Leaders call Scottish university funding model into question

The University of Edinburgh Principal and Vice-Chancellor Professor Sir Peter Mathieson, Principal and Vice Chancellor of the University of the West of Scotland Professor James Miller, and Audrey Cumberford, Principal and Chief Executive at Edinburgh College, all submitted essays describing the unique challenges facing Scotland’s universities and colleges in the context of a call for UK-wide change.

The overall theme of the collection examined how the UK can benefit from a tertiary model for higher and further education – essentially, integrating academic, technical and vocational education – but different approaches from each devolved government create funding models that are at odds with one another and threaten instability.

‘Highly political and consistently unstable’

In an earlier investigation for KCL into the state of higher education, KCL Vice-Chancellor Professor Shitij Kapur described a “triangle of sadness” in which UK universities are caught between “aspiring but anxious’ students, “stretched and ambivalent” governments, and “beleaguered university staff.”

Prof Kapur said it is unclear if UK universities can survive with the current model. The warning has been brought before elected officials in Holyrood and Westminster on more than one occasion.

This was echoed by KCL’s Professor Dame Alison Wolf  and Dr Eliel Cohento in their introduction to“Higher, Further or Tertiary?”, where they described the UK’s model as “highly political and consistently unstable.”

In summarising the essay collection, the KCL report highlighted how each devolved government’s approach to university funding, driven by distinct priorities, created unique local problems and led to inconsistencies in a UK-wide system that should be otherwise unified.

Scotland’s approach to higher education funding received particular attention, especially the Scottish Government’s commitment to fund Scottish undergraduate placements.

In his essay “The cost of ‘free’ higher education”, Prof Miller wrote that the government’s goal of making ability and not wealth the basis for university admission is overshadowed by practical complications.

Practice isn’t perfect

Prof Miller explained that the Scottish Government provides home universities with £1,820 per Scottish undergraduate per year (the same since 2009), plus additional grant money dependent on the cost of the degree programme. 

The Scottish Government can also “cap” placements for Scottish students. Theoretically, Prof Miller wrote, universities can accept as many Scottish students as they choose. However, falling below their allocation can trigger clawbacks, while going too far above it can lead to reduced funding or penalties.

Professor James Miller, Principal and Vice-Chancellor of University of the West of Scotland (Image: Peter Devlin)

All of this should be balanced by the fact that set prices and places create a stable funding environment. But Prof Miller wrote that isn’t the case.

“The reliance on government funding makes universities vulnerable to policy changes, political priorities and budget cuts.”

These problems are exaggerated because universities – which plan in four-year student cycles in many ways – are subject to yearly funding changes.

This “creates a complex environment in which to plan strategically and, where necessary, to implement immediate change,” he wrote.

‘Under-funded’ and over-reliant

One of the few ways that Scottish universities can withstand this financial volatility is through recruiting and enrolling international students, whose fees can sometimes be 20 times what universities receive for domestic students.

In his essay “Calm consideration, please”, Sir Peter Mathieson suggested that the only two “significant sources of revenue” at the University of Edinburgh are international fees and re-investments, such as letting out vacant accommodation during the busy Fringe season. 

But there may be a third option. Referencing a piece he wrote for The Herald in 2023, Sir Peter suggested “calm consideration” of potential changes to the student fee structure in Scotland. Among these are having graduates with above-average salaries contribute towards tuition or allowing wealthy families to pay tuition fees, regardless of placement caps, as long as they meet admission requirements.

His suggestion sparked controversy in 2023 when first published, but Sir Peter has called again for a measured discussion about how the university system needs to adapt.

“UK universities are inadequately funded for the education of domestic students and for most of their research, such that their survival depends upon cross-subsidy, mostly from the higher tuition fees paid by international students.

“International students contribute massively to our campus culture, to the cosmopolitan nature of the university experience for our home students and staff, to the UK economy and to the global spread of the outcomes of UK education, but it is inescapably true that they are also financially propping up an under-funded UK higher education sector."

Developing a tertiary system that integrates higher and further education models is generally considered the best approach by the authors in the KCL collection. However, the essays describe a reality in which that goal is not realised.

Edinburgh College's Audrey Cumberford described how Scotland's college system, strengthened by its regionalised approach, is well-situated to strengthen integration between employers, universities and schools. She referenced comments from Professor Sir Peter Scott, former Commissioner for Fair Access, who said Scotland was in a "better position to develop a truly flexible tertiary education system than any other UK nation."

But that promise is in danger, Ms Cumberford wrote, with the sector at a "tipping point" financially despite urgently needed reforms. Scotland's colleges deliver approximately 13% of higher education in the country but receive 36% less income per student than universities, and successive funding cuts have left the sector facing a budget gap of nearly half a billion pounds. 

"The case for reform is clear," Ms Cumberford wrote, with Scotland's colleges playing a key role in any tertiary developments.

"It is vital that we invest in the education, skills planning and delivery needed to drive the economy and society of the future.

"But is there now a case to also consider a review of the funding environment, underpinning the recognised need for wider reform?"