What are the real funding challenges in Scotland?
Dr Colin Campbell, Head of Policy and Planning at the University of Stirling discusses the implications and potential consequences of the latest funding announcements for HE in Scotland.
When interviewing candidates across professional service departments, we often ask about challenges being faced by the higher education sector in Scotland. Unsurprisingly, the most common responses relate to ‘funding’, with many candidates reflecting on tuition fee policies, the ability to recruit non-regulated students, and wider issues of institutional autonomy.
Yet those looking on from outside would be forgiven for thinking that higher education in Scotland is comparatively well-funded. After all, continued investment has been made to ensure that fees and student funding are fully covered for the majority of Scottish undergraduates. It’s also true that recent funding settlements have been relatively benign compared to some sectors – the budget announcement in December 2015 will result in a c.3% cut for HE in 2016/17.
Higher education remains one of the key sectors in the Scottish Government’s Economic Strategy. The strategy notes that “investing in Scotland’s universities, supporting their world-class and high-impact research and helping them build links across the globe is at the heart of the Scottish Government’s ambitions for Scotland”. This reflects a common ambition – across the political spectrum – for a university sector that delivers world-class research, excellent and widely accessible learning for all, and innovation that drives business growth.
As institutions plan ahead, however, the funding challenge is perhaps more acute than it might first appear. The cut in core funding in 2016/17 comes at a time of rising costs, including increases to national insurance and employer pension contributions. The sector has already delivered over £200m of efficiencies in the three years to 2015, and most institutions have sought to trim costs and improve effectiveness through large-scale change and transformation programmes. The low-hanging fruit has been picked, and for most, the outlook is gloomy – a one-year funding settlement is unlikely to be followed by an immediate return to the 2015/16 position.
What is emerging, therefore, is a growing gap between policy ambitions for the sector, and the development of a sustainable funding model. In the longer-term, this will impact on the delivery of key policy aims to widen access and support world-class institutions.
A Commission on Widening Access published its interim findings in November 2015, and will finalise its recommendations during 2016. The Commission started from a position that all people, but particularly the young “should have the opportunity to pursue an academic or vocational route that best matches their interests, abilities and aptitudes, irrespective of background”. This reiterates the 53 year-old Robbins principle that university places “should be available to all who are qualified by ability and attainment to pursue them and who wish to do so”.
But in a system of finite places (for Scottish students), growth in one demographic will inevitably lead to the displacement of places from another demographic. Or in other words, universities and their partners can do more to raise aspirations and attract more applications from groups that are currently underrepresented – however there can be no net increase in the total number of offers made. Figures released by UCAS show that domestic offer rates from English providers increased in 2015 to 78%, while in Scotland, the offer rate from Scottish providers to Scottish domiciled applicants fell by 3% to just 61%. This means that Scottish applicants are less likely to receive an offer from their (Scottish) university of choice.
Furthermore, the Scottish unit of teaching resource for a priority subject such as Computer Science was frozen at £7,418 in 2015/16, while the majority of providers in England received teaching income that exceeded £9k per student (mostly from Student Finance England). A differential of over £1.5k per student per year is leading to a gap in the level of investment that can be made in academic staff, world-leading facilities and other institutional priorities – including bursaries and outreach programmes. A recent study by the University of Edinburgh found that English institutions spent over three times as much on financial help for disadvantaged students compared to universities in Scotland.
Evidence compiled by Universities Scotland for the Education and Culture Committee in 2015 to showed that publically funded tuition met only 95% of the real costs of teaching in Scottish HEIs in 2013/14. This represented a real-terms reduction of almost 10% of funding per student in Scotland since 2009/10 – at a time of rising application numbers. Due to the level of demand, most institutions recruit over-and-above their funded populations and receive funding of just £1,820 (the tuition fee component) for a significant proportion of Scottish students.
Looking ahead, the funding gap across the UK will continue to grow if English providers are able to charge variable fees in future years, and will inevitably raise questions about different levels student experience across the devolved administrations.
The funding squeeze in Scotland may lead to further unintended consequences as secondary schools, colleges and universities work together for a more cohesive learner journey. Our interview candidates may have diagnosed the problem, but urgent thinking is needed to establish a sustainable trajectory of funding necessary to support a world-leading and widely accessible higher education sector.
