Vice-chancellor says large-scale savings are needed but union says university should instead use its wealth
The University of Edinburgh is grappling with a £140 million financial deficit, necessitating drastic measures such as job cuts, according to its Vice-Chancellor, Professor Peter Mathieson. This revelation places Edinburgh at the forefront of the financial turmoil currently plaguing the higher education sector in the UK.
In an email to staff, Professor Mathieson outlined the severity of the situation, stating that the financial gap to be closed amounts to 10% of the university’s annual turnover. He emphasised that such substantial savings cannot be achieved through minor measures like recruitment restraint. Instead, more radical actions, including reducing the workforce, are inevitable. Mathieson warned that the rising cost of the workforce is “no longer sustainable” and must be addressed.
Edinburgh’s projected £140 million deficit over the next 18 months significantly surpasses the £30 million deficit recorded by Cardiff University. This makes it the largest deficit faced by a British university amidst the ongoing funding crisis in the sector.
Mathieson attributed the financial predicament to a confluence of factors that have been impacting the higher education sector for years. These include stagnant teaching income, steeply rising utilities prices, inflation, unexpected increases in national insurance contributions, and rising employment costs. Additionally, the UK’s diminishing attractiveness as a destination for international students has further exacerbated the situation.
Jo Grady, General Secretary of the University and College Union (UCU), criticised the proposed cuts as being “off the scale.” She urged the university to utilise its estimated £3 billion worth of assets to mitigate the crisis. Grady highlighted that the University of Edinburgh, being one of the oldest and wealthiest institutions in Scotland, should leverage its substantial endowments to protect jobs and maintain its global reputation. She warned against engaging in what she termed “academic vandalism” and called for responsible management of the university’s wealth.
The announcement from Edinburgh coincided with the Scottish government’s unveiling of a £15 million bailout fund aimed at assisting troubled institutions, including the University of Dundee. Dundee is currently implementing job cuts and course closures to address its £30 million deficit. A spokesperson for Dundee expressed appreciation for the additional funding, noting that the Scottish Funding Council would determine the allocation of the bailout funds. The university is continuing to work closely with the council to develop a sustainable financial recovery plan.The financial woes of the University of Edinburgh and other institutions come amidst a broader trend of budgetary strains in the UK higher education sector. Reports earlier this month indicated that one in four mainstream UK universities are already undergoing job cuts due to budget constraints. Furthermore, several universities in England, including the University of Kent, have failed to file their 2023-24 accounts on time with the Office for Students (OfS), the higher education regulator for England. This highlights the widespread nature of the financial challenges facing universities across the country.
As the University of Edinburgh and other institutions navigate these unprecedented financial challenges, the future of higher education in the UK remains uncertain. The need for sustainable financial management and strategic planning has never been more critical. The coming months will be crucial in determining how these institutions adapt and recover from the current crisis, ensuring the continued excellence and accessibility of higher education in the UK.
