Scottish universities need funding uplift from December budget, ministers told

The Scottish government must plug funding shortfalls to support the sector in Scotland that now borrows 45% of its annual income

Ahead of the December budget, universities in Scotland say the Scottish government must increase annual HE funding or risk undermining the economic stability of the sector and hurting student opportunity. 

Universities Scotland and Colleges Scotland, which represent most of the HE and FE sectors in the country, released a joint statement on 16 November. 

A three-year spending commitment tops the list of policies Universities Scotland hopes to secure. The mission group wants an annual uplift of nearly £242 million until 2024/25. At this summer’s election, Universities Scotland called state funding a serious “sustainability” problem for the sector.

Universities want funding per student to increase to 2014/15 levels in real terms, from £5,760 to £6,640, after a 13% reduction in teaching funding since the middle of the last decade. Universities also need an extra £60m per year in capital funding to address an £850m “maintenance backlog”. 

Universities in Scotland are borrowing more than ever, collectively leveraging more than £1.7 billion in loans. “Many institutions are at the limits of their capacity to borrow,” Universities Scotland said – and loans now account for nearly 45% of total sector income. 

The budget requests also include £7 million for graduate apprenticeships, a further £7m to develop up-skilling and re-skilling courses and a review of the part-time grant to increase the number of adults that take up short courses and micro-credentials. At present, those whose income in the previous tax year was above £25,000 are ineligible – but this requirement does not account for the recently unemployed, Universities Scotland says. 

The Scottish Funding Council estimate that research generates an annual loss to universities of £328m. Universities Scotland says a shortfall in government funding has reduced the sector’s ability to win competitive UK-level research. 

To remedy the situation, Universities Scotland suggests increasing the Research Excellence Grant (REG) by £36.5m per annum to return it to 2014/15 levels. The mission group also wants the government to restore the Universities Innovation Fund to its 2014/15 real-terms value, with £4.5m more per year. The budget proposals also include calls for “mission-driven research” funding and £3m more per annum for early-career researchers through the postgraduate research grant.

Ministers in Scotland should allocate funds in the region of £19.7m for an Erasmus-style, reciprocal scholarship scheme for Scottish-domiciled and EU students if they are serious about replacing the EU student exchange programme, Universities Scotland estimate.

Gerry McCormac, the convener of Universities Scotland, said: We are starting from a position of strength: Scotland’s colleges and universities individually are the envy of many around the world. Collectively, our system has many attributes that other nations desire: a college and university sector that places the learner at the centre. 

“Our colleges and universities complement each other and that’s why we are jointly coming together to ask the Scottish government to demonstrate it values colleges and universities with a budget that our students deserve.” 

Read more: Tackle ‘systemic underinvestment’ in universities, says MillionPlus

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