Anton Muscatelli’s newly released paper, The Funding Gap Analysis Report, is as stark a warning to the Scottish Government about the extent of the fiscal deficit within Scotland’s higher education sector as you can possibly get.
Two of the warnings included in the report are:
- The funding universities receive and the income they generate is not sufficient to sustain their core activities of teaching or research, creating a funding gap between cost and all sources of income of around £200 million in 2023/24.
- The data present a funding gap pattern, not a single-year anomaly. Scotland’s universities have collectively operated below full economic cost recovery throughout most of the period from 2016/17 to 2023/24. There was only one year this was not the case
This is, of course, not the first time that very worrying numbers have been presented to ministers nor is it the first time that ministers have been told that there has to be radical reform to the funding model if there is to be a sustainable future for our universities and one that is fair to all students across the board.
Way back in 2010, the late Lord Sutherland, former Principal at Edinburgh University, warned the SNP that its “free tuition” funding model would undermine Scotland’s international competitiveness in higher education and damage both research and the economy more generally. Sir Andrew Cubie tried again in 2017 to focus ministers’ minds but, like Lord Sutherland, he was largely ignored.
Just last weekend, Nick Hillman, one time advisor to David Willetts, argued cogently in the Sunday Times about why Scotland’s higher education sector is facing the “biggest funding crisis of any part of the UK.” Like so many economic analysts, he points to the fact that Scottish universities have, on average, 24% less to spend on Scottish students because the Scottish Government refuses to fill the tuition fee gap.
So far, the Scottish Government – because of its so-called “social contract with the people of Scotland – will not countenance any reform whatsoever to the funding model. “Free tuition” is treated as sacrosanct. This is dangerously simplistic and it undermines the huge potential of Scotland’s higher education sector.
Of course, tuition isn’t free at all. The state is paying.
For years, as a result of the SNP’s policy, the “cap” on domiciled Scots has been in place – highly discriminatory it has to be said and affecting the ability of universities to offer places to as many domiciled students as they might like, and now we are seeing massive cut backs in staffing, cutbacks in some courses and on the ability of universities to avoid very challenging deficits. Principals constantly warn of the impending damage to the sector and to the economy at large and they are right to do so.
So maybe, just maybe, Anton Muscatelli’s paper will finally result in some much-needed movement. Scottish Government ministers and MSPs generally cannot continue to have their heads in the sand about higher education funding, just hoping the problem will go away. It won’t because it is now so serious.
University education provides a shared benefit. There is a benefit to the individual undertaking a university course through increased earning opportunities as well as intellectual enhancement, and there is the obvious benefit to the state from an economic perspective, most especially in terms of ensuring we have a highly skilled workforce. As such, it is perfectly reasonable to expect some sharing of the cost.
That is why, for over two decades, I have argued strongly for a modest graduate contribution to help university finances – far different from the English system of high fees which saddles too many students with high debt. The basis for my approach has always been to ensure university education is based on sustainable policies which enshrine academic excellence at their heart rather than the nightmare of ever-growing funding deficits.
I have huge respect for Anton Muscatelli and I hope the Scottish Government will, this time, not only listen but finally act.
Liz Smith CBE is an education consultant specialising in outdoor education and member of the Court of St Andrews University. She is also a former Member of the Scottish Parliament (2007-2026) and former teacher.