From A-list to Austerity: The Funding Crisis Ravaging Scotland’s Universities

by Harry Ness

Posted on 15 May, 2025

It bulldozes you; the sudden realisation that now, now is the time that sets up the rest of your life. For university students, life on campus can be, should be, a hive of culture, buzzing with colour, sunshine, the relentless tapping of keyboards, drowning in coffee. But for students in Scotland, life has been torpedoed by strikes, cuts and covid.

A generation ago, Scotland’s universities were a source of pride, but now the sector is in peril: The University of Dundee is cutting 632 full-time jobs (1). It’s running with a deficit of £35 million – prompting an independent probe by the Scottish Funding Council in order to find out how this has actually happened. At the University of Edinburgh, (2) 350 workers have taken voluntary redundancy. In Aberdeen at the Robert Gordon University, 135 jobs look set to be condemned to cuts (3). And it’s going to get worse; when the Scottish Funding Council publishes its delayed annual assessment of Scotland’s university sector, we’re bracing ourselves for the bombshell confirmation that more than half of Scotland’s universities are now suffering from deficits (1).

The plan for a £265 million University of Dundee expansion into the Dundee city centre is proof of the desire to redevelop and modernise Scotland’s university campuses and infrastructure for the 21st century – but how can we do that when our universities are already being shrunk and cut due to a funding crisis? Universities Scotland, representing all of Scotland’s university institutions, cites a decade of under-investment (1) by the Scottish government in the higher education sector. It says that the level of funding for universities has not kept pace with inflation or with the number of students – no one can seriously argue against this after news coming from universities in Dundee, Aberdeen and Edinburgh, all of whom are facing cuts, job losses and strikes due to depleting deficits, and funding per student in Scotland has fallen decreased 39% in real terms over the last decade (4).

Free tuition allows for talented young people to go to university, which they could otherwise not afford. This is a priceless benefit and one that has been committed to preserving by both Scottish Labour and the SNP; but the crisis in university funding has woken Holyrood up to the fact that the current model for university funding is unsustainable. So many universities up and down Scotland in financial crisis is not a coincidence, alternative methods of funding have to be explored by the Scottish Government, including scrapping universal free tuition and the introduction of a graduate levy. Scotland already has an apprenticeship levy that helps fund new apprenticeship programmes and contributing towards a more skilled workforce, likewise a graduate levy could fund both more graduate apprenticeships and training schemes which would boost productivity and skills amongst new graduates, bringing further individual and economic benefits, in addition to creating more structured and secured routes into full-time employment for graduates.

With Scotland’s public finances under immense pressure across the board; it’s clear that the Scottish government has to prioritise investment in areas with high economic return and advantages. Our higher education and universities are just that: Universities Scotland detailed that the economic impact of research and innovation within higher education achieves £8 in economic benefit for every £1 of government investment (4). The UK government cites the progression of young people from socio-economic deprivation to high-skilled employment post-graduation, bringing welfare, health and social benefits that are worth increased public investment from devolved government (6). By turbo charging and spreading the rate of upskilling across under and post-graduates, it enhances Scotland’s pool of graduate talent that then attracts private and public sector growth whilst bringing more investment into Scotland’s businesses and communities. Increased investment in research and innovation within our universities is worth its weight in gold.

Increasing investment and capacity for upskilling young people is desperately needed, and economic growth is the only route we can take that drives us towards revitalising public finances. Growing and modernising our university facilities is worth it, but our universities are being cut and shrunk, and students need more time with staff. In 2024, a record 31,970 Scottish students secured university places, marking a 6% increase from the previous year (5). But a nominal 1.9% increase in teaching funding was marked with a warning from Universities Scotland, who say that when adjusted for inflation, this represents a real-terms cut that further exacerbates financial strains on Scotland’s university intuitions, whilst ensuring that students are spending less and less time learning from experts (4). For a generation who have already lost priceless hours of education during the covid pandemic – the benefits of more focused and student-specific learning with staff are more valuable than ever before, but just as with primary and high school pupils, students aren’t able to have more focused learning and time with experts and support staff due to the proportion of pupils and students per teacher increasing.

The 2026 Holyrood election is getting closer and closer, it’s clear that the funding of universities and the sector’s financial crisis will be a colossal issue – and one that Scottish Labour needs to lead on. This is yet another SNP-caused crisis by yet again failing to see the wood for the trees when it comes to the rotting of Scotland’s public sector and once prized institutions. Scotland’s universities and Scotland’s wider education sector has been declining year after year without effective intervention from the Scottish government – despite the SNP having 18 years in power.

Nicola Sturgeon emphasised that her legacy should be judged on her government’s performance on education – well it is, and her legacy is in tatters.

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