Scottish universities fear English fees review will hurt revenue

Reduction in fees for rest-of-UK students would add to ‘perfect storm of uncertainty’, says Universities Scotland

April 1, 2019

Scottish universities face losing much of an “integral” £150 million income stream if England’s post-18 education review leads to a lowering of the £9,250 tuition fee cap, part of a “perfect storm of uncertainty” they face.

Universities Scotland and Universities Wales are set to publish a call for the impact of England’s post-18 review on the devolved nations – little acknowledged in Westminster until now – to be given full attention.

About 14 per cent of UK undergraduates at Scottish universities are “rest of UK” students from outside Scotland. These students from England, Wales and Northern Ireland are charged fees of £9,250 a year – while there are no tuition fees for Scottish students and those from the rest of the European Union.

The independent panel on the Westminster government’s post-18 education review is widely expected to call for tuition fees to be lowered from £9,250 in England, potentially to £7,500.

If this were passed into law, the maximum fee for rest-of-UK students at Scottish universities would be lowered to the same level.

Scottish universities are already “facing what you might describe as a perfect storm of uncertainty” with their Scottish government funding cut by £127 million, or 11 per cent, since 2014-15 and the prospect that higher fees for EU students after Brexit might cause a “sudden collapse” in those numbers, said Alastair Sim, director of Universities Scotland.

Rest-of-UK students are a “really significant part of the funding mix”, bringing about £150 million a year to Scottish universities, he said.

“If that [funding from rest-of-UK students] were to go down significantly, while you’re facing the Scottish government’s continued cuts and while you’re facing the EU uncertainty, it really makes everything look extraordinarily uncertain,” Mr Sim continued.

Since most Scottish degrees last for four years, rather than three as in the rest of the UK, many Scottish universities currently offer four years for the price of three to rest-of-UK students. But if fees are cut, that might become unviable, and charging the full four-year amount might make Scottish universities increasingly unattractive.

There have been suggestions that while the review panel will recommend a cut in fees, it will also call for the Treasury to replace the lost funding with direct public investment.

Under the Barnett formula, extra Treasury spending on English universities would mean extra funding for the Scottish government.

But in such a scenario, there would be “no obligation” on the Scottish government to allocate the extra money to universities, and “given the multiple pressures on their budget…it’s very hard to have full confidence those resources would necessarily flow through to higher education”, Mr Sim argued.

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