A paper published by the University of Aberdeen shows “significant doubt” was raised over the ancient institution’s future.

The annual report reveals rising costs, a fall in the number of international students and a cut to government funding, led to doubts the 500-year-old university could continue as a going concern.

However, the university said since the report was drafted, costs have been cut by £18.5 million and the university is now on a “firm financial footing for the future”.

Senior governor Julie Ashworth said in welcoming remarks within the 2023 report that the financial challenges facing the institution were “considerable” and would remain so “for some time”.

Professor George Boyne, the university’s principal and vice-chancellor, said in his introduction a reduction in international student numbers in 2023-24 would have a “significant impact” on finances this year and the years ahead.

He also said public funding for teaching and research has been falling in real terms for a decade, with a reduction of £4.7 million taking effect in 2023-24, and further cuts expected soon.

“To bring the university back to a positive financial position, our financial recovery plan for 2023-24 and subsequent years will address the additional challenges of rising costs, lower public funding and a reduction in our international on-campus student recruitment,” he said.

“Other factors including political, economic and social developments beyond our control will also need to be taken into account.”

The paper went on to state a range of measures were identified to make further savings and return the university to a “stronger financial position” including a review of estate management and the sale of surplus assets.

It also warned that, given about 60% of total expenditure relates to staffing, “it is inevitable that further options around levels of pay and the size and shape of the university must also be considered”.

A University of Aberdeen spokesperson said: “The annual report, which we began drafting some months ago, set out the potential risk if the University of Aberdeen had not taken swift, highly effective action to address financial challenges.

“The university has now reduced costs by a substantial £18.5 million and is consequently on a firm financial footing for the future.

“Universities have been impacted by the UK Government’s stance on migration which has led to a sudden sharp fall in income from international student fees.

“The Institute of Fiscal Studies highlights that Scottish universities are also impacted by a fall of 19% over a decade in the value of Scottish Government funding.

“Our financial situation has radically changed because of early retirement, voluntary severance, and operational efficiencies, as well as a major drive to grow and diversify our income.

“The University of Aberdeen has been around for over 500 years. We are very confident that with continued agile, effective action we will survive and thrive, whatever the challenges facing the higher education sector.”