Why top economist is 'sceptical' the SNP will deliver new £3bn university and colleges funding model by 2026

Doubts have been raised about the ability of the Scottish Government to significantly reform the way colleges and universities are funded during this Holyrood Parliament.

Professor Mairi Spowage, director of the Fraser of Allander Institute, said she remained “sceptical” of the timetable put forward for a new funding system that could follow a shake-up of the bodies that oversee further and higher education, and the delivery of apprenticeships. In June, it was announced ministers were consulting on two options for an overhaul of the Scottish Funding Council (SFC), Skills Development Scotland (SDS), and Students Awards Agency Scotland (SAAS).

One of the proposals would involve the “dissolution” of SAAS, with the SFC assuming full responsibility for all further and higher education student support and funding.  

Alternatively, SAAS could remain and take over all college student support funding and functions from the SFC, which would instead be handed responsibility for national training programmes from SDS. It was said any changes should help develop a new funding model for post-school education provision, and could be in place for the start of the 2026/27 academic year.

The move came a year after a review led by James Withers recommended significant reforms to these bodies.

However, Prof Spowage has now questioned the chances of the Government being able to deliver on these commitments before the next Scottish election in 2026.

In evidence to Holyrood’s education committee, the economist wrote: “There have been multiple reviews of the school and post school landscape in Scotland over the last few years. The perception externally is that the Scottish Government has been slow to respond to these many reviews.

“On 24th June, the Scottish Government finally published a consultation on post-school education and skills reform legislation. Whilst a new funding model for post-school education is out of scope of the review, the SG have said that the changes proposed will allow a new funding model to be developed.

“Given the pace of response so far, I remain sceptical that any new funding model will be developed and implemented in this session of Parliament.”

Consultation documents show staff at the SFC, SAAS and SDS could be impacted by any changes, with some potentially moving to different agencies.

Benefits cited include more flexibility in delivering apprenticeships, and the potential for “parity” of support for students at university and college, with those in further education currently unable to access the same level of means-tested bursaries and loans.

The proposals are a key part of the Government’s programme for education reform, with ministers already proceeding with plans to replace the Scottish Qualifications Authority and the creation of a new inspectorate of schools. Any changes would come amid a period of financial turmoil for colleges and universities in Scotland. In the past week, The Scotsman has reported on concerns raised by Perth College bosses about a wider restructure of the University of the Highlands and Islands, as well as how Aberdeen University has set aside £10m for more voluntary redundancies. Staff at Robert Gordon University are also being balloted for industrial action over compulsory redundancies.

A Scottish Government spokesperson said: “Ministers launched a major consultation on simplifying funding for universities, colleges and apprenticeships, as well as student support in June to help take forward one of the most significant recommendations of James Withers’ independent review of the skills delivery landscape.

“Work has already begun to improve the current funding arrangements, in response to the college tripartite group’s exploration of funding flexibilities. Work is also underway to consider funding of apprenticeships and student support.”