having “a negative impact on the perception of the UK as a welcoming place for international students”.

Liz Bacon, principal of Abertay University, said the budget would “cause further damage to Scottish higher education” and “have a disproportionately heavy impact on students at modern universities, given the greater reliance on public funding at these institutions”.

While she acknowledged that the Scottish government faced “difficult decisions”, she said the latest cuts were “based on the incorrect assumption that all universities can rely on international student fees to plug the shortfalls handed down year after year”.

Given the role of Scottish universities in the nation’s innovation and economic growth, the budget will “undoubtedly have an adverse impact on our progress and the wider success of the country”, Professor Bacon said.

With the SNP no longer seeming as unassailable as it had been for many years, some university leaders think there may in future be greater scope in Scotland to open up consideration of different funding models, such as the introduction of tuition fees in addition to public funding.

Nick Hillman, director of the Higher Education Policy Institute, said it was “hopelessly naive to think that constant funding cuts are the right approach, assuming that Scottish policymakers and Scottish voters want Scottish universities to maintain their historic and enviable global position. The lack of open debate about alternative funding models has been quite stifling in recent years, and it is a good thing that new approaches are increasingly being discussed.”

john.morgan@timeshighereducation.com