Stark Financial Picture and High-Risk Financial Context for Universities Evident in Financial Sustainability Report
The Scottish Funding Council (SFC) has today (Friday, 26 September at 10.00) published its annual Financial Sustainability report for Scotland’s universities. Amongst the financial metrics, which cover the period 2022/23 to 2026/27 which includes some financial projections, key figures include:
- HEIs in deficit. Nine universities are in deficit in 2023-24, increasing to 10 in 2024-25 and projected to be 11 in 2025-26 before being projected to reduce to 7 in 2026-27.
- Net liquidity days. Has fallen from 183 days of net liquidity in 2022-23 to a projected 115 in 2026-27.
- Cash inflow. The sector reported a net cash inflow of £14m in 2023-24 which represented a 93% decrease on the previous year
- Liquidity/cash. Cash balances are skewed by the results of the two largest universities which account for well over 50% of the overall cash reserves at the end of July 2024.
Responding to the report, Claire McPherson, Director of Universities Scotland, said:
“This report demands attention from across the Scottish Parliament. Despite excluding the University of Dundee – which as we know is facing a particularly acute crisis – it sets out the starkest set of financial figures we have ever seen for Scotland’s universities. The report demonstrates our institutions are operating in a high-risk financial context.
“The Funding Council’s report sounds loud and clear the financial warnings about a sector at risk and there are some important things that it does not say. It doesn’t mention job losses, which is the painful reality in many institutions. It also doesn’t reference a decade-long decline in public funding as the major contributing factor to the level of financial exposure institutions face and the hard choices they are forced to take. Noone should take comfort from the projection of a slight recovery towards 2026/27 as that is largely achieved as a consequence of more hard choices. If the sector shrinks so too does the contribution it makes to Scotland’s society and economy.
“It is absolutely vital that Scotland makes a move to put its universities on a sustainable financial footing for the long-term. We have been in constructive discussions with the Scottish Government, and all parliamentary parties, about a way forward and whilst there are no quick fixes we hope to be able to take a meaningful step forward in the next month.”
Notes:
- The University of Dundee has not been included in the data from 2023/24 because the University has not signed-off accounts.
- The report makes clear that some of the financial metrics, which are presented at aggregate sector level in all cases, are positively skewed by the financial results of the two largest universities.