Universities set to deliver in return for significant investment

Universities Scotland warmly welcomed today’s (Wednesday, 21st) indicative grant letter from the Scottish Funding Council (SFC) for teaching and research in Scotland’s 19 universities for academic year 2012/13. The indicative grant letter translates the Scottish Government’s spending plans, as set out in September’s spending review, into academic year (AY) funding allocations for individual universities.

Overall, Scotland’s universities will receive £1.02 billion of funding in AY 2012/13 of which £614 million is for teaching and £258 million is for research and knowledge exchange. The grant letter confirms that cuts to universities’ teaching grant, as seen in last year’s budget, have been restored in full and that significant new investments are planned in research, in science and in opportunities for learners in Scotland’s more remote communities.

The annual grant letter comes with a set of conditions of grant, which universities must accept in return for the funding. New to this year’s conditions of grant is the introduction of outcome agreements between the Funding Council and every institution which will look to record progress across many areas of university activity including articulation from college, widening access, further collaboration with business and industry and institutional efficiency.

Commenting on the indicative grant letter, Universities Scotland’s Convener, Professor Seamus McDaid said:


“Universities fully realise that an investment of this order in the current climate marks a very significant commitment to universities on behalf of the Scottish Government; something that we do not take lightly.

“With five universities in the world’s top 200 and some of the best modern and specialist institutions in the world, our universities really are global asset Scotland can be proud of. This funding will enable us to remain competitive on the world stage, offer a first rate student experience to learners and play a major role as the mainstay of Scotland’s knowledge economy, helping to support Scotland’s recovery from recession by delivering skills and innovation.

“We are in no doubt that the Scottish Government expects universities to deliver on this investment. Though we are proud of what we have achieved as a sector we can always do more and we will work constructively with the Funding Council on the demonstration of outcomes so the Scottish Government can be confident in its investment.”


Direct comparisons between the funding settlement for AY 2012/13 and previous years is more difficult than usual, both at the sector and institution level, because of a number of factors including: substantial changes made to the funding for students from the rest of the UK [1]; a modest level of expansion at undergraduate level and because of changes to the teaching price groups which are due to come into effect in AY 2012/13 [2]. Approximately 1,430 additional funded places are to be created at undergraduate level in AY 2012/13 to be shared by a number of institutions. The University of the Highlands and Islands is to receive 1,000 to allow growth of provision through its network of colleges, 300 are to be shared between seven universities in STEM subjects (science, technology, engineering and maths) in recognition of the priority attached to these disciplines. The remaining places go to support the availability of provision in Dumfries and Galloway.

Funding for research will increase by £10 million in AY 2012/13 but the method of allocation has been adjusted so it is more heavily concentrated on areas of research at the very highest levels of excellence that are rated at 4* and 3* in the Research Assessment Exercise. Funding for research rated as 2* has been discontinued from AY 2012/13 onwards. This has some impact on individual institutions although significantly, all of Scotland’s universities continue to receive an allocation from the Research Excellence Grant as everyone undertakes research judged to be of world-leading quality.



  1. Changes to fee levels for students from the rest-of-the-UK has meant that these students are removed from the system of funded places and that institutions will no longer receive funding for RUK entrants from the SFC, by in large, from 2012/13 onwards. These transitional arrangements have had an impact on student numbers at all institutions making like-for-like comparisons between years difficult. The discontinuation of this Government subsidy has freed-up resource which has helped to restore the cuts to the teaching grant in AY 2011/12.
  2. Previously universities received teaching funding according to a formula which used 11 teaching price groups at undergraduate level. From AY 2012/13 there will only be six price groups.
  3. The total amount of funding allocated to Scotland’s universities in the indicative main grant letter for 2012/13 is to be £1,017 million of which £614 million is for teaching, £258 million for research and knowledge exchange, £123 million for strategic funding and £22 million for capital.
  4. As was the case last year, and as emphasised in the document itself, the SFC letter sets out indicative funding for the main grants that universities receive from the Scottish Government. Further and final details will be made available in the main grant letter expected in March 2012.