Prestigious Scottish university avoids new warning over its survival after 530 years

Aberdeen University has announced it will no longer have to declare there is a “material uncertainty” over its ability to continue as a going concern.

The Scotsman revealed earlier this year the 2022/23 accounts for the university stated there was “significant doubt” over the future of the 530-year-old institution.

Scotland’s second best university goes to Aberdeen. Rising four places from last year, the University of Aberdeen is among the UK’s twenty best universities as well as Scotland’s second best. | popovj2 - stock.adobe.com

The university had highlighted “external uncertainties” - such as rising costs, falling numbers of international students and a cut in Scottish Government funding - which it said created a “material uncertainty” over its ability to deliver its financial recovery plan, achieve key targets and meet the terms of a recent refinancing package.

The accounts said this “may cast significant doubt over the ability of the university and group to continue as a going concern”.

Professor George Boyne, principal of Aberdeen University | submitted

The university insisted at the time that it was on a “firm financial footing” after cutting costs by £18.5 million, as part of a recovery plan that was agreed in February, as well as a restructuring of its debt.

It emerged a few days ago, however, the issue led to a delay in the publication of the university’s accounts, which subsequently resulted in it being ordered by the US government to take “additional measures” to avoid being removed from a scheme that provides $3m (£2.4m) in financial support to about 150 of its students.

Aberdeen University bosses had said one of their “key priorities” was being able to remove this auditing phrase from its next accounts, for 2023/24. After a meeting this week, the ancient institution announced on Wednesday the accounts had been approved, without the need for the “material uncertainty” warning.

Principal George Boyne said: “I commend our community for their resilience and for all their efforts in getting the university to a much better place. This follows the recent news that we are in the top 15 in two major UK league tables and the National Student Survey.

“All that and a 30 per cent increase in research awards, means we are well placed to grow our income to become an ever-stronger organisation delivering world-class research and education.”

However, Professor Boyne used the announcement to add to pressure for a funding uplift for universities from the Scottish Government.

The Institute for Fiscal Studies (IFS) think-tank said this week that per-student funding for teaching Scottish students is now 22 per cent lower in real terms than in 2013/14.

Umbrella body Universities Scotland has called for swift intervention from SNP ministers after the Labour government said English universities would be able to increase tuition fees by 3.1 per cent from next year, following a long freeze.

Earlier this week, Edinburgh University became the latest institution to announce it is cutting back on staff to balance its books, following a similar move by Dundee University and Robert Gordon University in Aberdeen.

Prof Boyne said: “I would highlight the need for the Scottish Government to at least match the 3.1 per cent increase in revenue per student for universities in England, as a first step towards the funding Scottish universities require to be financially sustainable.”

Higher Education Minister Graeme Dey said: “The Scottish Government appreciates the valuable contribution universities make to Scotland’s economy and wider society. That is why we continue to invest over £1 billion in the sector to support the delivery of excellent teaching, research and innovation.

“The UK government’s decision to increase employer National Insurance contributions is causing real alarm for sectors across the country. It’s therefore vital the UK government now provides urgent clarity on whether it will fully meet the costs it is imposing on public sector employers, as well as those providing public services like universities. 

“Additionally, maintaining restrictive visa policies will negatively impact the ability of Scottish universities to attract international students, which will create devastating consequences for both the sector and our economy. The costs of the UK government’s decisions should not fall on Scotland’s public sector, charities and universities.”