Sustainable University Provision in Scotland1. Scale of Funding Challenge
Position of Scottish Universities prior to Current Financial Crisis
Green Paper – December 2010
`It is clear that at around 1%, Scotland provides less funding as a proportion of its GDP than our sector’s main competitors’
England 1.3%; Sweden 1.4%; Canada 1.5%; India and China 2%; US 2.9%; Australia 5.8%
SFC Recurrent Funding for HE - Budget 2010 projections
£1,086,664,880
£989,300,000
£964,216,294
£945,349,941
£900,000,000
£920,000,000
£940,000,000
£960,000,000
£980,000,000
£1,000,000,000
£1,020,000,000
£1,040,000,000
£1,060,000,000
£1,080,000,000
£1,100,000,000
FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14 FY 2014/15
Inflation
Flat cash
Scottish Block
Actual 11/12 & maintain share
SFC Capital Funding for HE
£91,388,374
£83,200,000
£81,090,464
£83,200,000
£36,966,837
£30,000,000
£40,000,000
£50,000,000
£60,000,000
£70,000,000
£80,000,000
£90,000,000
£100,000,000
£110,000,000
£120,000,000
FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14 FY 2014/15
Inflation
Flat cash
Scottish Block
Actual 11/12 & maintain share
Impact on UWSScottish Government Funding2009/10 to 2011/12
2009/10 2010/112011/12
Recurrent 72,185,985 72,862,58868,021,398
Capital 5,000,000 2,600,000 1,600,000
Total £77,185,985 £75,462,588 £69,621,398
Impact on UWS
Assuming 4% inflation adjustment to 2009/10 figures
2010/11 2011/12Recurrent 75,073,424 78,076,361Capital 5,200,000 5,408,000Total £80,273,424 £83,484,361
Reduced Funding in real termsRecurrent £10,054,963 - (13.9%)
Capital £ 3,808,000 - (76%)Total £13,862,963 - (18%)
Structural Options? Scottish Solutions Work
• Make the learner journey more efficient: reduce duplication of levels of study between school/ college/ university;• Drive forward efficiency, collaboration, shared services;• Keep public funding at the core: supplement with fair and moderate graduate contribution;• NB international and rest-of-UK challenges.
Scottish Government Response
• Green Paper December 2010:– Affirms commitment to restoring competitive
funding;– Open on learner journey;– Open on financial models;– But loads in almost every other possible issue
about function, structure and governance of universities.
Scottish Government Response
• Agreed (finally) to joint work with Universities Scotland to scale the comparative funding gap with England and the possible means of filling it.
Technical Group Report
Table 1: Potential Funding Differences by 2014/15
Average English Fee
Annual funding gap by 2014/15
Comments
£7,000 (not indexed)
£96m Assumes that the average English fee is set at the lower end of the
£6,000 to £9,000 range and is not indexed in line with inflation.
£7,500 (not indexed)
£155m Assumes that the average English fee is set at the level adopted by
the Treasury and is not indexed in line with inflation.
£7,500 (indexed)
£200m
Assumes that the average English fee is set at the level adopted by the Treasury in 2012/13 and is
increased with inflation.
£8,000 (indexed)
£263m
Assumes that the average English fee is marginally above the
Treasury’s assumptions and is increased with inflation.
Technical Group Report
Table 2: Fixed Graduate Contribution to raise £100 million per annum Discount rate 2.2% 3.5% 6.5% Fixed Contribution
£5,400
£5,700
£6,500
Contribution from Scottish and EU graduates, payable on graduation
Technical Group Report
Table 3: Income from students from the rest of the UK Average
Scottish fee for RUK students
Contribution to the funding gap
by 2014/15
Comments
Low assumption
£5,625
£41m
Assumes 20% decrease in demand over the period.
Middle assumption
£5,625
£52m
Assumes static demand.
High assumption
£6,375
£74m
Assumes 20% increase in demand over the period.
Technical Group Report
• Other options (business, philanthropy, efficiency) won’t make a difference to the comparative funding gap
Political Responses
• SNP – cherry-pick figures to reduce funding gap to £93m and agree to fill it for 2012-13 from reprioritised public funding and RUK fees. ‘Democratic intellect’ governance proposals.
• Labour – similar cherry-picking. Conditional intention to fill funding gap from same sources but only after ‘root and branch review’ of FE and HE.
Political Responses
• Lib Dems: committed to filling funding gap from same sources, want to look at learner journey issues, student support.
• Conservatives: support graduate contribution, increased funding for universities for social and economic reasons.
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