Created on: 26 Sep 2025
The SFC report on the financial sustainability of the university sector serves as a warning, highlighting that there are significant financial challenges facing HEI’s over the coming years and which requires the Scottish Government to take action to address.
Although the sector is expected to improve its financial position over the next few years as a “whole”, the SFC identifies in the report that this is driven by the wealth of three Scottish universities. Therefore, the situation for most Scottish HEI’s remains challenging for years to come.
The overall projected improvement in HE sector finances is also predicting a continuing reliance on international student recruitment. The Scottish Government must adequately fund higher education to mitigate institutions dependency on potentially volatile international markets as a main source of income. However, caution needs to be taken not to discourage international students from applying to Scottish universities and changes to UK policy relating to visa and immigration regulations need to be reconsidered, especially the stricter Basic Compliance Assessment (BCA) metrics such as visa refusal rate and course completion rate are outlined in the immigration White Paper.
The EIS does not accept that staff restructuring, which has led to redundancies in a number of universities across Scotland, will improve the financial sustainability of institutions in the short or long term. It is a measure which will see many skilled and experienced staff leave higher education and ultimately fails to address the longer-term issue of years of flat cash funding allocations by the SFC. Increasing inflationary staff costs are not the reason for universities reporting operating deficits. Over the past ten years, staff across the HE sector have had sub inflationary pay rises while universities made multi-million pound surpluses, many of which have seen senior management pay rises exceed those of their staff.
The financial sustainability of Scotland’s HE sector requires appropriate funding from the Scottish Government to reduce reliance on other income streams as well as adequate and transparent accountability and scrutiny of those institutions to ensure public money is being spent accordingly.