Looking to the future: a stable, effective, and competitive university sector: Universities Scotland’s budget case 2026/27

The last 12 months have been seismic for Scotland’s universities. Geopolitical instability, further changes to the UK’s immigration regime, tax increases, and persistently high inflation have relentlessly increased the pressure on a diverse sector that was already grappling with the consequences of long-term structural underfunding. The crisis at the University of Dundee has laid bare the precarious nature of Scotland’s current HE funding model, and the associated implications for the nation’s social and economic wellbeing.

The challenges we face in enabling and sustaining a flourishing HE sector are complex and difficult, but we approach the final year of this parliamentary term with renewed determination and hope for the future.

Partnership working is an embedded feature of Scottish public life. It is our default approach to engaging our many and varied stakeholders – from the Scottish Government and Scottish Funding Council (SFC), to adjacent sectors, local and international businesses, and our staff and student communities. It is also the only viable approach to tackling the structural problems that risk undermining our future contribution to Scotland’s growth and prosperity.

Scotland’s universities stand ready and willing to work with any and all partners interested in the long-term vitality and competitiveness of our sector. We are encouraged by recent discussions with the Scottish Government, opposition parties,and other stakeholders regarding the funding model needed to underpin a thriving and sustainable university sector, and look forward to working in partnership to progress associated actions over the coming months.

However, we must also address our immediate financial reality. We cannot sustain another year of real terms funding cuts without serious implications for the stability of our sector and hence our core teaching and research activities, as well as the social and economic contribution we make to Scotland, and our global reputation and competitiveness. We therefore look to the Scottish Government for a 2026/27 budget settlement that:

• stabilises the sector, stemming the decline in HE investment, particularly for teaching, and mitigating the impact of intense geopolitical instability;
• creates space to test new ways of working that drive innovative approaches to transformation and effectiveness;
• helps relieve acute and immediate funding pressures, thereby ensuring the sector can play a full role in progressing the development of a sustainable and competitive university funding model for the future; and
• enables the sector to build back its reputation and competitiveness, via a credible funding package for both students and our research base.