Additional millions are needed by colleges and universities to make up for deficits

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Scotland’s universities and colleges have called for millions of pounds in new funding to combat yawning deficits and a “existential crisis” for the sector.

Financial strains are so acute that six universities plan to have less than two months’ cash reserves by the end of July next year.

Universities are also facing severe cash flow issues, and a third of institutions north of the border are expected to be running with less than five days cash by the end of 2020-21.

The Scottish Funding Council (SFC) predicts that universities will face an operating deficit of £176.1 million in 2020-21 as public investment on teaching and research fails to keep pace.

Plea for “reliable” funding in budget

Meanwhile, estimates for the colleges show a shortfall of 9.2 million pounds in the 2019-20 academic year.

The operating deficit for 2020-21 is estimated at 15.3 million pounds, which rises to 20.7 million pounds if SFC support for transition costs is not available.

The request for additional funding comes at a time when the Scottish government is finalizing its next budget and organizations are dealing with the combined effects of the coronavirus pandemic and Brexit.

Commenting on the new indicators at yesterday’s Education and Skills Committee meeting at Holyrood, Iain Gray, Scottish Labour’s education spokesperson, said: “This really is an existential crisis for some parts of our tertiary education sector.”

Education Minister John Swinney said the emphasis was on ensuring the viability of Scotland’s secondary and higher education institutions.

Ahead of next month’s budget announcement, Universities Scotland has called for an extra £205.9 million to place the 19 higher education institutions it serves in a sustainable position.

It is also calling for a package worth between £56 million and £64 million to provide new skills and innovation-focused initiatives to help individuals and companies rebound from the economic effects of Covid-19.

And while it welcomes the provision of direct support for students in the form of deprivation grants, help to reduce digital poverty and £75 million in research funding, it said in its submission to the committee that there had been no financial steps to support “the many and intense pressures on the higher education teaching grant, which in normal times is heavily cross-subsidized by international student fees and income from events, conferences and accommodation.”

Alastair Sim, director at Universities Scotland, said, “We are pleased that the cabinet minister shares our aspirations for a sustainable higher education sector and understands that it is critical.

“This requires an investment in teaching and research in next month’s budget to help Scotland recover from the pandemic.”

In the meantime, Colleges Scotland is asking the Scottish government to commit to a rise above the existing baseline in income and capital expenditure.

In the 2021-22 academic year, this will cost an additional £71.2 million in sales and £84.5 million in resources.

Universities ‘may be forced to cut roles of students’

In response to increasing concerns, Mr. Swinney told the Committee on Education and Skills, “We are working with the university sector to ensure that future sustainable funding is available.”

“This is a clear policy priority for the government to ensure that is the case.”

He also said that the government was bringing additional money, including the Youth Guarantee and the Flexible Workforce Development Fund, into the college sector “to make sure the educational opportunities are there for students.”

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