Exclusive:Scottish college launches 'fundamental review of operations' as deficit doubles to £10.8m

Principal says financial challenges are ‘real and pressing’

A fundamental review of operations has been launched at Scotland’s Rural College (SRUC) after its underlying deficit more than doubled to £10.8 million last year.

The institution, which gained degree-awarding powers last year, reported “significantly depleted cash reserves” and has embarked on a three-year recovery plan to ensure it can “surmount these challenges”.

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To help with cashflow pressures, the Scottish Funding Council (SFC) has provided SRUC with “advanced income” of £5m, and has deferred loan repayments worth £3.6m.

It is the latest example of the mounting financial challenges in the further and higher education sectors in Scotland and across the UK.

SRUC was established in 2012 through the merger of the Scottish Agricultural College with Barony, Elmwood and Oatridge colleges.

It has sites in Edinburgh, Ayr, Dumfries, Aberdeen, Inverness, Fife, West Lothian and Glasgow.

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The college’s accounts for 2023/24 show an underlying deficit of £10.8m, up from £4.5m in the preceding year.

At the year-end, SRUC group held £14.6m in cash and current asset investments, down from £24.1m.

The annual report states: “The year on year deficits have, coupled with capital investment, significantly depleted cash reserves, which highlighted the urgent need for strategic measures to ensure long-term sustainability.

“SRUC has embarked on a fundamental review of its operations to stem the trend of increasing annual deficits and to accelerate a transformation of its operating models which had been identified as part of its strategic plan.”

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A recent management shake-up has included a decision not to replace two vice principals who left in 2023 and 2024, while the responsibilities of the former director of finance, who left a year ago, have been assumed by the promoted chief financial officer.

SRUC senior lecturer Hadi Aliki (left) and Jim Fairlie MSP at the launch of the SRUC Vertical Farming Innovation Centre.SRUC senior lecturer Hadi Aliki (left) and Jim Fairlie MSP at the launch of the SRUC Vertical Farming Innovation Centre.
SRUC senior lecturer Hadi Aliki (left) and Jim Fairlie MSP at the launch of the SRUC Vertical Farming Innovation Centre. | SRUC

Professor Wayne Powell, principal and chief executive of SRUC, said: “The challenges and opportunities currently faced by the university and college sectors are unprecedented, exacerbated by rising inflation and energy prices.

“Our own challenges in moving to financial sustainability are real and pressing, and steps to address them have been underway since early last year. As a result, we are in the process of making a number of structural adjustments, including the reorganisation of our executive leadership team.

“At the same time, it has also been important to invest in growth areas that will take full advantage of our new status, achieved in October 2024, as a degree-awarding institution.

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“This is a very significant opportunity for SRUC and is a key enabler of growth to complement our Rural and Veterinary Innovation Centre (RAVIC) in Inverness, our School of Veterinary Medicine as well as improvements to our Edinburgh Campus.

“These investments further cement our commitment to being a place-based tertiary institution which is critical to supporting Scotland’s rural economy.”

An SFC spokesperson said: “As Scotland’s tertiary education and research authority we have a role in monitoring institutional sustainability to enable the best outcomes for students.

“We engage with colleges and universities as soon as financial issues are identified to ensure they continue to fulfil their duty to learners and staff as we work alongside them to return to a position of financial health.

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“At SRUC we have been able to provide support to allow its financial challenges to be addressed in line with a well-developed financial recovery plan which is also designed to create future sustainability.”

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