Scottish university posts £14.4m deficit after cyber attack and fall in student numbers

A Scottish university has become the latest to highlight a deterioration in its financial position, posting a deficit of £14.4million in its accounts for 2023/24.

The loss at the University of the West of Scotland (UWS) comes after it recorded a surplus of £2.5m in 2022/23.

The downturn came as student numbers dropped at the institution from 22,088 to 20,514 last year.

The University of the West of Scotland reported a positive experience. | Google Maps

In its annual report, the university said a “multi-year concerted effort” was required to restore student numbers to “desired” levels, while continuing to “manage the cost base very tightly to protect reserves and preserve jobs”.

Despite a “modest” £2.1m uplift in overall income, the cost of recovering from a cyber attack in 2023, along with other pressures, led to an increase in expenditure of £18.3m compared to the previous year.

A criminal ransomware group was said to have been behind the attack, which aimed to use stolen data to extort the university.

For a second year, UWS also experienced a “significant shortfall” in domestic student recruitment, leading to a decrease in Scottish student tuition fee income of £1.8m.

A UWS spokesperson said: “In common with the rest of the higher education sector across the UK, the university is operating in very challenging financial environment exacerbated by external factors that have driven a significant change in the size and shape of our student population as well as costs associated with the recovery from the criminal cyber-attack in July 2023.

“Our university court approved a multi-year recovery plan in April 2024 that included several actions, some of which have, thus far had the desired impact.

“Throughout this period, we have continued to ensure our colleagues, university court and trade union partners are directly informed through regular meetings and briefings on the proportionate suite of actions we have been taking to manage both income and expenditure to mitigate unanticipated financial headwinds such as increased pension contributions and the rise in employer’s national insurance contributions.”

Universities across the UK have been reporting a downturn in their finances in recent weeks, often in part due to a drop in postgraduate international students, which has been blamed on the visa changes and rhetoric on immigration of the previous Conservative government at Westminster.

Inflationary pressures and real terms cuts to government funding in Scotland have also contributed.

St Andrews University posted an underlying operating deficit of £13m, up from £5.5m in 2022/23.

While the UWS overall deficit for last year was £14.4m, its underlying deficit, before gains on investment or asset sales, was £15.3m.

Glasgow University’s accounts, meanwhile, showed a surplus of £28.7m, down from £68.2m in the previous year, and £142.3m in 2021/22.

It highlighted a “more challenging international recruitment cycle”, with total student FTE numbers falling from 33,961 to 31,642, mainly because of a reduction of 1,978 international students, which was “due partly to a planned reduction in growth combined with market forces”.

Edinburgh Napier University had a surplus before exceptional items of £2m in 2023/24, down from £8.6m.

And the University of the Highlands and Islands (UHI) recorded a surplus before other gains and losses of £4.6m, compared to a surplus of £700,000 in 2022/23.