Scotland’s universities are facing one of the biggest shake-ups of who teaches what and where in their centuries-long history.

As they battle a Covid blackhole in their finances, higher education institutions expect civil servants to try and demand a bigger say on what they do.

The Scottish Government and its Scottish Funding Council (SFC) last month announced a consultation on how to get through a predicted sector-wide deficit of up to £400m.

A briefing note on “coherent provision and sustainability” from the SFC also raised the prospect of government funders becoming far more involved in decisions on teaching.  “Institutions matter. Some have been with us for centuries, with deep roots in our past and present. “They will matter for future generations,” the SFC said before adding: “That said, we will be considering the overarching framework that can further develop a connected, collaborative ecosystem for learning and teaching and research; reflects government and tertiary education objectives; and secures accountability for public funding.”

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This language worries some university insiders. Some academics fear a creeping “federalisation” of their institutions, the idea that there might be a de-facto overarching decision-making umbrella above individual universities. Or, at the very least, that universities would have to accept some co-ordination on what they teach.

Universities in Scotland already face effective rationing on student numbers on certain courses, because of both funding and practical considerations. Medical schools, for example, cannot teach more doctors or nurses than the NHS can offer placements too.

However, there is nervousness inside universities about how they balance teaching to meet the SFC’s “government objectives” and to cater to what students actually want to learn.

David Lott, deputy director of Universities Scotland, struck a diplomatic note. “Clearly Government is a major funder and there has always been a strategic dialogue between institutions and funders on the subject mix needed to meet the needs of industries and public services, “he said. “That will continue to be an important part of how universities decide on their offering to learners across the world. Ultimately it comes down to learner choice; what and where they want to study. It is important that higher education starts with their ambitions and meeting them with a high quality offer.”

There have been worries that government ministers or officials will see mergers as the solution to post-Covid austerity. The SNP has already overseen old local colleges brought together  in to regional giants.  Mr Lott said: “Mergers don’t save money. That’s been proven time and time again across a range of sectors. If there’s a solid academic rationale and business case for a merger, the institutions themselves will be exploring it.  Universities have always pursued strategic change and there are a lot of options universities can take to adapt provision and reconfigure how they work that are likely to be far more effective and efficient than mergers. The focus now should be on stabilisation and then adaptation and strategic change rather than focusing the number or institutions. Those conversations are happening now with the Funding Council as part of its Covid-inspired review of provision.”

In England, Education Secretary Gavin Williamson has signalled that universities - in return for support - must refocus more on STEM subjects and preparing a new generation of health workers and teachers in a new ‘restructuring regime’.

Scotland - to sighs of relief inside universities - is not going down that route. Ministers told stakeholders so last week.

The root of Scotland’s university funding crisis is that the government does not cover the full cost of tuition. So institutions raise money from commercial businesses and the fees of foreign students to plug the gap.  And it looks like many foreign students may not enrol this year. Indeed, there is uncertainty over domestic numbers too.

READ MORE: Coronavirus: Scottish universities could have to curtail research ambitions amid funding review

Mr Lott said: “When it comes to admissions and the intake for this next year, universities are in totally unchartered waters.  “Usually by this time in the cycle, when universities have received the Higher results and have matched pupils’ grades to the offers made, universities would have a very solid sense of the Scottish intake numbers. Even after results day, those acceptances can’t necessarily be relied on this year. And the picture for international students is even less certain. Having said that, universities are getting very positive feedback from students who are eager to get on with their lives and start university in the autumn.”

He added: ““The pandemic has tested universities and university finances on a scale never seen before. Earlier in the year we described it as an existential crisis. A lot of mitigating steps have been taken since then however, universities are still walking into the new academic year with some major unknowns and it’s this year where the biggest financial hit was always going to come for universities so there’s still an awful lot at stake.

 “It’s impossible to compare the impact of the coronavirus pandemic to anything that has come before but it is important to remember that this crisis coincides with the major upheaval and uncertainty of Brexit and, comes after a number of years of cuts by the Scottish Government to the funding of teaching and research. Universities’ financial resilience to cope with a crisis like this was already severely depleted.”

Universities Scotland wants the Scottish Government to cover the full cost of tuition.  Mr Lott said: “What has become crystal clear to everyone as a consequence of the pandemic, is the extent to which international students fees subsidise the cost of Scottish students’ education.”

The UCU, which represents university staff, welcomed Scotland’s decision not to follow England. Mary Senior, the union’s top Scottish official, said this was a “huge relief’, saying the ewe had an “incredibly narrow vision for the future of higher education”.  She added: “We are clear that to truly power economic and social recovery in Scotland we need to support the diversity, breadth and depth of our university sector. “This means valuing and resourcing the widening access work to bring new learners - young and old - to gain new skills and higher learning opportunities. It goes without saying that the vocational skills universities provide in science, technology, engineering - and medical science in particular - are crucial to get us through this pandemic. However we also need to invest in teaching, and supporting arts, humanities and social science disciplines which help us to understand the world in which we live.

“We do need the two governments to be working together to properly resource universities, so they are powering the education-led recovery, and not adding to the growing numbers of unemployed”.

There remain concerns that “overarching” strategic view from the Scottish Government might see universities slash certain kinds of courses, including foreign languages, especially if they are offered by a neighbouring institution.

Dundee University has already dumped German and several other institutions are understood to be considering scaling back languages in what linguists have said amounts to an ‘intellectual Brexit”.

The Scottish Government confirmed that it was opting out of the Williamson’s “restructuring regime” - though it said it would continue to work with the UK authorities - which play a key role in research funding.

A spokeswoman added:  “We eagerly await the outcome of the Scottish Funding Council’s review as the outputs of this will help inform our planning for the higher education sector and all tertiary education in Scotland.”