Universities fear ‘fatal’ blow as charitable status at risk under SNP funding shake-up plan

universities have warned they could be dealt a “fatal” financial blow under plans for a shake-up of the way higher and further education is funded.

They fear their charitable status could be put at “risk”, potentially leading to institutions beingreclassifiedaspublicbodies, if the Scottish Government becomes more closely involved in overseeing and funding the sector.

A landmark report by James Withers recommended in June last year the Holyrood Government create a “single national funding body to have responsibility for administering and overseeing the delivery of all publicly funded post-school learning and training provision”.

It would take over and potentially replace Skills Development Scotland, which oversees fundingfortrainingandapprenticeships, as well as the Scottish Funding Council, which distributes grants to colleges and universities, and possibly the Students Awards Agency for Scotland as well.

Inits“purposeandprinciples” report, the Government subsequently said it would “investigate the options to deliver a single funding body”.

Now,inevidencetoholyrood’s educationcommittee,universiscottish ties Scotland has raised a series of concerns about the proposal, while also welcoming the “broadaspirations”ofthewithersreviewandseveralelements.

The organisation, which representsthecountry’shighereducation institutions, said it was vital that any new funding body had non-departmental public body (NDPB) status, ensuring it works independently of ministers.

“Any closer relationship with Government would have risks including risks to universities’ charitable status; and risks that universities would be reclassifiedaspublicbodiesbytheoffice for National Statistics, which would be fatal to universities’ financialsustainabilitybecause e.g.borrowingorreservescould not be used to invest in universities’ missions,” it said.

Universities and colleges are already counting the cost of fresh budget cuts, as well as difficulties recruiting fee-paying international students, in part due to tighter UK Government immigration rules.

In its evidence, Universities Scotland said it believed “sustainablefundingisneededmore than a single funding model”.

“We can’t afford reform that leads to a further ‘levellingdown’ of university funding,” the document said.

It continued: “Any ambitious programme of change will have upfront costs, and we are concerned in case the Scottish Government attempts to drive change without the resources necessary to make it a success.

“There are new learner and employer focused skills initiatives that the Scottish Governmentanduniversitiescanacton now to deliver on Withers’ aspirations for learners.”

A Scottish Government spokesperson said: “The 2024/25budgetallocatesnearly £2 billion to further and higher education.maintainingthecurrentclassificationofuniversities will be central to proposals for reform as they are developed.”

We can’t afford reform that leads to a further ‘levelling-down’ Universities Scotland