We need a serious conversation on HE funding

Departing Universities Scotland after 15 years, Director Alastair Sim suggests there should be a serious conversation on funding that shares our national values, focusing on socially just solutions and holds common ground between the sector and government.

As I leave Universities Scotland after 15 years as Director, I don’t want to focus on the past.

I want to hope the future of Scotland’s higher education will offer more promise. However, we’ve reached a stage, in my view, where Scotland needs to have a serious conversation about how best to support universities’ contribution.

Otherwise, we are at risk of severe degradation of a national asset.

The question of how universities are funded is highly emotive. It connects to people’s values and the opportunities we want to be able to offer to learners. Those values unite the public, university leaders and our politicians.

However we have now reached a point where it is widely recognised that successive real-terms cuts to university funding are stacking up real problems. There’s increasing recognition of a need for mature consideration of how to address this, moving beyond the polarising “Fees vs No Fees” discussion.

I believe politicians recognise and support a space for respectful debate.

Let’s start off by identifying some common ground.

First of all, I believe there is a genuine shared recognition, across politics and society, of the importance of Scotland’s universities. Scottish and UK government strategies reaffirm higher education’s contribution. They celebrate what we do to help learners realise their full potential, and the increasing contribution we’re making to social mobility. Universities are praised for our world-changing research, the brilliance of our small specialist institutions for the creative disciplines, our engagement with business, and our role in our communities. Universities are repeatedly cited as brand leaders for Scotland’s international competitiveness, and magnets for international talent.

I believe we start from a basis of values that are shared across politics and society: a commitment to higher education based on ‘the ability to learn, not the ability to pay’, a commitment to social fairness and the common good, and a dedication to excellence.

We enjoy a rich dialogue with government and with politicians across the spectrum. We have united together through crises and challenges, as with Covid.

However, without an obvious single crisis, and when there are multiple pressures converging on the sector, there is not a clear understanding of the path we can walk together.  We need to give universities a firm platform for their future contribution. As it stands, the foundations beneath them are being eroded.

So, what are the challenges that universities are facing? And how can we address them?

Scottish Government used to have a clear policy of substantially funding the costs of undergraduate education. In 2015 however, there was an unspoken change of policy in which a series of annual real-terms cuts to funding began, on the assumption that growth in international student numbers would cross-subsidise increasing government underfunding of teaching and research. The consequences of that have now become acute.

The figures speak for themselves. On a very conservative estimate, the Institute for Fiscal Studies says that real-terms resources to teach each Scottish student have been cut by 19% since 2014/15. Joint work by London Economics and the Higher Education Policy Institute shows that Scotland makes the lowest investment in Britain in teaching, at £7,870 per student compared to £10,220 in England (the latter combining graduate fees and state contributions). The Scottish Funding Council’s 2021 review of the sector’s financial sustainability estimated that Scottish universities research activity was underfunded by c£328m per year. In many institutions, this deficit was underpinned by international student income.

University leaders have repeatedly warned this funding situation was forcing universities into a massive geopolitical risk by expecting them to rely on continual expansion of international student numbers.

Those risks have now crystallised. Scotland, and the UK, are seeing significant drops in international student enrolment due to an untimely combination of factors.

So, what happens next?

Without sustainable funding, universities will have to make increasingly difficult decisions about course closures, job losses, and erosion of the student experience. Institutions will do everything possible to mitigate the effects on students, but we’re facing a fundamental contradiction between students bringing increased needs to university, especially post-pandemic, and universities having less resource to meet those needs. Every job lost at a university has a personal story behind it, and is a blow to the local economy.

Universities are prepared to take positive action and do things differently. We are leaders in shared procurement.  We’re developing ever-deeper relationships with partners including Scotland’s colleges.  Blending in-person and digital provision has personalised the learning experience for students – with the firm aim of making this more inclusive, not cheaper. We’re reconfiguring our estates to meet patterns of usage.

However, the gap is too big to fill through these measures alone.

Scotland needs to embark upon a mature political debate about how best to support our universities.

In many ways, the best outcome would be a cross-party consensus that universities need to be a top priority for sustainable public investment at internationally comparative levels. We believe this is a true investment in prosperity and inclusion – creating opportunity for individuals, developing people with the skills and aptitudes for the green economy, drawing inward investment and talent to Scotland, and improving social mobility.

We know that public finances will be strained for years to come. Let’s have an openness to socially-fair alternatives based on ‘the ability to learn, not the ability to pay’. We know there are no easy answers, but it must be worth looking at global examples to build socially-equitable ways of sharing the costs of higher education between the state and other beneficiaries.

Even as I move on, I want to have faith that the future of Scotland’s universities is assured. I will care just as passionately about that as a member of the public, and as a parent, as I have done so as Universities Scotland’s Director for the last 15 years.