How can we solve the higher education funding crisis in Scotland?

SITTING in the midst of the usually buzzing Strathclyde University campus, you might be forgiven for forgetting that – with three weeks to go till polling day – a General Election campaign is raging across the country. Term finished last month and very few students are still here.

Traditionally, party leaders are concerned about the student vote. Some woo (think Jeremy Corbyn) with eye-catching pledges, while others attempt to dodge the issue by timing elections, like this one, ­outside term dates (see also Boris Johnson).

Then there are those who make promises on ­student issues which they don’t keep. Who can ­forget the LibDem U-turn on abolishing fees when it agreed to form a coalition government with the Conservatives in 2010?

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Almost 13 years ago, Strathclyde University’s ­Collins building – just down the steep hill from the step where I’m sitting in Rottenrow Gardens – was occupied by furious students, protesting the decision by the university to impose annual fees of £9000 for students from England, Northern Ireland and Wales. The fees were in line with the cap raised by the ­Conservative and LibDem coalition south of the Border.

For Scottish students studying at home, the ­situation has been very different. When fees were introduced in England by the Labour government in 1998, Scotland brought in a graduate endowment set at £2000.

It was abolished in favour of free tuition by the SNP government. “The rocks will melt with the sun ­before I allow tuition fees to be imposed on ­Scotland’s ­students,” then first minister Alex Salmond famously boasted at the time.

A piece of public art – bearing that legend – once graced the grounds of Heriot-Watt University but it was removed in 2020. Last year, that ­institution ­received 40% of its income from fees paid by ­international students – an essential source of funding for almost all Scottish universities.

But with the number of international students ­declining dramatically last year following ­restrictive Home Office immigration rules, a decade of real-terms cuts by the Scottish Government and ­increasing ­research and capital costs, Scottish universities now find themselves in the midst of a growing financial crisis.

Those un-melted rocks are suddenly in the sun’s full glare.

At least 10 of 19 institutions are expected to be in deficit in 2023-24. Last week, Universities ­Scotland took its concerns to the Scottish Parliament’s ­Education, Children and Young People Committee, with a submission it claimed was its “most candid assessment of the financial pressures on universities” it had ever given.

The sector body says the real challenge is coming down the track in three to five years. It’s called for “thoughtful engagement” that avoids the trap of the “free versus fee” discussion.

So how did Scotland – with its historic reputation for excellence in higher education – find itself here?

“Until about 10 years ago, the funding for each ­student’s place was roughly in line with what it ­actually cost to teach that student,” explains the ­National Union of Students (NUS) Scotland ­president Ellie Gomersall, whom I’ve come to the Strathclyde ­University campus to meet.

“That was increasing with inflation each year and it was workable,” she explains. But then the funding level stalled while inflation rose. “That was felt as real-term cuts.”

Last year, the Institute of Fiscal Studies found there was a gap of £2020 per year between what ­Scottish universities receive for each Scottish ­student they take on compared with what English unis receive for an English student. Here that shortfall has been ­subsidised to a greater extent by the growth in ­international students who pay fees of £30,000 and upwards.

The sector is still reeling from some recent shocks. Last November, Aberdeen University – founded in 1495 and considered one of Scotland’s four ­“ancients” along with Edinburgh, Glasgow and

St Andrews – announced it was scrapping degrees in French, Gaelic, German and Spanish and ­making compulsory redundancies. It later agreed to keep joint honours in place and offer voluntary severance packages instead.

In its most recent annual report, the university laid out “significant doubt” over its ability to continue as a going concern. It has since confirmed it has made savings, putting it on firmer financial footing.

But according to social science and languages staff who spoke to The Ferret on the condition of anonymity, all is still not well.

“The fact that the decision about modern languages was being made because it was unprofitable meant that immediately others working in humanities and social sciences started looking at the progress of their modestly funded ­degree programmes with terror,” said one staff member.

Vacancies are routinely not filled, he said, meaning students are being taught by non-specialists “and the quality of education therefore is going to decrease”. “It also means less contact time, larger groups and more standardised assignments,” he added.

The extent of the challenges are not lost on staff at Aberdeen. Yet there’s also a distrust of ­management. “As a group, university managers are singularly ­ill-equipped to address this crisis,” one humanities lecturer told us, claiming staff in the sector, who have seen a real-terms cut of 17% in pay, are “angry and demoralised”.

“Part of the solution has to be that we end the ­regime of secrecy and talk openly about the best way to tackle this,” another staff member said. “This is in the interests of both students and the Scottish public.”

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Aberdeen University said it was proud of the “outstanding education and ­student experience” its staff provide “­despite the challenging financial circumstances”. A spokesperson said it had been “very open” with its community about its difficulties, holding all-staff meetings and sharing actions being taken.

But high pay in the upper echelons doesn’t help engender good relations. Like most principals, George Boyne, the Aberdeen principal, is paid a lot – his ­package was worth almost £300,000 per year, including pension and free ­university accommodation. Edinburgh University’s Peter Matheson earned £418,000 last year.

Looking for solutions

Finding solutions is thorny. Most ­acknowledge tackling high pay might be desirable, but will not fix the bigger issue.

There are also calls for reforms to ­immigration rules if a new government is in power next month, which would make the UK more attractive to international students again.

“The way the UK immigration ­system operates when it comes to ­international students is really regressive now,” says Professor Alison Phipps, Unesco chair in refugee integration at ­Glasgow ­University. “The simple solution is to take international students out of the ­migration count.” But that requires Home Office approval.

Others believe there’s a need to ­reconfigure public money so that wealthy institutions like Edinburgh University, which has reserves of about £2.5 ­billion (some of it restricted), receive less and the most cash-strapped – such as the ­so-called “post-92” unis, which were ­formerly ­colleges – get more.

(Image: NQ)

Scottish Greens education spokesperson Ross Greer (above) says: “There is a clear case for reducing the public funding ­given to institutions with excessive ­reserves and redistributing that money to the universities who are teetering on the edge of financial viability.”

But the controversial prospect of ­reintroducing fees, graduate taxes or ­endowments is one response that’s been repeatedly touted.

According to Dr Gavan Conlon, a ­partner of consultancy London ­Economics, who gave evidence to the Scottish Parliament earlier this month, the Scottish Government puts five times as much into university education as the UK Government does in England. ­Despite that, institutions are less well funded.

“There has to be some form of ­additional cost passed on to graduates,” was his ­conclusion following a ­comparative study of the differing approaches of UK nations to higher education (HE) funding.

“[Scottish students studying in ­Scotland] do not pay enough in ­comparison with those elsewhere in the UK,” he told the committee.

“By ­introducing the English system in ­Scotland, that would, overnight, save the Scottish Government 40% of its total cost for higher education.”

It’s not a new position. In August 2022, Scottish think tank Reform Scotland launched a paper claiming that Scottish student numbers were being “capped” artificially because they did not pay fees and argued for “deferred fees” to be ­repaid once they were earning more than the Scottish average salary.

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In fact, as of 2021-22, there were more student places for Scottish students than ever before.

In May 2023, Edinburgh University principal Mathieson said there was a need for “calm consideration” of student fees. Then last week, Paul Grice, Queen Margaret’s University principal and ­vice-convener of Universities Scotland, backed the idea of a cross-party ­commission to take forward discussions – including on the reintroduction of fees.

Like his colleagues, Universities ­Scotland convenor Iain Gillespie is keen not to be drawn into a binary ­conversation on the issue. It’s complex, he says, ­because if the Scottish ­Government was simply to go back to funding each student to the tune of what it really costs, that wouldn’t address all of the ­universities’ woes.

“In terms of research, we are still ­structurally underfunded,” he says. “We get significantly less for our research ­dollar than we did. We also have an ­ageing estate and a need for capital ­investment.”

But he insists there are questions about whether it is in fact “just and equitable” for unis to be funded only by the ­taxpayer. “Who benefits?,” he asks. “Firstly, the state and the country as a whole benefit; secondly, it’s the individual and thirdly it is the employer who benefits from the ­education of graduates. I think there is discussion to be had about how those ­actors pay for the benefits.”

Gillespie, who currently earns £316,000 as principal and vice ­chancellor of Dundee University, has “a very ­personal example”. His son is at Glasgow ­University benefiting from Scotland’s universal free education.

“Why is it fair that I get subsidised by the public purse?” he asks.

Despite criticism of the high pay ­culture, he insists universities “do a ­brilliant job in making efficiencies” and says there is a need to “attract the right talent, skills and experience”.

The Scottish Government, ­however, has no plans to introduce fees. On ­Thursday’s ITV debate, SNP Westminster leader Stephen Flynn (below) made a point of ­positioning himself as the only candidate on the podium backing a position of free tuition, which he said was “life changing” for young people in Scotland.

(Image: PA)

NUS’s Gomersall takes comfort in both the Scottish Government and Scottish ­political parties’ support for free tuition.

“Free tuition for Scottish undergrad students is non-negotiable for us,” she says. “Any party that proposes or puts in place any form of tuition fees should know that the student movement will do to that ­party what we did to the ­LibDems in 2011. There’s a principle ­behind ­universal free tuition, which is that a more educated society benefits ­everyone.”

Students, she points out, are already getting into huge amounts of debt due to maintenance loans – used to pay for costs at university and paid back with ­interest when students are earning. ­Student accommodation in Edinburgh, for ­example, ranges from £180 to £295 a week.

If fees were introduced, they would be met for some students by ­affluent parents, she says, while students from less well-off families will have to pay off debts, ­potentially for 30 years. ­Instead, ­Gomersall suggests, “progressive ­taxation” would ensure those “with the broadest shoulders” contribute the most.

There are concerns too that hard-won progress on widening access would be lost if fees were introduced. In 2020, research by University and College Union (UCU) Scotland found two-thirds of university applicants living in Scotland would delay starting if fees were introduced. More than a quarter (26%) said they simply wouldn’t be able to afford to go.

That chimes with Glasgow ­University medical student Shannon. People at her school in the relatively deprived ­Rutherglen, to the south east of ­Glasgow, didn’t study medicine. But following Shannon’s example, more kids from her school have now gone on to study the ­degree.

She was supported through Reach, a widening participation programme, ­supported by the Scottish Funding ­Council and running at the universities of Aberdeen, Dundee, Edinburgh, St Andrews and Glasgow.

She did not get a maintenance grant, which wouldn’t need to be paid back, and will graduate with debt from ­student loans. “I can confidently say that if ­Scotland didn’t provide tuition fees, I would not be in university at this time,” she says firmly. “I would have had to come to terms with another route, and maybe returning as a mature student.”

However, to Jim Dickinson, associate editor at online higher education site Wonkhe, the division between the cost of tuition fees and the cost of living while at university is a false dichotomy.

“In the Republic of Ireland, students pay a contribution of €3000 (£2532) that goes towards student welfare and other costs and the government there still talks about free tuition,” he tells The Ferret. “The same is true in Germany and ­elsewhere in Europe.” In theory, he says, Scottish universities could ask for a means-tested contribution in the same way – which only the better-off would pay.

The tuition point is political, he says. “With a bit of political bravery, the ­Scottish Government could try really i­nteresting things. But because of the symbolism of that policy, it apparently won’t shift.”

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High pay, he says, is a red herring in terms of the sustainability crisis. “But senior pay looks egregious,” he adds, when you start asking employers and ­graduates to start paying their way. “There are other countries, such as the Netherlands, where quasi-public sector pay is capped.”

Mary Senior, Scotland official for the UCU union, agrees that such high pay is “indefensible” in the midst of a crisis. She also thinks that in the debate over fees, an important point has been missed. While English students pay fees, “the reality is there are even greater challenges there”.

“So many staff in England are facing redundancies,” she says. “Universities are also facing a real-terms cut because the tuition fee level in England has not ­­really changed. I think we can see from the ­English experience that the ­marketisation approach doesn’t work.”

Not only does UCU fully support free tuition for students living in Scotland – it would like to go further. Along with ­others, she would like to see an end to the way international students are treated “like a cash cow”.

She would like employers to ­contribute more. “In England, we are actively ­campaigning against tuition fees and ­looking at an employer levy of 1% on employer contributions for graduates or a 3% on corporation tax,” she explains. That, the union argues, could support the scrapping of tuition fees at no cost to the exchequer.

In Scotland, an employer levy is also one of the ideas raised by university principals like Iain Gillespie as a potential solution to explore.

(Image: NQ)

Back on Strathclyde University campus, ­Gomersall (above) is also keen to find solutions. It’s an issue we have to get right, she says. “Education lifts people out of poverty. Is absolutely essential to a lot of people being able to lead a fulfilling life, to be able to contribute to society in whatever way they want to do. Whatever happens next, we have to remember that.”

The Scottish Government said it was “resolute in its commitment to free tuition” and claimed universities played a pivotal role in Scotland’s economy.

Response to the University funding crisis - ways we were told could help 

1. Support universal free tuition with more progressive tax measures.
2. Introduce fees or combine state support with a graduate contribution.
3. Set-up an employers’ levy to ensure they are contributing.
4. Redistribute public money so that those with huge reserves get less and those without get more 
5. Reform immigration policies to attract more international students
6. Work with local authorities to ensure adequate housing supply for all students, keeping rental costs down so living costs are reduced.
7. Cap high pay of senior managers and tighten university spending on buildings perceived as "vanity projects".

Additional reporting by Paul Dobson