Responding to Mr Russell’s statement on the Green Paper, delivered to Parliament today, Alastair Sim, Director of Universities Scotland, said:
“We welcome Mr Russell’s firm commitment to fill any funding gap to ensure that Scotland’s universities maintain their competitiveness. We also welcome the urgency given to this issue; this will need to be a priority immediately after the election. However, university Principals are concerned about the optimistic assumptions that continue to be made on various ways to fill the gap. Parties’ commitments to address the funding challenge facing Scottish universities need to be based on realism about the scale of the challenge.”
Mr Russell’s statement to Parliament suggests that a funding gap of £93 million exists. This is based on the following assumptions:
- The starting point for this is that the gap will be £155 million annually. This depends on English universities charging an average fee of £7,500 and is further dependent that this fee level will not rise with inflation. However, both BIS and OFFA have now advised English fees will be permitted to rise with inflation. This pushes the starting point for the gap up to £202 million as cited by Universities Scotland.
- £63 million is then deducted from the gap by the Scottish Government’s proposal to charge students from the rest of the UK an annual fee of £6,300. This gives the Scottish Government gap figure of £93 million. The £63 million figure assumes no drop in demand from rest-of-UK students. If fees are set at that level for students from England, Wales and Northern Ireland it is likely this will affect behaviour and the numbers coming to Scotland will be likely to decline.
- £22 million is then deducted from the gap by charging EU students a ‘service charge’ as suggested in today’s announcement. The legality of this option is not yet clear and this also assumes there will be no drop in demand as a result.
- The technical group report is very clear that efficiencies, philanthropy and business contributions will not close the gap between Scottish and English universities as English universities will also be vigorously pursuing these options. Scotland’s universities will work towards achieving the £26 million of efficiency savings as identified in the report but the report is very clear this does not address the comparative gap figure to England.
Since the publication of the joint Scottish Government/Universities Scotland technical report, Universities Scotland has consistently cited that the annual teaching funding gap is likely to be at least £202 million. Alastair Sim:
“The exact size of the funding gap will not be known until 12 July when English fees are confirmed. However all parties will need to be aware that it could easily be £202 million per year, or higher, and plan accordingly. A gap of £202 million does not represent the worst-case scenario.”
Responding to Scottish Government proposals, announced today, on the prospect of introducing a ‘service charge’ or similar to students coming to study in Scotland from the EU, Alastair Sim said:
“It’s important that Government looks seriously at whether it may be able to change its policy in this area but it’s not yet clear whether this would be achievable under EU law. Until these legal uncertainties are resolved we cannot rely on projected income from EU students as a means of addressing the funding gap. We also have to realise that if fees are introduced, this would impact on student behaviour. There is no guarantee this would generate a reliable stream of £22 million.”
The urgent need for a funding solution to be put in place is driven by the fact that the new fee regime in England will come into place in 2012-13. Urgent decisions are also needed on aspects such as fee-levels charged to students from the rest of the UK as those students will be making their applications to universities in Scotland this September and need to know if new fee-levels apply before doing so.
- On Philanthropic giving the technical group’s report states “the Group concluded that this source would not make a material contribution to closing a funding difference.”
- On a business contribution the technical group’s report states “the Group concluded that this source would not make a material contribution to reducing the funding gap”.
- On efficiency the technical group’s report states “It should be noted that English universities will also be required to pursue efficiencies and therefore efficiency gains will have little or no effect on the relative difference in teaching funding.”