Bail us out now or we’ll go bust, say universities

A THIRD of Scotland’s universities and colleges could run out of cash by Christmas without a government bailout, ministers have been warned.

Six of its 19 higher education institutions could face financial ruin as a result of lost income from international student fees during the Covid-19 crisis, analysis shows.

The University and College Union has predicted institutions north of the Border could lose 25,000 students due to travel restrictions.

Their absence would result in a £500million gap in funding, according to umbrella body Universities Scotland.

But leading academics fear the figures, published by think-tank Reform Scotland, are a conservative estimate and could in reality be much higher.

In the wake of funding cuts Scottish universities have become increasingly reliant on cash from non-EU students, who pay up to £30,000-a-year to attend.

The figures have been highlighted by Labour MSP Daniel Johnson, vice convener of the Scottish parliament’s education committee, who warned the sector faces problems if the Scottish Government does not step in.

Government funding only covers about 90 per cent of the cost of teaching students and 80 per cent of the research costs. Mr Johnson said: ‘This reliance on overseas income has been created as a matter of policy by the Scottish Government. It has an obligation to ensure institutions can survive where students are prevented from travelling to Scotland.

‘The Scottish Government must create a fund to bridge this immediate cashflow issue that will be felt in the coming months.

‘The longer-term issue may well require UK Government support, but failing to put these short-term measures in place could result in the loss of universities.’

It comes only months after the Scottish Daily Mail reported that cash for the sector suffered a real terms cut of more than 7 per cent – £91million – from £1.2billion to £1.1billion between 2014 and 2018, of reserves funds and revenue.

One of those suffering financial problems is the University of Edinburgh. Its principal Peter Mathieson, who has taken a 20 per cent pay cut for six months, said staff and students face a ‘major challenge’.

In a statement on the university’s website he said: ‘Like other research-intensive international universities, we are not shying away from the magnitude of the challenge this brings.

‘As the hits on our income in the next few years hit home, we will have to think the unthinkable.

‘The threats to the university are extremely serious. This is going to have implications for our building programme and our staffing.’

A Universities Scotland spokesman said: ‘We have been clear that it will take a response from both the Scottish and UK governments to get universities through this crisis successfully.’

Secretary of State for Scotland Alister Jack said: ‘We’re working closely with the Scottish Government to provide as much stability as possible.’

Meanwhile, the UK Government will today announce a £100million movement of funds to help protect vital university research activities south of the Border.

On top of that, an estimated £2.6billion of tuition fee payments will be brought forward to help universities better manage financial risks over the autumn.

‘Reliance on overseas income’