‘Ancient’ unis do better as sector income hits £3.8bn

University of Glasgow

Scotland’s 19 universities face rising costs and funding cuts, and three of the country’s four “ancient” universities — Glasgow, Edinburgh and St Andrews — are generally better placed to respond to these pressures.

That’s according to a report by the Auditor General for Scotland.

The report said Scotland’s universities operate in a competitive international market and are all facing financial challenges and uncertainties.

The challenges include a 7% or £91 million real terms cut in government funding between 2014-15 and 2017-18, estates costs and rising pension costs, and the significant implications of EU withdrawal for teaching and research.

However, the universities of Glasgow, Edinburgh and St Andrews have large reserves and have grown their income from other sources, particularly from non-EU student tuition fees.

Tuition fees replaced Scottish Funding Council (SFC) grants as the single largest source of income for the sector in 2017-18.

Modern universities, including Robert Gordon and Glasgow Caledonian, rely on government funding for more than half of their income and have had smaller increases in revenue from other sources.

SFC funding to the sector reduced in real terms from £1.2 billion in 2014-15 to £1.1 billion in 2017-18.

Despite this, total income for the sector increased by 3% from £3.7 billion in 2014-15 to £3.8 billion in 2017-18.

Income fell at nine universities, including five modern universities.

Caroline Gardner, Auditor General for Scotland, said: “There’s significant variation in the financial strength of Scotland’s university sector.

“A small number of universities are stretching ahead of the rest and are in a better position to deal with the financial pressures facing the whole sector.

“But they still face strong global competition.

“More work needs to be done to make sure that universities’ outcome agreements provide a clearer picture of what each institution is contributing to the government’s national priorities.”