Exclusive:SNP 'cannot rule out' fresh cuts for Scotland's struggling universities and colleges

An SNP minister has warned Scotland’s beleaguered universities and colleges to prepare for fresh budget cuts as the nation descends into a public spending crisis.

Graeme Dey, the further and higher education minister, said he could not rule out a new squeeze on cash-strapped institutions, some of which are already on the brink after years of below-inflation settlements and a dramatic downturn in international student numbers.

But in an exclusive interview with Scotland on Sunday, Mr Dey insisted the SNP would never compromise on its commitment to “free tuition” for undergraduates.

Last night, universities warned they may have to make “real and unpopular decisions to survive”, while a college sector leader said “extremely tough choices” were already being made as a result of budgets being “severely cut”.

Mr Dey’s comments came after Finance Secretary Shona Robison warned this week that “exceptional measures” would have to be put place, including a freeze in recruitment in all but “essential frontline” posts, as ministers struggle to fund pay demands from across the public sector.

Ms Robison has also criticised the UK government for failing to ensure rises for some staff are fully funded.

In his first in-depth interview since being appointed to his role last year, Mr Dey admitted the pressures were “more difficult than we’ve faced up until now”.

He said: “I think the cabinet secretary has laid out the seriousness of the situation.

“We are not really going to know the scale of the challenges until we see the UK budget, but I think it is pretty clear that we are not going to suddenly emerge from some difficult and challenging times we have had, into something better. So that is obviously a concern.”

Mr Dey said he hoped to approach the budget in a different way, so that it is “the least painful it can be” for colleges and universities.

But when asked if further cuts were on the way, he said: “I can’t sit here today and rule that out.

“I think it has been made perfectly clear over the last couple of days, much as we may wish it was otherwise, the challenges that we face.”

It comes after the Scottish Government was heavily criticised last year for U-turning on a promised £46m for colleges and universities to help fund a pay deal for teachers. The next teachers pay deal is still to be agreed. The scale of the financial turmoil in Scotland’s colleges are so severe that several institutions were due to run out of money a few weeks ago, without Government support.

Meanwhile, industrial action by college lecturers is said to be reaching “boiling point” as it enters a new phase of strikes and a boycotting of student results in the coming days.

In higher education, it has emerged this week that Edinburgh University is placing “significant constraint” on recruitment, while “reducing spending in all areas”.

Robert Gordon University is also facing a strike over redundancies, while its neighbour, Aberdeen University, could not guarantee it would continue as a “going concern”, without its recovery plan, earlier this year.

Pressures in the sector have intensified as a result of a £28.5m cut to the teaching budget from the Scottish Government this year, following several years of below-inflation rises.

This has coincided with a huge 20 per cent drop in the number of students from overseas enrolling in taught postgraduate courses, leaving a £100m hole in universities’ plans. Mr Dey paused when asked if he believed Scotland would still have the same number of universities and colleges in a few years.

“What I think the next few years may bring is a different model of cooperation across the two sectors,” he said.

“There are some quite healthy conversations going on, and relationships being developed, between universities and colleges, which are to the benefit of both, and certainly to the benefit of students. And I think we will see more of that.

“Now, that won’t be driven by the Government, it will be driven by the institutions.”

He added: “We all recognise that a number of colleges and some universities face bigger challenges than others, and the SFC (Scottish Funding Council) is working closely with those, but I stress that any changes in the landscape, if there were to be, would be driven by those institutions. And we’ll see what that might look like, if it happens.”

The crisis has led to renewed calls for ministers to “compromise” on their policy of “free tuition” for Scottish undergraduates, which universities say is not properly funded, leaving them over-reliant on the fees of international students.

Pressed on whether he ever envisaged an SNP government changing its stance on free tuition, Mr Dey said: “No I don’t. We are committed to free tuition.

“Our universities, let’s be honest about it, have large numbers of Scottish students in there because of free tuition.

“There are a huge number of students who would reconsider whether they could afford to go to university, or not go to university, if tuition fees were introduced, and we have to be cognizant of that.

“Now of course, I talk to the universities a lot. I appreciate it sometimes is portrayed as being binary argument - tuition fees or no tuition fees.

“Conversations that they have had with me is, they understand free tuition, they understand its benefits, we just want to have a conversation about that longer term.”

The minister added: “I understand their concerns about their cost base, their reliance on international students. We are alive to the risks associated with our universities. Those risks would be there regardless of the funding mechanism.

“So we at all times are happy to have a discussion. Our starting point is tuition is free. But I would stress conversations need not be binary in that regard, we can have conversations about aspects of the funding model.”

Mr Dey added: “Our position is absolutely clear. I don’t envisage that changing. A succession of first ministers have been very clear on the SNP’s commitment to that. But there are always broader conversations about other aspects about how we deliver funding.”

A spokesperson for umbrella body Universities Scotland said: “The fiscal challenges facing Scotland’s universities are no secret, and all institutions are considering steps they need to take to best protect their sustainability, and most importantly – their ability to educate and support students and deliver world class research.

“Falling levels of investment by the Scottish Government means that the current funding model is increasingly dependent on high levels of cross-subsidy from international student fees.

“The volatility in that market has been laid bare in the last 12 months and without consistent public sector funding, universities may have to make real and unpopular decisions to survive.”

The spokesperson added: “The number of Scottish domiciled students attending university continues to rise, whilst in the background, Government funding in each individual student is seriously eroded by lack of investment. This is unsustainable.

“We welcome the recognition it is time to move past the binary nature of the ‘fees vs no fees’ argument and to have an honest and constructive discussion about what a financially stable university sector looks like, well into the future.”

Shona Struthers, chief executive of Colleges Scotland, said: “The Scottish Government is clearly experiencing dire financial circumstances around public spending.

“But investment into Scotland’s colleges has already fallen sharply by 8.5 per cent in real terms between 2021/22 and 2023/24 – the college sector has already been severely cut.

“Currently college leaders are making extremely tough choices while maintaining and improving the quality of education and training on offer.

“Students, their parents, employers, and the wider public rightly expect that college education is sustainably funded, and that the college system is being protected for the future, and not undermined by continuous cuts.

“Colleges are agile organisations and are poised to thrive with sustainable investment.

“College leaders have been very pro-active in engaging with the Scottish Government’s reform agenda but at the absolute heart of this discussion is the quality of the experience for college students.

“Research has shown that the Scottish economy will be £52 billion better off cumulatively over the 40-year working life of college graduates - their talents and skills are the backbone of vital industries like transport, hospitality, and social care. Investment to maintain and grow college success is essential.”