Scottish university funding review ‘kicks issues into long grass’

Politicians must consider the entirety of Scotland’s post-16 education system instead of solely focusing on university funding if they are to solve the problems gripping the sector, experts have warned. 

In a new paper published by Scottish thinktank Enlighten, academics say it is “regrettable” that a recently announced cross-party review of university funding “does not provide a forum for the necessary broader public debate about the future of post-school education”, including looking at the funding of colleges and the role of the tertiary education in national development. 

In December the government announced that a review of the financial sustainability of Scotland’s universities will go ahead, with a steering group set to report in autumn 2026. 

Crucially, the review coincides with parliamentary elections in Scotland, with voters set to head to the polls in May to determine which party will form a government in Holyrood. 

The report’s authors, Huw Morris, professor of tertiary education at University College London, and Des McNulty, former minister for social justice in the Scottish government, argue that the announcement could be perceived as a way to “kick the issue of university funding into the long grass”. 

The review has “the advantage, from the government’s point of view, of taking a sensitive issue off the political agenda for the Scottish Parliamentary election in May 2026 while being seen to be consulting widely,” they write. 

They argue that “radical changes” are needed sooner rather than later, given the immense financial pressures gripping Scottish institutions, with 11 of the nation’s 19 universities expected to be running operational deficits in 2025-26.

“The near collapse at the University of Dundee ought to have been a crystallising event, generating discussion about hard choices on university funding – not just about its scale and who pays but also the objectives of public funding,” said Morris, who was previously director of skills, higher education and lifelong learning at the Welsh government. 

“Instead, the Scottish government battened down the hatches, offering money it previously argued wasn’t there to keep Dundee afloat, while an inquiry focused on internal arrangements, avoiding looking at other actors and wider issues affecting the sector.”

The report notes that “system failure is more acute in the college sector”, with 92 per cent of Scotland’s colleges forecast to be in deficit in 2025-26. 

The authors suggest that a complete review of the tertiary system is needed, including looking at the role of both universities and colleges in Scotland’s national development.

Areas they believe should be discussed include the nation’s system of four-year degrees, given that these cost more than the three-year degrees typically on offer in England. 

They also suggest that politicians should consider adopting the international student levy set to be introduced in England.

Although the Scottish National Party’s commitment to not introducing the levy “confers a competitive advantage on those Scottish institutions able to recruit large numbers of international students”, it does not, they argue, “help those that cannot, nor does it help colleges and other parts of the tertiary education system that could potentially benefit from the proceeds of this levy being redistributed”. 

They recommend looking at how the costs of the student loan book are separately treated in England and Scotland, as well as whether graduates should contribute to the cost of their education.

While the Scottish National Party has been clear that it will not introduce tuition fees for Scottish students, Scotland “can no longer afford to avoid hard questions”, said Morris.

“It is now well established that colleges are on a financial and operational cliff edge, but the reality is that universities’ dependence on overseas markets means that they are also one sudden shock away from an existential problem.”

McNulty, who is now chair of the advisory board at the Local Policy Innovation Partnership Hub at the University of Birmingham, added that “nothing should be off the table” when considering Scotland’s tertiary education system.

“Scotland has a skills crisis. We can resolve it, but only if the tertiary sector collaborates to reduce and focuses on working with regional partners, including employers, to identify areas of economic growth potential and meet current and future skills needs.

“To get there, we need a broad public debate about the future of post-school education, including its funding and what the current system does and does not contribute to national and regional development.”