University leaders have taken the “unprecedented” step of revising their initial budget proposal by asking the Scottish Government for an extra £49m, one month after calling for a £25.8m uplift on teaching funding compared to last year.

The umbrella group Universities Scotland submitted its budget bid in early October, calling for a teaching resource of £786.5m

However, after the UK Government announced that employer national insurance contributions would increase this year, Universities Scotland estimated that the policy would add an extra £45m to the sector's costs.

The Institute for Fiscal Studies recently published a report saying that the estimate could be on the lower end. Instead, universities might see a bill closer to £60m extra.

To compensate, Universities Scotland revised their budget proposal this week.

They are now calling for an extra £49m. This brings the total teaching resource request to £827.5, which would be £66.8m more than the current academic year.

However, they say this still leaves the sector £20m short of what it would have had if the budget were maintained in real terms since the 2023-2024 academic year.

Universities Scotland director Claire McPherson said that despite the cash values, the call for more money is about trying to achieve stability, not growth.

"Our original budget bid was very much pitched at understanding the financial reality facing the government, understanding the need to be proportionate, and saying that our ask this year will not fix all the problems within the system but it would have offered some stability.

“Yet, the last month has seen universities' context shift significantly for the worse. They now have an extra £45 million in costs to cover and there is absolutely no scope to meet that within existing budgets because of the pattern of public funding over the last decade.

“The hard reality facing universities is an awful combination of both new and long-standing funding pressures."

However, Ms McPherson said that universities understand the significant pressures on the government.

This is why they are also asking the Scottish Government to consider “innovative and creative” ways of increasing its resources for funding Scottish students without placing an even bigger burden on the public purse.

Among these is a call for the government to change how it handles so-called “SQA places,” which are funded places for Scottish students due to be removed from the sector’s budget this year.

In the 2020-2021 academic year, the Scottish Government and Scottish Funding Council (SFC) began allowing for extra funded Scottish students places in response to an increase in SQA qualifications awarded in 2020.

In 2020-2021, the SFC added 1,297 full-time equivalent (FTE) places worth £7.2m. The next year, the SFC added a further 2,500 FTE places worth £13.9m

The government committed to funding those students until the end of their studies, when the government will then remove the extra places and associated funding.

The first cohort of SQA places was removed from the sector’s budget ahead of this year, resulting in a loss of £6.4m according to the SFC.

The final cohort of 2,500 SQA places is scheduled to depart at the end of this academic year. The SFC has estimated that this portion is worth another £14.3m.

Universities Scotland has made a specific request about these places: remove them but keep the associated funding. This would mean that an extra £14.3m could be spread across 2,500 fewer student places with no change in cash contributions.

Funding per student is a critical measurement. The IFS’s recent report found that per-student funding for Scotland is roughly £7,530, 22% less than in the 2013-2014 academic year.

Ms McPherson said that, given the recent increase in university costs and the ability of English universities to charge more tuition for home students, it’s important not to let investment in Scottish students fall further behind.

"As a sector, we think that when those SQA places went in, it was the right decision from Government. It was a Covid response and it was a decision made for all of the right reasons.

“But as those places are now coming out of the system, it's the right decision to repurpose that resource to invest in Scottish students. We’re asking the Scottish Government to save where it can, to then spend that on Scottish students within the public funding model. 

“This is a no-cost way for the Scottish Government to make existing resource go as far as possible to increase investment in Scottish students."

A Scottish Government spokesperson said that budget discussions are ongoing and that its decisions will be reflected in the draft budget when it is published on December 4.

“The Scottish Government appreciates the valuable contribution universities make to Scotland’s economy and wider society. That is why we continue to invest over £1 billion in the sector to support the delivery of excellent teaching, research and innovation."