Sector Sustainability for Scotland’s Growth

Update November 2024: We have taken the unprecedented step of increasing our 2025/26 budget ask of the Scottish Government. This is due to the increased costs the sector is facing due to employers’ national insurance contributions, estimated to cost the sector £47m in 2025/26. The original bid was pitched as low as possible in recognition of the fiscal reality facing the Scottish Government. However, institutions have no capacity to absorb the increased cost after a decade of declining public investment.

Read the revised budget bid to Scottish Government here. The evidence base and rationale for our original ask can still be found in the original document: Sector Sustainability for Scotland’s Growth.

Scotland’s universities make a significant contribution to Scotland’s economic, cultural and civic life. It is a contribution that is crucial to delivering the Scottish Government’s priorities – never more so than now, in a year of unprecedented budgetary constraint.

We have calibrated our budget submission to the Scottish Government this year to the fiscal reality the Government faces. We have asked for modest but crucial budget decisions that can offer greater stability for the sector in response to funding pressures and, most recently, the fall in international student numbers as a result of geopolitical circumstances beyond the control of universities. We ask for spending decisions that protect the research strengths of our universities, enable us to respond to the ambition of our Scottish domiciled students and the significant learning and wider challenges that they face. Crucially for this year’s budget, we have sought to be as creative as possible with the finite resources available, by offering the Scottish Government ways to redirect pockets of existing HE resource to the frontline of Scottish-domiciled students’ higher education.

We are asking for:

• an increase of 1% in real terms to the Scottish Funding Council (SFC) education resource budget on the 2024/25 baseline, equalling to 2.35% in cash terms.
• We ask the Scottish Government to allow the “SQA places” as introduced in 2021/22 to exit the system as planned but to retain the resource in the SFC budget as connected to those places into the price per place for each Scottish student in order to stabilise the breadth and quality of current tuition and the return to £16 million for discretionary and childcare funding, reversing a cut to £12 million last year.
• SFC Higher Education Capital budget to be at the level set out in the Scottish Government’s Targeted Capital Spending Review (3% cash terms increase) to support research and innovation.

Whilst the sector’s needs relate to stability, we are committed to supporting growth for Scotland through our skills, research and innovation. We believe targeted investment in HE can help to catalyse that wider economic growth. Figures from London Economics showcase that universities return £11 of economic impact for every £1 of Government investment, totalling a combined economic impact of Scotland’s universities at £28 billion.