Sir Ian Wood: Major risk to the Scottish economy if funding for our university students continues to be reduced

We are delighted to have Sir Ian Wood, businessman, philanthropist and Chairman of JW Holdings Limited write for Universities Scotland about the importance of universities to the Scottish economy. This is a longer-version of a column Sir Ian wrote for The Times.

As it is, our universities funding has followed real term decline since 2014/25 leaving our universities poorly equipped to weather the inflationary increases affecting all sectors, and the real prospect of further deeper cuts still to come for 2023/24 onwards.  The cuts have been in the range of 27%-31% to core budgets in real terms up to 2022/23.

For industry, universities play a very important enabler role as they deliver higher skilled graduates into the workforce and develop genuinely world leading research and development supporting new technologies for the growth of industry sectors.

Scotland’s economic growth in the next two to three years will be very dependent on the success of the National Strategy for Economic Transformation, and universities are key agents of the high level skills and R&D essential to achieve this.  Certainly in the North East of Scotland, the university partnerships in place will be key in achieving a just transition from an over reliance on oil and gas to renewables, to the benefit of the region, jobs and growth.  We should be focused on the good return on our investment in higher education and the need to get full value from public funding.  In fact, it’s not really clear how resource in the spending review has been determined.

What’s at risk from lower university funding?

Firstly, the quality of education – doctors, health professionals, lawyers, teachers, engineers, software developers, creative thinkers, and all professions – essential to improve our education and training and focus on innovation and collaboration.

Secondly, Scottish universities bring significant UK funds into Scotland and we need to grow and enhance this.

Thirdly, Scottish universities collaborate with 20,000 small businesses, working with them to improve their quality and prospects, providing consulting and enhanced management and skills. Across the UK universities generate 19% of the start-ups and spin-outs and can significantly improve on this.

Fourthly, Scotland’s engagement with overseas students provides the equivalent of approximately £2 billion pa value of exports. This also encourages the students to either stay in Scotland or stay connected to Scotland as their careers develop.

Fifthly, Scotland’s universities can only look on with envy at the planned 35% increase to research funding in England over the next three years. When it comes to our human capital, universities now have £2,325 less to spend per student in real terms than they did in 2014.  Universities in England are crying out for more resource but the £9,250 average funding level for every student in England looks positively generous compared to Scotland’s £7,700.

Sixthly, Scotland’s universities are the only part of our education in the past ten years where funding support has not been enhanced in real terms.

Essential is the need for top quality university support to maximise the potential of the Just Transition to new energies. That’s equally true of universities’ contribution to high-value manufacturing, biotechnology and quantum. We need to ensure investor confidence in our education and research and innovation infrastructure and cannot let this be whittled away to the detriment of our economic growth and success.

I understand that public spending is currently under pressure but reducing our investment in higher education will simply damage our economy to the detriment of our economic growth.