Time to grasp the thistle on finance

Scotland’s colleges and universities face severe financial pressures. Anton Muscatelli calls for urgent government action and an independent review to secure the future of tertiary education.

Scotland has colleges and universities with a global reputation for delivering top tier education, international collaborations, excellence in research, and a skilled workforce.

However, despite this enviable position they are facing unprecedented financial pressures. Now is the time for those who will govern us to grasp the thistle and take bold decisions to tackle this pressing matter.

Recent research from Stirling University’s Professor David Bell, presented at an RSE conference on the sector’s funding earlier this year, lays bare the key issues our universities face.

His study shows the effect rising costs are having with funding for each student place having dropped by an average of a fifth between 2019 and 2024 once inflation is factored in. This means universities are becoming increasingly reliant on overseas students to fill the funding gap. A model which is also under growing threat, due to students’ inability to bring family with them or remain long term in Scotland after graduating. This is making the UK less competitive compared to other destinations.

For our 24 colleges, there is a similar story of reduced funding per student place in the last decade. Flat cash settlements and inflationary pressures mean these institutions, often in the heart of our communities, are struggling just to keep their doors open. They cannot invest in the student experience, their estate, and new technologies. The Scottish Funding Council in its latest financial sustainability report highlights that 22 colleges will be in deficit this year. This is a stark outlook, and the SFC’s report for universities is no less worrying with many needing to cut costs to become financially sustainable.

This should galvanise us all into action. Our tertiary education sector is critical to Scotland’s growth, economic prosperity, societal wellbeing, and place in the world.

For the sake of Scotland’s colleges and universities, whatever party gets the keys to Bute House in May should waste no time in commissioning an independent review. They must commit to a sector that supports Scotland’s domestic and global ambitions and upskills the nation to capitalise on new and emerging technologies.

To achieve this, the review must start with a key fundamental question; what should the shape and size of the sector be?

This review cannot just focus on funding from the Scottish exchequer. It should also recognise crucial UK-wide linkages, especially but not exclusively in research and innovation. Indeed, there needs to be a co-ordinated approach across the UK: although the four UK nations have different funding systems for higher education teaching, financial pressures have impacted on them all. A recent White Paper from the UK Government has highlighted an intention to focus research and innovation funding. UK Research and Innovation has just made important announcements on the structure of its future funding, which will impact the UK’s university sector’s shape and size.

The next Scottish Government must not shirk from the challenge and waste no time in taking some big and bold decisions to produce a route map to not only shore up the sector but to ensure that Scotland remains a world leader in tertiary education.

This article originally appeared in The Times on Tuesday 10 December 2025.