Troubling times ahead if squeeze on university funding continues

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THOSE looking on from outside would be forgiven for thinking higher education in Scotland is comparatively well-funded. Continued investment has been made to ensure that fees and student funding are fully covered for the majority of Scottish undergraduates and recent funding settlements have been relatively benign compared to some sectors.

Higher education remains one of the key sectors in the Scottish Government’s Economic Strategy that notes that investing in Scotland’s universities, supporting world-class research and building links across the globe are “at the heart” of ambitions for Scotland.

This reflects a common ambition across the political spectrum for a university sector that delivers worldclass research, excellent and widely accessible learning for all and innovation that drives business growth. As institutions plan ahead, however, the funding challenge is perhaps more acute than it might first appear. The Budget announcement in December will result in cuts of a little over three per cent in 2016/17 and this comes at a time of rising costs, including increases to national insurance and employer pension contributions.

The sector has already delivered more than £200 million of efficiencies in the three years to 2015 and most institutions have sought to trim costs and improve effectiveness through large-scale change and transformation programmes. The low-hanging fruit has been picked and, for most, the outlook is gloomy; a one-year funding settlement is unlikely to be followed by an immediate return to the 2015/16 position.

What is emerging, therefore, is a growing gap between policy ambitions for the sector, and the development of a sustainable funding model. In the longer-term, this will impact on the delivery of key policy aims to widen access and support world-class institutions.

The Commission on Widening Access published its interim findings in November and will finalise its recommendations this year. The commission started from a position that all people, but particularly the young, should have the opportunity to “pursue an academic or vocational route that best matches their interests, abilities and aptitudes, irrespective of background”.

But in a system of finite places for Scottish students, growth in one demographic will inevitably lead to the displacement of places from another; in other words, universities can do more to raise aspirations and attract more applications from underrepresented groups but there can be no net increase in the total number of offers made.

Figures released by Ucas show domestic offer rates from English providers increased in 2015 to 78 per cent while, in Scotland, the offer rate from Scottish providers to Scottish domiciled applicants fell by three per cent to just 61 per cent. This means that Scottish applicants are less likely to receive an offer from their Scottish university of choice.

Furthermore, the Scottish unit of teaching resource for a priority subject such as computer science was frozen at £7,418 in 2015/16 while the majority of providers in England received teaching income that exceeded £9,000 per student. A differential of more than £1,500 per student per year is leading to a gap in the level of investment that can be made in academic staff, world-leading facilities and other institutional priorities including bursaries and outreach programmes. A recent study by Edinburgh University found English institutions spent more than three times as much on financial help for disadvantaged students compared to universities in Scotland.

Evidence from Universities Scotland for the Education and Culture Committee showed that publicly funded tuition met only 95 per cent of the real costs of teaching in Scottish universities in 2013/14. This represented a realterms reduction of almost 10 per cent of funding per student since 2009/10 at a time of rising application numbers. Due to the level of demand, most institutions recruit over-andabove their funded populations and receive funding of just £1,820 – the tuition fee component – for a significant proportion of Scottish students.

The funding gap across the UK will continue to grow if English providers are able to charge variable fees in future years. This will inevitably raise questions about different levels of student experience across the devolved administrations.

The funding squeeze in Scotland may lead to further unintended consequences as secondary schools, colleges and universities work together for a more cohesive learner journey. Urgent thinking is needed to establish a sustainable trajectory of funding necessary to support a worldleading and widely accessible higher education sector. Colin Campbell is head of policy and planning at the University of Stirling. A longer version of this article is available at research website Wonkhe.