The Scottish Parliament and Scottish Parliament Infor mation C entre l ogos .

SPICe Briefing

Higher Education Institutions: Subject Profile

5 September 2016

16/71

Suzi Macpherson

This briefing provides an overview of Higher Education Institutions (HEIs) in Scotland. It includes discussion of student numbers, funding of HEIs and recent policy priorities.

Source: Glasgow Caledonian University, 2016

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CONTENTS

EXECUTIVE SUMMARY .......................................................................................................................................... 1

BACKGROUND ........................................................................................................................................................ 2

GOVERNANCE OF HIGHER EDUCATION INSTITUTIONS .................................................................................. 3

HIGHER EDUCATION ............................................................................................................................................. 4

The Four Year Degree ......................................................................................................................................... 4

STUDENT NUMBERS.............................................................................................................................................. 5

Trends in Student Numbers ................................................................................................................................. 6

TUITION FEES ......................................................................................................................................................... 8

Scottish domiciled and EU students .................................................................................................................... 8

Rest of UK students ........................................................................................................................................... 10

International Students ........................................................................................................................................ 10

POLICY CONTEXT ................................................................................................................................................ 10

Scottish and EU students funded places ........................................................................................................ 10

Rest of UK students deregulated fees ............................................................................................................ 10

EU nationals Treaty agreements .................................................................................................................... 11

International students - recruitment ................................................................................................................... 12

FUNDING OF HIGHER EDUCATION INSTITUTIONS .......................................................................................... 12

SCOTTISH FUNDING COUNCIL GRANT ......................................................................................................... 13

TUITION FEE INCOME ..................................................................................................................................... 15

RESEARCH INCOME ........................................................................................................................................ 16

QUALITY ASSURANCE MEASURES ................................................................................................................... 17

Teaching Quality ................................................................................................................................................ 17

Research Quality ................................................................................................................................................ 17

Outcome Agreements ........................................................................................................................................ 19

ANNEXE A: THE SCOTTISH CREDIT AND QUALIFICATIONS FRAMEWORK.................................................. 20

ANNEXE B: STUDENT NUMBERS ....................................................................................................................... 21

ANNEXE C: MAIN INCOME STREAMS AT SCOTTISH HEIS, 2014/15 (000 / %) ............................................. 22

ANNEXE D: REVENUE FUNDING TO HEIS ........................................................................................................ 23

ANNEXE E: TUITION FEE INCOME BY STUDENT CATEGORY, 2012-13 TO 2014-15 .................................... 24

ANNEXE F: VON PRONDZYNSKI REVIEW RECOMMENDATION ..................................................................... 25

SOURCES .............................................................................................................................................................. 29

RELATED BRIEFINGS ............................................................................................................................................... 32

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EXECUTIVE SUMMARY

There are 19 higher education institutions (HEIs) in Scotland. In academic year 2014/15 there were more than 230 thousand students at Scottish HEIs. Scottish domiciled students represent the largest population (66%). About two thirds of the student population at Scottish HEIs in 2014/15 were pursuing an undergraduate degree (64%).

In recent years there has been significant policy attention to improving the consistency of governance arrangements within HEIs. The Von Prondzynski review (2012) made a number of recommendations for improving governance in HEIs. The measures taken to implement these recommendations include publication of a Code of Good Governance for Higher Education in Scotland (Committee of Scottish Chairs, 2013) and the recent passing of the Higher Education Governance (Scotland) Act 2016.

Different fee arrangements apply to full time undergraduate degree students at Scottish HEIs, depending on the students home domicile. Scottish domiciled and EU students are not required to make a contribution to the cost of their tuition. Students from other parts of the UK can be charged up to 9,000 per annum for tuition. International students (not EU nationals) can be charged fees at rates above the 9,000 maximum. The fee levels charged to international students vary from 8,800 to 45,000 per annum (Audit Scotland, 2016).

Scottish HEIs received almost 3.5 billion in income in academic year 2014-15. The largest income source is the Scottish Funding Council (SFC) grant (1.1 billion) followed by tuition fees (941 million) and research (769.2 million). HEIs also generate smaller amounts of income from other sources, e.g. commercial activity and endowments. The SFC revenue grant to HEIs has fluctuated over the years, rising each year in the period 2003-04 to 2009-10, declining in 2010-11 and 2011-12 and then rising again.

Both teaching and research quality are monitored through external assessment processes. For teaching it is the Quality Assurance Agency (QAA) that is responsible for assessment. For research it is currently the Research Excellence Framework (REF) that monitors and reports on research quality.

While HEIs are autonomous bodies, the significant investment of funding by the Scottish Government (largely through the SFC grant) provides Scottish Ministers with a mechanism for influence over the activities of HEIs. The current policy priorities of the Scottish Government include concern with widening access to HEIs by those from traditionally under-represented socio-economic groups; promoting digital skills; and continued activity to prioritise high quality research and innovation. Outcome agreements are negotiated between the SFC and individual HEIs. These offer the main mechanism through which HEIs are accountable for achieving the policy objectives set by the Scottish Government.

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BACKGROUND

There are 19 higher education institutions in Scotland (HEIs) of various types and historical origins, as shown in Figure 1.

In Scotland, a higher education provider wishing to use the title university has to be an approved provider of both taught and research degree programmes. The power to grant consent for an educational institution to become a university is set out at section 49 of the Further and Higher Education (Scotland) Act 1992 as lying with the Privy Council. In practice, the Privy Council consults the Scottish Government; with opinion from the Scottish Government then informing the decision made by the Privy Council.

Three HEIs in Scotland are not universities: Glasgow School of Art; The Royal Conservatoire; and SRUC. Two of these HEIs do not hold the power to award degrees for either taught or research programmes: Glasgow School of Art, which has its degrees validated and awarded by the University of Glasgow; and Scotlands Rural College (SRUC), which has its degrees validated and awarded by the University of Edinburgh. The Royal Conservatoire of Scotland holds the power to award degrees for taught programmes, but its research degrees require validation and are awarded by the University of St Andrews.

Figure 1: Types of Scottish HEI

Source: SPICe

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Regardless of the type of institution and its historic origin, all Scottish HEIs are independent self-governing bodies with charitable status.

GOVERNANCE OF HIGHER EDUCATION INSTITUTIONS

Each HEI in Scotland has a governing body that is responsible for the finances, governance and strategic management of the HEI (Universities Scotland 2011a). As a result of the diverse history of the sector a mixture of different constitutional arrangements apply. These result from different pieces of legislation that have shaped the development of different groupings of HEI. For example:

Governance arrangements in the ancient universities have a statutory base under the Universities (Scotland) Acts 1858 to 1966. The ancients each have a: Senate (the academic centre of the institution) that is presided over by the Principal (effectively the chief executive officer of the HEI); Court (the governing body with responsibility for the financial and administrative operation of the HEI) that is presided over by an elected rector; and a General Council (the corporate body of senior academics and graduates) that is presided over by the university Chancellor1.

Governance arrangements among the chartered universities that were established in the 1960s come through Royal Charter. The Royal Charter sets out the constitution, statutes and details of how the university should operate in practice. In these HEIs, governance arrangements vary, but commonly involve a Court (the governing body with responsibility for the financial and administrative operation of the HEI) that is presided over by a senior lay member and Senate (the academic centre of the HEI) presided over by the Principal.

For those post-92 universities that were established with the enactment of the 1992 Act, governance arrangements are formally made by Privy Council. Typically, these universities follow similar structures to their predecessors, with a Court responsible for overall governance and a Senate with delegated responsibility for academic matters.

The small specialist HEIs find their governance arrangements within a combination of the 1992 Act (which includes provisions for Scottish Ministers to set out requirements on the membership of the governing body) and the Companies Act (which includes providing annual returns and accounts to Companies House, holding an Annual General Meeting, and maintaining an updated list of directors).

As charitable bodies, all HEIs must also comply with the requirements relating to governance that are set out in the Charities and Trustee Investment (Scotland) Act 1995, including making annual returns to the Office of the Scottish Charity Regulator (OSCR).

Changes to HEI governance arrangements may require Privy Council consent. In practice, this means a positive recommendation from the First Minister, Lord Advocate and, in the case of certain universities, the Lord President of the Court of Session.

1 The Chancellor is effectively the patron for the HEI (referred to as the titular head of the university. The

Chancellor confers degrees to graduates from the university. The post-holder can delegate this activity to a Vice-Chancellor (V-C). The role of V-C is performed by the Principal of the HEI.

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Since 2011 there has been a significant policy focus on the governance of HEIs in Scotland. A review of higher education governance led by Professor Von Prondzynski set out a number of recommendations for changes to the governance of HEIs. These are listed at Annexe F.

The recommendations laid out in the Von Prondzynski review have been carried forward through a range of measures. For example, the sector itself took forward the recommendation for a code of good governance for HEIs in Scotland (Committee of Scottish Chairs, 2013). In contrast, the Scottish Government brought forward primary legislation to improve consistency of practice between HEIs in the governance arrangements that operate. The passing of the Higher Education Governance (Scotland) Act 2016 saw new rules brought in for how HEIs should go about appointing the Chair of Court and for certain statutory members of Court (the governing body of an HEI), including trade union representatives, staff members and students.

HIGHER EDUCATION

Programmes of higher education delivered at both colleges and HEIs are those which sit at Scottish Credit and Qualifications Framework (SCQF) level 7 and above. These include:

Sub-degree2: e.g. Higher National Certificate (HNC) and Higher National Diploma (HND)

First degree: e.g. Bachelor of Arts (BA) with or without Honours, Bachelor of Science (BSc) with or without Honours and Masters of Arts (MA) with or without Honours.

Taught postgraduate: e.g. Master of Arts (MA) or Master of Science (MSc)

Research postgraduate: e.g. Master of Philosophy (MPhil) or Doctor of Philosophy (PhD)

Annexe A shows the full range of SCQF levels and examples of associated qualifications.

HEIs typically offer courses at level 9 and above (i.e. first degree and postgraduate level taught programmes and research programmes), while courses at levels 7 and 8 (i.e. Higher National Certificate (HNC) and Higher National Diploma (HND)) are typically delivered by colleges.

Seventeen per cent of higher education activity in Scotland in academic year 2014-15 was delivered at Scotlands publicly funded colleges. The majority of this activity (98%) was sub-degree level programmes (Scottish Funding Council, 2016).3

The Four Year Degree

It is common in Scotland for a first degree with honours to take four years to complete. In other parts of the UK an honours degree would more typically be delivered over three years. This divergence is long-standing, with the emphasis within Scottish secondary school and higher education being on encouraging a broad based education before specialism in the latter two years of the four year programme.

2 Given the differentiation between sub-degree and first degree study - the former mainly delivered at colleges and

the latter mainly at HEIs the termundergraduate is used in this briefing when referring to both levels of study and first degree / sub-degree when wishing to distinguish between these levels. 3 The 19 HEIs and 25 publicly funded colleges in Scotland are jointly referred to in Scottish legislation as post-16

education bodies

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While the four year degree is common, routes into and through degree programmes are, in practice, more varied. For example, recent policy focus on articulation from college to HEI (being promoted as part of the widening access agenda) has led to an increased focus on programmes involving HNC/HND level study at college. This qualification can then facilitate entry to first, second or third year of a degree programme at an HEI.

Since coming to power in 2007, the Scottish National Party has stated that it remains committed to offering the four year degree familiar to Scottish HEIs. It has, however, recognised the need to offer a more flexible learner journey to respond to the diverse needs of different learners. This includes increasing recognition of the value of a three year ordinary degree and encouraging HEIs to look at options for compressing honours degrees to three years (e.g. by teaching over a longer period in one single academic year) where it is expedient to do so (Scottish Government 2010).

STUDENT NUMBERS

Figure 2 shows that, in academic year (AY) 2014-15, there were 245,842 students studying at Scottish HEIs. The majority were taking a degree programme (63.8%), one quarter (25.8%) were taking postgraduate level programmes and the remaining group (10.5%) were taking an undergraduate programme (e.g. sub-degree). More details on the make-up of the student population at Scottish HEIs in 2014-15 can be found at Annexe B.

Figure 2: Students at Scottish HEIs, by level of study, AY 2014-15

Source: Scottish Funding Council (personal communication)

Figure 3: Proportion of students at Scottish HEIs, by home domicile, AY 2014-15

Figure 3 shows that almost two thirds of the students attending Scottish HEIs in AY 2014-15 were Scottish domiciled (65.7%). Students from the rest of the UK (rUK) made up just over one in ten (12.1%) of the student population. The remaining groups were: international students (those from outside the EU) (13.2%) and EU students (9%).

Source: Scottish Funding Council (personal communication)

245,842 students

63,380 (25.8%) postgraduate

25,704 (10.5%) other undergraduate

156,758 (63.8%) degree

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Figures 4 and 5 show that, among Scottish domiciled students at Scottish HEIs:

The majority (69.5%) were pursuing a degree programme. Most degree students were studying full-time (83.9%)

A further 16.9 per cent were participating in postgraduate study. More than half of these (58.4%) were studying part-time.

The remaining 13.6 per cent were pursuing another form of undergraduate programme. The vast majority of these (82.5%) were studying part-time.

Figure 4: Proportion of Scottish domiciled students at Scottish HEIs, by level of study, AY 2014-15

Figure 5: Proportion of full time and part time Scottish docimiled students, by level of study, AY 2014-15

Source: Scottish Funding Council (personal communication)

Trends in Student Numbers

Figure 6 shows trends in the proportion of full time degree students studying at Scottish HEIs by home domicile for each academic year from 2006-07 to 2014-15. Over this period there have been some changes in the make-up of the full time degree student population at Scottish HEIs, as follows:

- Scottish domiciled students made up 68.6 per cent of the student body in 2014-15, a decline from 72.9 per cent in 2006-07.

- Students from other parts of the UK made up 13.8 per cent of the student body in 2014-15, a decline from 16 per cent in 2006-07.

- EU nationals (not UK) made up 9.7 per cent of the student population in 2014-15, an increase from 5.7 per cent in 2006-07.

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- Students from outside the EU made up 8 per cent of the student population in 2014-15, an increase from 5.4 per cent in 2006-07.

Figure 6: Proportion of full-time first degree students by home domicile, AY 2006-07 to 2014-15

Source: Scottish Funding Council (personal communication)

When looking at the total number of full time first degree students by home domicile in the period academic year 2006-07 to 2014-15, Table 1 highlights slightly different issues:

There has been an increase in the number of full time Scottish domiciled first degree students at Scottish HEIs: rising from 85,479 to 94,148 in this nine year period.

Numbers of full time first degree students from other parts of the UK have remained relatively stable: increasing from 18,743 to 18,924 in this nine year period.

The number of EU nationals studying at Scottish HEIs has almost doubled: from 6,738 to 13,312 in this nine year period.

There has been an increase in the number of international (non EU) students: from 6,371 in 2006-07 to 10,931 in this nine year period.

These figures indicate that student numbers have increased for all student groups. The largest increase is among EU nationals. However, increases have also occurred among Scottish domiciled and international students. Only among rUK students has the trend been relatively unchanged in terms of the number of full time first degree students studying at Scottish HEIs.

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Table 1: Full-time first degree students by home domicile, AY 2006-07 to 2014-15

Scotland rest of UK EU (not UK) International

(not EU) All students

2006-07 85,479 18,743 6,738 6,371 117,331

2007-08 82,733 18,383 7,499 6,205 114,820

2008-09 85,471 18,898 8,587 7,049 120,005

2009-10 90,434 19,365 10,141 8,223 128,163

2010-11 92,176 19,168 10,474 9,052 130,870

2011-12 92,128 18,440 12,129 10,371 133,068

2012-13 92,604 18,716 11,143 9,959 132,422

2013-14 93,318 18,198 12,723 10,750 134,989

2014-15 94,148 18,924 13,312 10,931 137,315 Source: Scottish Funding Council (personal communication)

TUITION FEES

The level of tuition fee that applies to different students is decided on the basis of the students home residence and how long they have lived there. Essentially, since academic year 2012-13, there are three categories of student, each being treated differently in relation to fee charging when pursuing a full time first degree at a Scottish HEI. The first category is Scottish domiciled and EU students (from outside the UK). The second category is rUK students. The third category is international (non EU) students.

Scottish domiciled and EU students

Full time Scottish domiciled and EU students taking a full time first degree at a Scottish HEI are entitled to access higher education without having to pay tuition fees. To cover the cost to the HEI of teaching these students, HEIs receives two sources of income:

1. A block teaching grant provided by the Scottish Funding Council (SFC) to individual HEIs. This grant is intended to support the HEI to deliver its agreed teaching activity as set out in its published outcome agreement (outcome agreements are discussed later).

2. A fee for each individual eligible4 student who accepts a place on an approved programme of full time degree level study at a Scottish HEI. The current fee is 1,820 per annum and is paid by Student Awards Agency Scotland (SAAS) direct to the HEI for each student who applies for support upon taking up a place at an approved programme at a Scottish HEI.

While SAAS does not limit the number of eligible Scottish domiciled and EU students it will pay tuition fee support for, the funding provided by the SFC for teaching may serve to restrict the number of Scottish domiciled and EU students that HEIs recruit. This is discussed further in the next section.

4 Eligible funded students are those who meet agreed criteria such as residence requirements, not having received

funding previously to study at the same or a higher level or who have rights of equal treatment as a result of being an EU national studying in Scotland.

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BOX 1: TUITION FEES IN THE UK COMPARED

First degree students, tuition fee levels by home domicile, AY 2016-175

In Scotland, a Scottish domiciled student does not pay a tuition fee to access a place on a full time degree programme. Rather, a fee is paid directly to the HEI by SAAS. Where a home student chooses to study in another UK country, SAAS does not pay the tuition fee. Instead the student can apply to SAAS for a non-income assessed student loan to pay the tuition fee charged by the HEI.

A Northern Ireland (NI) domicile student who opts to study at an HEI in NI will be charged by the institution a maximum tuition fee of 3,925. A non-income assessed loan is available to meet this charge. However, an NI domicile student who opts to study in another part of the UK can be charged up to 9,000 in tuition. A non-income assessed student loan is available for this purpose.

An England domicile student, regardless of where in the UK they are studying, is required to pay tuition fees up to the current maximum of 9,000. A non-income assessed student loan is available to meet the fee that is charged by the HEI.

A Wales domicile student is required to meet the first 3,900 of any tuition fee applied by the HEI they attend. A non-income assessed student loan is available for this purpose. The Welsh Assembly Government then provides Wales domicile students with a tuition fee grant up to a maximum of 5,100 to make up the total tuition fee charged (up to a maximum of 9,000). This arrangement applies whether a Wales domicile student opts to study in Wales or in another part of the UK.

5 The information in this table is drawn from SAAS, Student Finance England, Student Finance Wales and Student Finance NI

[Accessed 24 May 2016].

http://www.saas.gov.uk/full_time/ug/young/funding_available.htmhttps://www.gov.uk/student-finance/new-fulltime-studentshttp://www.studentfinancewales.co.uk/new-students/201516-what-financial-support-is-available/tuition-fee-support.aspx#.V0QpnctMu70http://www.studentfinanceni.co.uk/portal/page?_pageid=54,1266217&_dad=portal&_schema=PORTAL

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Rest of UK students

When, in academic year 2012-13, the UK government raised the maximum tuition fee amount an English HEI could charge, each of the devolved administrations developed differing policy approaches to tuition fees in response. Box 1 sets out the policy as it applies in each of the four UK administrations.

International Students

Students who come from a non-EU country do not have the same statutory protections with regard to the amount that an HEI can charge for tuition. In its recent report on higher education at Scottish HEIs, Audit Scotland pointed out that non-EU students studying at Scottish HEIs were being charged between 8,880 and 45,000 per annum for tuition. The amount charged to an international student will vary significantly by what and where they are studying.

POLICY CONTEXT

The decisions about where to study, and the overall number of students from different groups that are taking part in HEIs at any given time, is affected by a range of factors. Some of the significant policy issues affecting different groups are briefly considered below.

Scottish and EU students funded places

As noted earlier, Scottish HEIs receive a block teaching grant from the SFC to contribute to the cost of delivering teaching to Scottish domiciled and EU students. The teaching grant allocation is calculated on the basis of an assumed number of places being provided to eligible students. In academic year 2014-15 there were 107,815 full time equivalent (FTE) funded places and 107,201.3 FTE in academic year 2015-16. FTE numbers are arrived at through reference to the previous years funding numbers, and any additional places that are agreed. The numbers are also affected by available public funding and any policy drivers that direct where public funding is targeted.

HEIs are expected not to under-recruit against the number of funded places agreed through the block teaching grant. Nor should they significantly over-subscribe against indicative student numbers set by the SFC. Financial penalties can be imposed where an HEI significantly over-subscribes the number of eligible students (the current threshold is 10 per cent over).

Where an HEIs over-subscribes the number of eligible Scottish domiciled and EU students, the additional number are referred to as fees-only. In essence any over-subscription on the part of individual HEIs means that the HEI does not receive SFC funding to meet the cost of teaching these additional students. The only funding the HEI will receive will be in the form of the tuition fee payment made by SAAS. These measures in effect serve to cap the number of places that a Scottish HEI can offer to eligible Scottish domiciled and EU students.

Rest of UK students deregulated fees

With the introduction of higher fees at English HEIs from academic year 2012-13, English HEIs can now charge a tuition fee of up to 6,000 a year to UK and EU full time degree students. The fee amount can be up to a maximum of 9,000 where the HEI puts measures in place to attract underrepresented groups as well as supporting these students throughout their studies and while they prepare to move to work or further study. These measures have to be published in an access agreement, having been approved by the Office for Fair Access (OFFA, 2016).

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In academic year 2015/16, a total of 1236 higher education providers in England and 49 further education colleges had access agreements in place to allow them to charge the higher tuition fee. Of those that had access agreements in place, the average full-time fee (once fee waivers were taken into account) charged by English HEIs was 8,636 (OFFA, 2016). English HEIs do not have any limits on the number of places that can be offered to student applicants.

In Scotland, the response to the higher fee levels introduced by the UK government in 2012-13 was to establish a voluntary cap on the fees that HEIs in Scotland could charge rUK students to take part in a full time degree programme. The cap was set at 9,000 per annum from academic year 2012-13. Some HEIs set a total maximum fee for four year degree at the equivalent amount that would be charged at an English HEI (in other words at a total maximum of 27,000) while others charge 9,000 per annum for four years (so a maximum tuition fee of 36,000). The passing of the Post-16 Education (Scotland) Act 2013 means that Scottish Ministers now have powers set out in statute to set a statutory cap. To date, the voluntary cap of 9,000 per academic year remains in place. In general terms there is no limit on the number of rUK students that a Scottish HEI can recruit. However, HEIs are restricted in the number of Scottish/EU and rUK students that they can recruit to controlled subjects. Controlled subjects are undergraduate medicine, dentistry and nursing and midwifery as well as undergraduate and taught postgraduate initial teacher training.

EU nationals Treaty agreements

As noted above, because the UK is currently a member of the EU, EU nationals are treated the same way as Scottish domiciled students for the purposes of tuition fee arrangements. Nationals from other EU member states who wish to pursue their studies at a UK HEI are covered by EU Treaty agreements and accompanying European legislation and case law. The two Treaties that underpin the operation of the EU are the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU). Article 20 TFEU establishes EU citizenship for all persons holding the nationality of a member state. Article 21 TFEU grants every EU citizen the right of free movement and residence in any member state of the EU. Finally, Article 18 TFEU states that EU citizens should not face discrimination on the grounds of nationality when exercising this free movement, or any other EU Treaty, right (Macpherson and McIver, 2014).

In combination, these EU Treaty provisions mean that EU nationals, in exercising their free movement rights, should not be treated less favourably than a home student when seeking to access higher education. This means that, when an EU national seeks a place at an HEI in the UK, they should be able to access the same tuition fee arrangements that a home student is eligible for. For EU nationals wishing to study in Scotland the current arrangement where Scottish domiciled students at Scottish HEIs are not charged for tuition apply also to EU nationals.

The current EU Treaty arrangements protect those exercising their free movement rights, but do not extend to the treatment of people from other regions within the same EU member state. This means that Scottish HEIs cannot charge a tuition fee to EU nationals, but rUK students can be charged a fee as there are no legislative restrictions preventing this unequal treatment within the same EU member state.

6 It is difficult to identify an exact figure on the number of higher education providers in England (not including

further education colleges). There are 131 HEIs listed in HESA statistics. This would suggest then that most HEIs in England have access agreements in place to allow them to charge the higher rate of tuition fee.

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International students - recruitment

Recruiting international students is a strategic priority for many Scottish HEIs. There is significant competition between HEIs (both within the UK and internationally) to attract international students, and a number of Scottish HEIs have been working to establish a presence in other countries in recent years as a way of better reaching international markets. For example, a Holyrood article (Whitaker, 2016) highlights the following:

University of Aberdeen is launching a campus in South Korea in March 2017.

Heriot-Watt University has a campus in Dubai and in Malaysia.

Glasgow Caledonian University has a campus in London intended to attract international postgraduates, a nursing college in Bangladesh and a campus in New York.

Edinburgh Napier University has opened a bio-fuel research centre in Hong Kong and has an office in India.

University of Glasgow has a significant overseas presence in China and Singapore.

While Scotland has increased the number of international students it is attracting (as shown in Table 1) competition from overseas HEIs is growing. This along with stricter UK immigration controls present challenges to Scottish HEIs to maintain their competitive advantage (Scottish Government 2010). The cessation of the post-study work visa scheme in the UK in 2012 is said to have created challenges for the HEI sector in being able to attract international students to choose the UK when more flexible visa schemes on offer in other countries may have an influence on where someone decides to study (Universities Scotland, 2016).

The Post Study Work Visa (PSWV) scheme gave international graduates two years leave to remain in the UK and to work without the need for sponsorship. This scheme closed in April 2012, meaning that international graduates seeking to remain in the UK now require sponsorship if they wish to remain in the UK after their studies. The Scottish Government and the Scottish Parliament have both made clear that a post-study work visa scheme should be reintroduced in Scotland. This is said to offer a mechanism to encourage international students to choose Scotland as a destination not just to study but to remain and contribute economically in the longer term (Devolution (Further Powers) Committee, 2016; Scottish Government, 2016).

FUNDING OF HIGHER EDUCATION INSTITUTIONS

Figure 7 shows the distribution of income across the main funding streams at Scottish HEIs in academic year (AY) 2014-157. Scottish HEIs generated a total income of almost 3.5 billion. The largest proportion of income (32%) came from the SFC grant (1.1bn). A further 27 per cent came from tuition fee income (941m). Research income made up 22 per cent of the budget (796.2 million), while other income (e.g. commercial activity and consultancy services) made up 17 per cent (594.1m); only one per cent (49.7m) was endowment and investment income.

7 Figures for 2014/15 are the most up to date currently available (published by HESA, April 2016).

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Figure 7: Scottish HEIs main income streams, AY 2014/15

Source: HESA 2016

Given the variety in size and scope of Scottish HEIs, there are significant differences between HEIs in the amount of income received and the sources of that income. For example, more detailed figures for academic year 2014-15 (presented at Annexe C) show that:

The total income of University of Edinburgh was over 840.7 million, while the Royal Conservatoire of Scotlands income was just under 19.5 million.

The SFC grant accounted for just over 20 per cent of University of St Andrews total income and 67 per cent of the total income of University of West of Scotland.

Tuition fees accounted for 17.5 per cent of University of Dundees income and 49.7 per cent of Heriot-Watt Universitys income.

SCOTTISH FUNDING COUNCIL GRANT

While HEIs are autonomous bodies, each receives funding from the Scottish Government, with the SFC taking on responsibility for onward distribution of this funding to individual HEIs.

The SFC is a non-departmental public body established by the Further and Higher Education (Scotland) Act 2005 (the 2005 Act). It is the national strategic body responsible for funding teaching and learning provision, research and other activities taking place in Scotlands colleges and HEIs. The SFCs main duties include:

Developing policies and strategies that support Scottish Government priorities.

Working with other public bodies to ensure the quality of teaching in colleges and HEIs is assessed and enhanced.

Monitoring the financial health and sustainability of colleges and HEIs.

Collecting, evaluating and publishing relevant statistical data and other evidence about further and higher education.

Providing advice to the Scottish Government on further and higher education.

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In 2015-16, the Scottish Government allocated just over 1 billion to the SFC for distribution to HEIs: 1,062.5 million as revenue funding; and 25.5 million as capital funding.

Figure 8 shows revenue funding allocations to HEIs in cash and real terms (at 2015/16 prices) for the period 2003-04 to 2015-16. This shows that revenue funding rose in both cash and real terms between financial years (FY) 2003-04 and 2009-10 before a decline in FYs 2010-11 to 2011-12. Since then, the budget has been increasing (Annexe D has more detail).

Figure 8: Revenue funding from the Scottish Government to the SFC for HEIs, FY 2003/04 to 2015/16

Source: Scottish Government draft budget documents (2004/05 to 2016/17)

While Scottish Government funding of the SFC is allocated on a financial year basis, the SFC distributes revenue funding to HEIs on an academic year basis.8. This funding is intended to support core teaching and research activity. However, HEIs are free to supplement this with other revenue funding streams e.g. tuition fee income from rest of UK or international students, competitive research awards, commercial income or endowments.

Table 2 provides figures on the final revenue funding allocation from the SFC to HEIs in academic years 2014/15 and 2015/16. Teaching funding makes up the largest portion of the budget representing 63 per cent of total funding in 2014/15 and 67 per cent of total funding in 2015/16. Research funding then makes up a further 28 per cent of SFC funding in both 2014/15 and 2015/16.

Table 2: SFC funding to HEIs, main funding streams AY 2014/15 and 2015/16 (m)

2014-15 2015-16

Teaching 669.9 682.0

Research and Knowledge Exchange 296.1 283.6

Strategic Projects and Grants 101.4 75.4

Sub-total 1,067.4 1,041.0

Transfer to SAAS and fee compensation for additional places

-9.0 -20.0

Total 1,058.4 1,021.0

Source: SFC final funding allocations to HEIs

8 In Scotland the academic year runs from August to July each year.

15

TUITION FEE INCOME

Tuition fee income accounts for over a quarter (27%) of Scottish HEI income in financial year 2014-15. Figure 9 shows that tuition fee income has risen from over 786 million in 2012-13 to just under 941 million in 2014-15 (an increase of approximately 17 per cent over this period). The increase largely comes from the following sources:

UK and EU students; with income rising from 342.5 million in 2012-13 to 418 million in 2014-15 (a rise of just over 18 per cent).

International students: with income rising from 373.6 million in 2012-13 to almost 445 million in 2014-15 (a rise of 16 per cent).

Figure 9: Sources of tuition fee income received by Scottish HEIs, AY 2012-13 to 2014-15 (000)

Source: HESA Finance statistics (held in SPICe)

Fee income from full time undergraduate students has risen significantly in the period between 2012/13 and 2014/15. This is largely a result of the deregulation of fee charges affecting rUK students studying at Scottish HEIs. As Table 3 shows, fee income from full time rest of UK undergraduate students has risen from 28.3 million in 2012-13 to 97.5 million in 2014-15. This income stream is likely to keep rising until those that started their degree before the deregulated fee rate was introduced complete their degree programmes.

Table 3: Fee income, full time first degree students at Scottish HEIs, AY 2012-13 to 2014-15 (000)

Standard fee

rest of UK deregulated fee

non-standard fee

2012-13 207,368 28,300 5,677

2013-14 198,791 68,823 5,971

2014-15 199,269 97,500 5,234

Source: HESA Finance Plus (Table 6a) (provided by Universities Scotland)

16

RESEARCH INCOME

Research funds account for around a fifth of Scottish HEI income. Table 4 shows the research income reported to HESA9 by Scottish HEIs across the five main areas of: SFC research income (as discussed above), UK Research Council; industry; charities; and other research income. This shows that research funding has increased from 866 million in financial year 2010/11 to over 990 million in 2014/15.

Table 4: Research funding streams at Scottish HEIs, AY 2010/11 to 2014/15 (m)

2010/11 2011/12 2012/13 2013/14 2014/15

Scottish Funding Council recurrent grant: research

252.87 251.22 266.63 282.15 285.58

UK Research Councils1 232.05 229.22 241.52 256.37 263.74

Industry, commerce and public corporations

73.42 64.32 67.62 65.77 65.74

Charities 135.11 131.44 132.08 141.76 144.17

Other2 172.82 184.91 198.01 215.61 231.23

TOTAL 866.28 861.10 905.86 961.66 990.46

Source: HESA Finance Plus 2014/15 (figures provided by Universities Scotland) 1 Includes: Royal Society; British Academy; and Royal Society of Edinburgh

2 Includes UK central government bodies, local authorities and health boards; EU government bodies; and other

sources of income, including EU and non-EU

Table 4 shows that the largest proportion of research income comes from the SFC recurrent grant and from UK Research Councils. These sources are intended to complement each other through a dual support system. Under the dual support system the UK research councils offer funding to allow institutions to fund specific projects and programmes. The SFC then complements this with block grant funding that is intended to allow institutions to carry out exploratory and innovative research.

UK Research Council invested just under 1.8 billion in HEIs across the UK in financial year 2014/15. Of this, 263.7 million (15 per cent of the total investment) went to Scottish HEIs.

As well as the SFC and UK Research Council income, HEIs also receive research income from charities, industry, public bodies and European sources. Many of these are funding streams that rely on competitive bidding for funding. Universities Scotland has consistently noted that Scotland performs above its weight in winning research funding through these various competitive sources, with figures from HESA (for 2014/15) showing that Scotland received 13 per cent of total UK investment from charitable organisations and 12 percent of total UK investment from both public bodies and industry.

9 Communication with SFC officials during the drafting of this briefing indicated that the figures reported to /

published by HESA for recurrent research grant funding do not match exactly what the SFC allocate to HEIs for research. HEIs may not consistently be allocating the funding allocation from the SFC between teaching and research streams. However, the figures in the above table are correct based on what HEIs reported to HESA.

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QUALITY ASSURANCE MEASURES

There is a range of activity intended to provide quality assurance within the higher education sector. Three of the measures affecting HEIs in Scotland are considered here: teaching quality; research quality; and outcome agreements between the SFC and individual HEIs.

Teaching Quality10

HEIs have significant autonomy in the design and content of the courses provided. However, given that the Scottish Government provides funding for teaching to Scottish HEIs, it can, through the policy priorities highlighted to the SFC (discussed below) encourage HEIs to supply specific programmes where there are labour market shortages, or where there are concerns about the employability of graduates.

Under current arrangements, it is the Quality Assurance Agency (QAA) that is responsible for assessing teaching quality in UK HEIs. The QAA is an independent body that monitors and advises on standards and quality in UK higher education. It does this through its external reviews of HE providers as well as investigating concerns raised about academic quality and standards. It is also responsible for publishing and maintaining the UK Quality Code of Higher Education.

In Scotland the QAA has developed a distinct approach to assessing teaching quality in higher education. This focuses principally on working in partnership to deliver the Quality Enhancement Framework (QEF). The QEF focuses on achieving high quality and continual improvement in higher education teaching. While assessments of individual HEIs is part of the work of QAA Scotland, with institutional reviews available on the QAA Scotland website, there is no overall assessment on the quality of teaching across HEIs in Scotland or the UK as a whole.

The Higher Education and Research Bill, which is currently being considered by the Westminster Parliament, proposes the creation of a new, student-focused single market regulator, the Office for Students (OfS). This body will enable the OfS to implement a Teaching Excellence Framework (TEF). The aim of TEF is to identify and incentivise the highest quality teaching, drive up standards in higher education, and enhance student choice.

The SFC has highlighted that TEF could have a significant impact on Scottish HEIs as this approach will become the accepted standard for teaching quality. The view is that students from other parts of the UK, and those from outside the UK, will look to TEF when choosing an HEI. So while Scottish HEIs will not be required to participate in TEF, there are implications for student recruitment if they do not.

Research Quality

Alongside the teaching quality assessment conducted by the QAA, HEIs are also assessed on the quality of research. The Research Excellence Framework (REF) replaced the Research Assessment Exercise (RAE) in 2008, with its first report the quality of research at UK HEIs published in December 2014 (REF2014, 2014).

10 The content in this section was informed by written communication provided by officials at the SFC.

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REF2014 was a joint exercise between the Higher Education Funding Council for England (HEFCE); the Scottish Funding Council (SFC); the Higher Education Funding Council for Wales (HEFCW); and the Department for Employment and Learning, Northern Ireland (DEL).

Much like RAE, the REF involves a process of expert review, with research quality assessed across 36 subject areas. The assessment involves grading research quality across five categories: the highest being four star where research is assessed as world-leading in originality, significance and rigour; the lowest being unclassified where research is assessed as falling below the standard of nationally recognised work (REF2014, 2011).

Assessors involved in REF 2014 were asked to assess the submissions from researchers at UK HEIs across three agreed criteria:

Outputs: assessing the quality of submitted research outputs in terms of their originality, significance and rigour, with reference to international research quality standards. This element carried a weighting of 65 per cent in the overall outcome awarded to each submission.

Impact: assessing the reach and significance of impacts on the economy, society and/or culture from excellent research conducted in the subject area as well as the approach taken by the researchers to enabling impact from research. This element carried a weighting of 20 per cent.

Environment: assessing the research environment in terms of its vitality and sustainability, including its contribution to the vitality and sustainability of the wider discipline or research base. This element carried a weighting of 15 per cent.

The results of REF 2014 were then used by the four UK funding councils to:

Inform the selective allocation of research funding to HEIs.

Provide benchmarking information and establish reputational yardsticks.

Provide accountability for public investment in research and demonstrate its benefits.

The report on the results of REF2014 stated that:

The results of the 2014 REF demonstrate the high quality and enhanced international standing of research conducted in UK HEIs. The results show that the quality of submitted research outputs has improved significantly since the 2008 RAE. This is consistent with independent evidence about the international performance of the UK research base. The results also demonstrate that research in all [units of assessment] has led to a wide range of outstanding and very considerable social, economic and cultural impacts. (REF2014, 2014)

The results for Scottish HEIs were found to be above UK averages for all three measures (Universities Scotland, 2014):

Every one of Scotlands HEIs is pursuing research judged to be of world-leading quality.

Seventy seven per cent of Scottish research submitted to REF2014 was judged to be world-leading or internationally excellent (4* and 3* combined). This is higher than the UK average of 76.1 per cent.

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Scotlands performance in REF 2014 exceeds that achieved in the Research

Assessment Exercise 2008, where the overall profile for 4* and 3* research was 52 per

cent.

Scotland performs more highly than the UK average when assessed on the impact of its

research, with 85.8 per cent of Scottish research judged to be at 4* and 3* levels, which

means the research has had an outstanding or very considerable impact. This

compares with an impact of 83.9 per cent across the UK as a whole.

Scotland has the highest rating of 4* and 3* combined in the UK for the research

environment measure.

Outcome Agreements

The Scottish Governments policy priorities for the sector are set out in the annual Ministerial letter to the SFC. In the most recent letter of guidance, issued in February 2016, the then Cabinet Secretary for Education and Lifelong Learning (Angela Constance MSP) set out the following priorities for HEIs for academic year 2016/17:

Access and learning: ensuring high quality, widely accessible learning experiences and world class research.

Continuing to progress measures to widen access to HEIs to those from lower socio-economic backgrounds.

Promoting digital skills through ensuring sufficient course provision to increase the number of graduates with relevant skills as well as continuing to build links between industry and post-16 education providers.

Working with the Scottish Government to take forward the recommendations in the report on review of taught postgraduate student provision in Scotland; taking account of the changes to student support that are taking place in England.

Protecting the core research budget for higher education in order to enable Scottish HEIs to use this funding stream to lever in additional funding from elsewhere.

Promoting innovation as a means of maximising economic impact, competitiveness and productivity so contributing to Scotlands economic policy (Constance, 2016).

Outcome Agreements (OA) are the mechanism through which specific goals for individual HEIs to meet these broad policy goals are set. The SFC introduced OAs in academic year 2012/13 to assist Scottish HEIs to demonstrate the contribution being made by HEIs to the Scottish Governments policy priorities as set out in the governments economic strategy and programme for government.

The aim of OAs is to offer a mechanism for HEIs to demonstrate value for public investment. To arrive at an agreed set of actions within an HEIs OA involves negotiations taking place between the SFC and each individual HEI as to what outcomes the HEI should be aiming to achieve in return for the funding received. This approach with the SFC working individually with each HEI is intended to ensure that OAs are responsive to the particular circumstances of the HEI e.g. taking account of the extent of widening access activity already taking place in the HEI or the teaching specialism that the HEI delivers.

While Outcome Agreements are published on an annual basis, the process now runs on a three year cycle, the current cycle running from 2014 to 2017. The annual OAs for 2015-16 can be found on the SFC website (Scottish Funding Council, 2016b).

20

ANNEXE A: THE SCOTTISH CREDIT AND QUALIFICATIONS FRAMEWORK

Source: SCQF http://www.scqf.org.uk/features/Framework.htm

http://www.scqf.org.uk/features/Framework.htm

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ANNEXE B: STUDENT NUMBERS

Table 1: Students at Scottish HEIs by home domicile, level and mode of study, AY 2014-15

Postgraduate First Degree Other Undergraduate All

Domicile FT PT Total FT PT Total FT PT Total Total

Scotland 11,387 15,975 27,362 94,148 18,033 112,181 3,834 18,087 21,921 161,464

rUK 3,310 5,636 8,946 18,924 775 19,699 91 903 994 29,639

EU 6,402 1,310 7,712 13,312 226 13,538 162 747 909 22,159

International 17,311 2,034 19,345 10,931 407 11,338 685 1,194 1,879 32,562

Not known 1 14 15 - 2 2 1 - 1 18

Total 38,411 24,969 63,380 137,315 19,443 156,758 4,773 20,931 25,704 245,842

Source: Scottish Funding Council Note: These figures include students at the Open University in Scotland

Table 2: Full time first degree students at Scottish HEIs by home domicile, AY 2006-07 to 2014-15

Academic session Scotland Rest of UK Other EU International Total

2006-07 85,479 18,743 6,738 6,371 117,331

2007-08 82,733 18,383 7,499 6,205 114,820

2008-09 85,471 18,898 8,587 7,049 120,005

2009-10 90,434 19,365 10,141 8,223 128,163

2010-11 92,176 19,168 10,474 9,052 130,870

2011-12 92,128 18,440 12,129 10,371 133,068

2012-13 92,604 18,716 11,143 9,959 132,422

2013-14 93,318 18,198 12,723 10,750 134,989

2014-15 94,148 18,924 13,312 10,931 137,315

Source: Scottish Funding Council Note: These figures include students at the Open University in Scotland

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ANNEXE C: MAIN INCOME STREAMS AT SCOTTISH HEIS, 2014/15 (000 / %)

Higher Education Institution (HEI) SFC grant Tuition fees

Research Endowment/ investment

Other income

Total income

The University of Aberdeen 80,277 52,070 63,316 949 43,212 239,824

University of Abertay Dundee 20,751 8,894 1,099 439 3,301 34,484

The University of Dundee 88,720 44,450 82,369 713 37,560 253,812

Edinburgh Napier University 57,568 38,796 4,654 1,440 16,315 118,773

The University of Edinburgh 203,615 221,748 247,391 17,924 150,070 840,748

Glasgow Caledonian University 68,056 35,376 5,780 2,055 11,156 122,423

Glasgow School of Art 15,561 9,419 3,959 338 11,883 41,160

The University of Glasgow 165,458 142,930 172,982 13,653 74,295 569,318

Heriot-Watt University 44,744 102,464 29,556 623 28,924 206,311

Queen Margaret University Edinburgh 14,885 12,580 3,170 372 7,626 38,633

The Robert Gordon University 44,104 36,370 2,298 776 16,971 100,519

Royal Conservatoire of Scotland 10,673 7,080 162 406 1,154 19,475

The University of St Andrews 43,221 77,313 40,468 3,380 48,024 212,406

SRUC 21,707 5,696 16,298 33,758 77,460

The University of Stirling 41,280 28,997 11,555 1,430 28,121 111,383

The University of Strathclyde 101,796 85,936 65,473 3,788 33,270 290,263

University of the Highlands and Islands

37,553 10,092 14,858 104 40,222 102,829

The University of the West of Scotland 70,142 20,760 3,825 1,320 8,204 104,251

Total Scotland 1,130,111 940,971 769,213 49,711 594,066 3,484,072

Higher Education Institution (HEI) SFC grant Tuition fees Research Endowment /investment

Other Income

University of Aberdeen 33.5% 21.7% 26.4% 0.40% 18.00%

University of Abertay, Dundee 60.2% 25.8% 3.2% 1.30% 9.60%

University of Dundee 35.0% 17.5% 32.5% 0.30% 14.80%

Edinburgh Napier University 48.5% 32.7% 3.9% 1.20% 13.70%

University of Edinburgh 24.2% 26.4% 29.4% 2.10% 17.80%

Glasgow Caledonian University 55.6% 28.9% 4.7% 1.70% 9.10%

Glasgow School of Art 37.8% 22.9% 9.6% 0.80% 28.90%

University of Glasgow 29.1% 25.1% 30.4% 2.40% 13.00%

Heriot-Watt University 21.7% 49.7% 14.3% 0.30% 14.00%

Queen Margaret University, Edinburgh 38.5% 32.6% 8.2% 1.00% 19.70%

Robert Gordon University 43.9% 36.2% 2.3% 0.80% 16.90%

Royal Conservatoire of Scotland 54.8% 36.4% 0.8% 2.10% 5.90%

University of St Andrews 20.3% 36.4% 19.1% 1.60% 22.60%

SRUC 28.0% 7.4% 21.0% 0.00% 43.60%

University of Stirling 37.1% 26.0% 10.4% 1.30% 25.20%

University of Strathclyde 35.1% 29.6% 22.6% 1.30% 11.50%

University of the Highlands & Islands 36.5% 9.8% 14.4% 0.10% 39.10%

University of the West of Scotland 67.3% 19.9% 3.7% 1.30% 7.90%

Total all HEIs 32.4% 27.0% 22.1% 1.40% 17.10%

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ANNEXE D: REVENUE FUNDING TO HEIS

Table 10: Scottish Government revenue funding allocation to the SFC for HEIs, FY 2003/04 to 2015/16 (cash and real terms) (m)

Financial Year (FY) cash terms real terms (2015-16 prices)

2003/04 705.6 921.7

2004/05 772.9 979.0

2005/06 810.3 997.2

2006/07 898.3 1,073.8

2007/08 925.1 1,075.2

2008/09 952.5 1,078.5

2009/10 991.1 1,096.3

2010/11 989.3 1,062.4

2011/12 926.2 979.4

2012/13 1,002.2 1,040.7

2013/14 1,041.6 1,059.5

2014/15 1,061.6 1,063.7

2015/16 1,062.5 1,062.5

Source: Scottish Government budget documents. Available here: http://www.gov.scot/Topics/Government/Finance/18127/Documents Real terms figures from SPICe inflation tool - March 2016 Available here: http://www.parliament.scot/parliamentarybusiness/63552.aspx

http://www.gov.scot/Topics/Government/Finance/18127/Documentshttp://www.parliament.scot/parliamentarybusiness/63552.aspx

24

ANNEXE E: TUITION FEE INCOME BY STUDENT CATEGORY, 2012-13 TO 2014-15

2012-13 2013-14 2014-15

Full time undergraduate

standard fee 207,368 198,791 199,269

rUK deregulated fee 28,300 68,823 97,500

non-standard fee 5,677 5,971 5,234

Full time postgraduate (taught)

standard fee 32,034 31,829 33,678

rUK deregulated fee 1,370 3,123 3,139

non-standard fee 16,790 17,576 18,317

Full time postgraduate (research)

standard fee 10,115 12,628 13,334

non-standard fee 3,614 3,047 2,331

Part-time

undergraduate 13,492 14,344 14,060

postgraduate taught 20,069 23,664 26,890

postgraduate research 3,715 3,787 4,349

TOTAL UK AND EU FEE INCOME 342,544 383,583 418,101

Non-EU (international) student fee income 373,618 402,630 444,951

Non-credit bearing fee income 30,433 32,409 30,429

FE fee income 409 872 2,806

Research training fee grants 39,582 41,721 44,684

TOTAL ALL FEE INCOME 786,586 861,215 940,971

Source: HESA Finance Plus (Table 6a) (provided by Universities Scotland) Notes: Standard fee refers to the fee applicable to Scottish domiciled and EU students e.g. 1,820 in academic year 2014-15; rUK deregulated fee to the fee applicable to rest of UK students who commenced their studies from 2012-13 onward; and non-standard fee to all other fees charged. The full effect of the deregulation of fees on the income of HEIs is not yet clear. As these fees were only introduced for new entrants from academic year 2012-13 onward it will take at least four years for the majority of the rUK full time undergraduate population at Scottish HEIs to be paying the deregulated fee charge; and the income of HEIs will continue to rise as this policy measure rolls out.

25

ANNEXE F: VON PRONDZYNSKI REVIEW RECOMMENDATION

2.2 The role of the Privy Council

The existing jurisdiction of the Privy Council in relation to universities and higher education institutions should be transferred to a committee comprising the First Minister of Scotland, the Lord Advocate and the Lord President of the Court of Session, subject to parliamentary scrutiny.

2.3 A New Statute of the Scottish Parliament

The Scottish Parliament should enact a statute for Scotland's higher education sector setting out the key principles of governance and management and serving as the legal basis for the continued establishment of all recognised higher education institutions.

Under the new statute, the designation 'university' should be reserved to independent public bodies accredited in Scotland under legislation for these purposes.

2.4 Academic Freedom and Institutional Autonomy

A definition of academic freedom should be incorporated in the statute governing higher education, based on the definition contained in Ireland's Universities Act 1997, and applying to all 'relevant persons' as under the existing 2005 Act.

Scottish universities and higher education institutions should adopt a similar approach and that each institution should adopt through appropriate internal processes, and present to the SFC, a statement on its implementation of the statutory protection of academic freedom.

2.5 The Role of Governance

Governing bodies should be required to demonstrate that their deliberations and decisions appropriately observe the four objectives the panel has set out for university governance, and they should regularly review their own performance against these.

The fundamental principle of a collaborative approach wherever appropriate should be enshrined in the Scottish university system through making the fostering of collaboration between universities a task for the Scottish Funding Council.

2.8 Advisory Forum

A Scottish Higher Education Forum should be established, convened by the Scottish Funding Council and chaired by the Cabinet Secretary for Education and Lifelong Learning, which would meet on fixed dates at least once a year.

2.9 The Relationship with Further Education

All Scottish universities should not only include responsibilities to their region, alongside their national and international objectives, in their mission statements, but also seek ways to engage proactively, for the benefit of students and the Scottish education system as a whole, with further education institutions and any new governance structures that may be put in place.

3.1 Appointment and Role of Principals

The heads of Scottish higher education institutions should be described as the 'chief officer', and that the job title should continue to be 'Principal'.

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There should be widened participation in the process for appointing Principals, and core to this approach should be the reform of the way in which of appointment panels are set up and operate.

The appraisal of Principals should involve external governing body members, staff and students.

3.2 Remuneration of Principals and Senior Management

Further percentage increases beyond those awarded to staff in general should not take place until existing processes have been reviewed and, if appropriate, amended.

Universities should ensure that any payments that may be perceived as bonuses are either abolished or at least transparently awarded and brought into line with the scale of 'contribution payments' available to on-scale staff.

Remuneration committees should include staff and student members. The work of the committee should be transparent, and in particular, the basis upon which pay is calculated should be published. While the Framework Agreement, determining pay scales for university staff up to the grade of professor, is a UK matter, the Scottish Government should investigate whether it might be extended north of the border to include all staff including Principals. There should be a standard format for reporting senior officer pay, and the SFC should publish these figures annually.

The SFC should investigate how the principles of the Hutton Report are being or should be applied to universities in Scotland.

4. Role, Composition and Appointment of Governing Bodies

Meetings of governing bodies should normally be held in public unless the matters under consideration are deemed to be of a confidential or commercially sensitive nature; these exceptional matters should be established through clear guidelines.

4.1 Chairing of Governing Bodies

The chair of the governing body should be elected, thus reflecting the democratic ideal of Scottish higher education (recommended by a majority, one member dissenting).

The chair should receive some form of reasonable remuneration (recommended by a majority, one member dissenting).

4.2 Membership of Governing Bodies

Positions on governing bodies for lay or external members should be advertised externally and all appointments should be handled by the nominations committee of the governing body. Each governing body should be so constituted that the lay or external members have a majority of the total membership.

There should be a minimum of two students on the governing body, nominated by the students' association/union, one of whom should be the President of the Students' Association and at least one of whom should be a woman. There should be at least two directly elected staff members. In addition, there should be one member nominated by academic and related unions and one by administrative, technical or support staff unions. The existing system of academic board representatives (called 'Senate assessors' in some universities) should also be continued. Governing bodies should also have up to two alumni representatives.

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The existing practice in some universities of having 'Chancellor's assessors' should be discontinued.

Each governing body should be required to ensure (over a specified transition period) that at least 40 per cent of the membership is female. Each governing body should also ensure that the membership reflects the principles of equality and diversity more generally, reflecting the diversity of the wider society.

Governing bodies should be required to draw up and make public a skills and values matrix for the membership of the governing body, which would inform the recruitment of independent members of the governing body. The membership of the governing body should be regularly evaluated against this matrix.

Expenses available to those who sit on the governing body should include any wages lost as a result of attending meetings.

Senior managers other than the Principal should not be governing body members and should not be in attendance at governing body meetings, except for specific agenda items at which their individual participation is considered necessary, and for those agenda items only.

4.4 Training

All universities should be required to ensure that governors - including external governors, staff governors and student governors - are fully briefed and trained, and their knowledge should be refreshed regularly in appropriate programmes. Each governing body should be required to report annually on the details of training made available to and availed of by governors.

5.1 Composition of the Academic Board and Appointment of Members

In line with existing legislation applying to the ancient universities, the academic board should be the final arbiter on academic matters.

Apart from the Principal and the heads of School (or equivalent) who should attend ex officio, all other members should be elected by the constituency that they represent, and elected members should form a majority of the total membership. In establishing the membership of the academic board, due regard should be given to the principles of equality, and the need for the body to be representative. This includes a requirement to ensure that there is significant (rather than token) student representation. Overall, academic boards should not normally have more than 120 members.

7.1 Whistleblowing

All universities should maintain a whistleblowing policy, and this should be under the overall control of the governing body. Such a policy must include a clear process a person, whether a member of the university or not, wishing to make a complaint can access, and it should be proactively publicised.

7.2 Evidence Base

The Government should instruct the Scottish Funding Council to establish in an appropriate academic setting a Scottish Centre for Higher Education Research, which should be available as a resource for the entire higher education sector and for government.

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7.3 Avoiding Bureaucratisation

The Scottish Funding Council should undertake a review of the bureaucratic and administrative demands currently made of higher education institutions from all government and public agency sources, with a view to rationalising these and thereby promoting more transparent and efficient regulation and governance.

7.4 Code of Good Governance

The Scottish Funding Council should commission the drafting of a Code of Good Governance for higher education institutions.

Please click on the below link which will take you to an opinion from panel member Mr Alan Simpson on the recommendations from this report: Letter on recommendations

http://www.gov.scot/Topics/Education/UniversitiesColleges/16640/ReviewHEGovernance/RecommendationsLetter

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SOURCES

Audit Scotland (2016) Audit of Higher Education in Scottish Universities. Available at:

Committee of Scottish Chairs (2013) Scottish Code of Good HE Governance Available at: http://www.scottishuniversitygovernance.ac.uk/wp-content/uploads/2013/07/Scottish-Code-of-Good-HE-Governance.pdf

Constance, A (2016) Scottish Funding Council: letter of guidance 2016-17, 8 February 2016 Available at: http://www.sfc.ac.uk/web/FILES/AboutUs/SFC_Additional_Letter_of_Guidance_-_2016-17.pdf

Devolution (Further Powers) Committee (2016), Welcome to Scotland? A Report on Post-Study Work Visas Scottish Parliament, 13 February 2016. Available at: http://www.parliament.scot/S4_ScotlandBillCommittee/Reports/DFPS042016R02.pdf

Johnson, S (2014) Alex Salmond unveils tuition fee tribute as he resigns 14 November 2014. Available at: http://www.telegraph.co.uk/news/politics/SNP/11238554/Alex-Salmond-unveils-tuition-fees-tribute-as-he-resigns.html

OFFA (2016) Office for Fair Access website Available at: https://www.offa.org.uk

Quality Assurance Agency Scotland (2015) Annual Report 2014-15. Available here: http://www.qaa.ac.uk/en/Publications/Documents/QAA-Scotland-Annual-Report-14-15.pdf

Quality Assurance Agency Scotland (2016) Strategic Directions 2015-17. Available here: http://www.qaa.ac.uk/en/AboutUs/Documents/QAA-Scotland-Strategic-Directions-2015-17.pdf

Quality Assurance Agency (2016) http://www.qaa.ac.uk/about-us/scotland

REF2014 (2011) Assessment Framework and Guidance on Submissions Available at: http://www.ref.ac.uk/media/ref/content/pub/assessmentframeworkandguidanceonsubmissions/GOS%20including%20addendum.pdf

REF2014 (2014) Research Excellence Framework 2014: the results Available here: http://www.ref.ac.uk/media/ref/content/pub/REF%2001%202014%20-%20full%20document.pdf

Scottish Government (2010b) Building a Smarter Future: towards a Sustainable Scottish Solution for the Future of Higher Education. Edinburgh: Scottish Government. Available at: http://www.scotland.gov.uk/Publications/2010/12/15125728/0

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RELATED BRIEFINGS

Berry, K (2011) SB 11-57 Higher Education Institutions: Subject Profile [601KB pdf] Berry, K & Georghiou, N (2011) SB 11-89 Higher Education: Tuition fees and the funding gap [685KB pdf]

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CONTENTSEXECUTIVE SUMMARYBACKGROUNDGOVERNANCE OF HIGHER EDUCATION INSTITUTIONSHigher EducationThe Four Year Degree

STUDENT NUMBERSTrends in Student Numbers

TUITION FEESScottish domiciled and EU studentsBOX 1: TUITION FEES IN THE UK COMPAREDFirst degree students, tuition fee levels by home domicile, AY 2016-17Rest of UK studentsInternational Students

POLICY CONTEXTScottish and EU students funded placesRest of UK students deregulated feesEU nationals Treaty agreementsInternational students - recruitment

FUNDING OF HIGHER EDUCATION INSTITUTIONSSCOTTISH FUNDING COUNCIL GRANTTUITION FEE INCOMERESEARCH INCOME

quality assurance measuresTeaching QualityResearch QualityOutcome Agreements

ANNEXE A: The scottish credit and qualifications frameworkANNEXE B: STUDENT NUMBERSANNEXE C: Main income streams at Scottish HEIs, 2014/15 (000 / %)ANNEXE D: REvenue funding to heiSANNEXE E: Tuition Fee income by student category, 2012-13 to 2014-15ANNEXE F: von prondzynski review recommendationSOURCES