Covid-19 will see universities facing a reduced deficit than previously feared as the number of international students coming to Scotland has increased year-on-year, the higher education minister has said.
Richard Lochhead, speaking at the Education and Skills Committee in Holyrood, said the figures represented a “more encouraging” picture compared to earlier in the year.
He told MSPs that the predicted financial deficit for universities had reduced from an estimated worst-case scenario of £651 million to a deficit of £191 million while further education colleges have seen their deficit drop from £12 million to £9 million.
Several universities including the University of Edinburgh were facing potential compulsory redundancy schemes at their institutions, with Edinburgh warning it faced a financial black-hole which required savings of up to £150m.
Mr Lochhead told the committee that a more positive outlook in terms of the number of international students coming to study in Scotland meant the situation was not as dire as predicted in May.
He said there was an overall increase of three per cent in the number of international students accepting places in Scotland, another record year, but urged caution and said universities would not be certain until further into the academic year.
The minister said acceptances from EU students was down by five per cent, but international student acceptances have risen by 11 per cent.
He said: "That is very very encouraging. There is a difference between acceptances and who actually arrives to take up their place at university so that’s the big question mark we face at the moment.
"Universities gauge the level of international students by applications also who actually puts down a deposit for their accommodation and who actually gets a visa etcetera.
"In terms of the deposits for accommodation, 50 or 60 per cent so some universities may say they are expecting a 30 or 40 per cent decline, but these figures are changing all the time and of course some international students are not due to come until January.
“Others may take a decision that they may not come for various reasons so even though they have accepted their place, many international students accept places from various places universities across the world, so literally until we get to nearer the time the universities don’t know the exact numbers.
"The UCAS figures don’t include post-grads, many of our international students do post-grads, and they deal directly with universities and there is just mixed feedback coming from universities about post-graduates.
He added: "It is a much more encouraging figure in terms of international students and that’s a testament to the reputation of Scottish education but there is a lot of uncertainty because of the pandemic and for other reasons we know about so we shouldn’t get carried away at the moment.
"That is a much healthier place, it is still challenging, but it does give an indication that the international student situation is improving.”