Major Scottish university plans fresh cuts as costs rise by £4.7m in 'unprecedented times' for sector

A major Scottish university is planning a fresh wave of cost-cutting measures after being hit with a series of new financial pressures, it has emerged.

The University of Aberdeen said its costs for 2025/26 were now due to climb by at least £4.7 million due to higher National Insurance contributions, staff pay awards and the impact of inflation.

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The ancient institution is stopping almost all staff recruitment, as well as revisiting voluntary redundancy and early retirement bids from staff who previously had applications turned down.

Bosses said the move was “regrettable, but necessary” amid the “unprecedented times for our sector”.

The action was discussed at an “extraordinary meeting” of the university’s ruling court earlier this month. The financial situation was the only item on the agenda.

University staff hold a rally outside the Scottish Parliament to protest against threatened job cuts and demand a fair budget for higher education (Picture: Lisa Ferguson) | National World

It comes as higher education institutions across Scotland and the UK continue to feel the impact of a significant fall in fee-paying international students, linked to the immigration policies and rhetoric of the previous Conservative government at Westminster, as well as several years of real-terms cuts to their funding from SNP ministers at Holyrood.

Meanwhile, the decision by the Labour-run UK government to raise employers National Insurance contributions is estimated to be costing Scottish universities more than £45m in 2025/26.

Close to half of higher education institutions in Scotland reported an operational deficit in their latest accounts, while Edinburgh University is seeking £140m of savings, and Dundee University required £22m of emergency funding to ensure its survival.

Founded in 1495, the University of Aberdeen is the third oldest in Scotland and the fifth oldest university in the UK.

The institution, and neighbouring Robert Gordon University, have been credited for being among the first in Scotland to recognise and respond to the looming financial crisis, although Aberdeen faced an huge backlash over plans to axe modern languages courses and staff.

Last year, The Scotsman revealed Aberdeen University’s accounts for 2022/23 had warned there were uncertainties that “may cast significant doubt over the ability of the university and group to continue as a going concern”.

A recovery plan was launched at the end of 2023, including a voluntary severance scheme, and the warning from auditors was removed from the university’s latest accounts for 2023/24.

The financial statements for last year showed savings of £19m were achieved, with £13m coming from staff costs and £6m from operations.

In the report, Aberdeen University principal George Boyne said the institution had taken “swift and decisive action to secure a sustainable financial position”, despite rising costs and lower public funding.

The £8.5m underlying deficit reported in its 2023/24 accounts represented a reduction on the £12.5m loss forecast earlier in the year. However, the university has now said further savings measures are required.

A spokesperson said: “We’ve made good progress on stabilising and improving our financial position by managing our costs, setting tough savings targets and pausing recruitment on many roles.

“We now need to make further savings as costs for 2025/26 are set to climb by at least £4.7m due to higher National Insurance contributions, last year’s pay award, the payment of increments and inflationary pressures across a wide range of areas.

“We are taking early action to bring costs down and this includes stopping almost all staff recruitment, revisiting voluntary severance and enhanced retirement for previously declined applications and pausing the academic promotion exercise.

“The steps are regrettable, but necessary to help us offset some of our rising costs and continue to navigate unprecedented times for our sector.”

The measures have emerged just days after members of the Educational Institute of Scotland University Lecturers Association (EIS-ULA) at Robert Gordon University (RGU) launched strike action over job cuts.

RGU announced in November that it planned to make a further 135 redundancies to ensure its long-term “viability”, after 130 workers had already left under voluntary severance schemes. The university has said it is doing everything it can to “mitigate against the potential of compulsory redundancies”.

Further strike days are planned at RGU for Thursday, May 1, and Wednesday, May 7.

Meanwhile, both the UCU union and Unison are balloting for industrial action at Edinburgh University, and a taskforce has been established to try to help secure the recovery of Dundee University, amid hopes that plans to axe 700 jobs can be limited.