Exclusive:Scotland's universities facing 'economic abyss', warns top principal

Fears that world renowned education system will ‘perish’ without action

Scotland’s world-renowned higher education system will “perish” unless the sector “pulls in the same direction” and responds to an increasingly “dire” financial situation, the head of one of the nation’s most prestigious universities has warned.

Professor Sir Peter Mathieson, principal of the University of Edinburgh, said universities across the country were toppling into or nearing an “economic abyss”. Writing exclusively for The Scotsman, Prof Mathieson stressed the system underpinning universities was “broken” and required a “radical rewiring” to survive.

Unless such “urgent” action was taken to lift the sector off its knees, Prof Mathieson cautioned, future generations of Scottish students would suffer as a result.

Professor Sir Peter Mathieson announced last month that the university is looking to make cuts of £140m | Contributed

The stark admission from one of the most senior figures in Scottish higher education comes amidst ongoing financial turmoil, with universities forced to make sweeping cuts to budgets and staff in the race of growing operational deficits and escalating cost pressures.

As many as 700 staff could be impacted by job cuts at Dundee University as part of efforts to bridge a £35 million deficit. Prof Mathieson’s own Edinburgh institution has identified the need for urgent savings to plug a £140m budget gap.

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In an article for The Scotsman, Prof Mathieson, who has faced criticism over his total pay packet of £422,000 a year at a time when staff fear being made redundant, said the “difficult” decision to make savings - which is expected to involve a reduction of both staff and non-staff operating costs - was necessary to uphold his university’s longer-term vision of delivering high quality education and world-class research.

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

“Running an institution such as Edinburgh responsibly demands that decisions and actions are scrutinised,” he writes. “However, if we do not pull in the same direction and respond to the dire issues now, the education system as we know it will perish and future generations will suffer as a result.”

Prof Mathieson said there had been “plenty of warning signs” about the fiscal woes facing the sector, with leaders sounding the alarm for years. He pointed out while universities had dealt with rising costs, including wages and energy bills, over the best part of the past decade, the funding they received to teach undergraduates from Scotland and the rest of the UK had remained “stagnant”.

“This left us over-reliant on increases in international student numbers, which has proven an unstable model as geo-politics grow increasingly volatile and the UK’s attractiveness has declined,” he said.

Prof Mathieson, who is a member of the board at the Scottish Funding Council, also said Scottish institutions were in an “even worse situation” than their counterparts in England, which he attributed to a system that funds ‘home’ students “even less adequately”. He said the modest increase in funding received by Scottish universities for students from elsewhere in the UK was being “obliterated” by National Insurance rises.

Old College buildings at the University of Edinburgh. Picture: Scott Louden/NationalWorld | JPI Media License

Claire McPherson, director of Universities Scotland, said it was crucial Scotland had a “meaningful conversation” about funding universities on a “sustainable and competitive basis”.

She said: “For years, any conversation on funding has run straight into the issue of ‘free versus fees’, which has meant the opportunity for a much-needed focus on sustainable funding has been missed. Scotland needs to chart its own course, taking a strategic and long-term look at how we can evolve funding and student finance to be more progressive, to meet future skills needs and Scotland’s changing demographics.

“There are acute pressures facing institutions now, which need to be addressed, but we also need to look beyond the short term and work towards a lasting solution.”

Mary Senior, of the Universities and Colleges Union (UCU), said Prof Mathieson was right to identify consistent underfunding of higher education as a “significant and pressing problem”, and stressed those politicians wishing to take credit for the free tuition policy “need to pay for it”.

She said: “We’re clear that free tuition is the right policy and was backed by all the major parties in last year's general election. Politicians need to understand that unless we see increased funding for universities, those voices in the sector and in politics who have always argued against free tuition will continue to become louder and emboldened.”

However, Ms Senior said there was “no need” for the magnitude of the cuts proposed at the University of Edinburgh, warning “the answer can’t be to saddle students with more debt or for university principals to take advantage of a national crisis to make savage and unnecessary cuts”.

Higher Education minister Graeme Dey said: “The sector is aware we are open to exploring the future funding model of universities, but I have been clear this Government will not reintroduce tuition fees. Access to higher education must be based on the ability to learn, not the ability to pay.

“Indeed, the latest UCAS data shows our continued investment in free tuition means record numbers of Scots are securing a university place – including record numbers from the most deprived areas.

“Scottish Funding Council indicative allocations announced last week increase the investment in teaching per Scottish student and include a 3.6 per cent increase in core funding for research and innovation, meeting a direct ask from the sector which will benefit Scottish universities.

“Clearly there remain broader financial pressures facing the sector, including the UK Government’s migration policies, while its increase to employer National Insurance contributions is estimated to cost Scottish universities more than £48 million. The Scottish Government and SFC will continue to work closely with the sector and its representative body, Universities Scotland, on its sustainability into the future.”

Scottish Conservative shadow education secretary Miles Briggs said: “Sir Peter’s comments show that the crisis in Scotland’s universities extends far beyond Dundee’s current funding emergency, and that the SNP’s current approach is unstable and unsustainable.

“Their policies have left Scotland’s world-leading universities facing more difficult circumstances than their counterparts in England. Everyone knows that we need an urgent rethink, but so far the Scottish Conservatives are the only party advancing a debate on innovative solutions to SNP failures on education.”

Scottish Labour’s education spokeswoman Pam Duncan-Glancy said “While the specific circumstances in Dundee brought this to the fore, many universities have been raising the alarm on the SNPs broken system for years and many are struggling as a result of the SNP’s broken funding model.

“While Scottish Labour is committed to free tuition, we have pledged to work in partnership with universities to develop a new funding model that provides opportunities for Scottish students and allows our world-class universities to thrive.”