We have submitted a brief on the Scottish budget for 2024/25 to the Scottish Parliament’s Education, Children and Young People’s Committee ahead of Cabinet Secretary for Education and Skills, Jenny Gilruth’s appearance this week on the Scottish budget and post school reform.

In our brief, we have highlighted the budgetary pressures the higher education sector faces, leading to a sector-wide response which described the settlement as “tough” and requiring “inescapably hard choices for universities”.

The brief also draws attention to a January report on the Financial Sustainability of universities from the Scottish Funding Council, which includes some financial forecasting based on data from mid-2023. It shows the volatility facing universities and forecasts the number of universities with deficits to increase from 5 institutions in 2021/22, to 10 in 2023/24.

Our key considerations on the budget, outlined in the brief include:

• The financial year to academic year conversion may compound the pressure of cuts.
• It is significant that the HE resource budget for 24/25 is lower than flat cash (-3.6%) as this could have further negative funding implications for universities in the current academic year (23/24).
• The academic year runs four months beyond every financial year. When converting the financial year (FY) budget to an academic year (AY) allocation for universities, the Funding Council manages this uncertainty by making a cautious assumption that the next FY settlement will be flat cash for HE. If/when the next FY is lower than flat cash, it has to be managed, in part, within the existing academic year.
• The 24/25 FY resource budget line raises the risk that universities will see cuts intensified in AY 2023/24 (on top of the £20 million already withdrawn in-year) as well as planned cuts in AY 2024/25.