Vladimir Unkovski-Korica and Jenny Morris examine the crisis in Scottish universities

The UK Higher Education sector is facing significant problems. Over a third of HE institutions are running at a loss. Multiple universities have engaged in cost-cutting measures, including painful redundancy programmes. Several are teetering on the edge of bankruptcy. Scottish institutions, sometimes assumed to be partly insulated from the sharpest effects of the crisis, have followed suit. After Robert Gordon University in Aberdeen announced up to 135 jobs could be made redundant following a shortfall in student intake, Dundee University publicised a staggering £30 million deficit and job cuts.

More recently, the University of Edinburgh introduced a controversial voluntary redundancy scheme starting in January, refusing to rule out further cuts and potentially compulsory job losses, and appointing ‘turnaround specialist’ Nirmal Borkhataria as the Interim Director of Finance. Elsewhere, at the University of Glasgow, the high-profile Social and Public Health Sciences Unit (SPHSU) is to close in 2025, with dozens of jobs at risk, following a change in the funding model at the UK Research and Innovation Medical Research Council (MRC) which has sustained the centre for decades.

These announcements may represent the tip of an iceberg. In this article, we try to explain why all this is happening and what should be done to respond to the crisis.

Marketisation and austerity

The crisis in higher education (HE) is the culmination of deeper, and longstanding, problems with the UK economic model. Envisaged as an engine of the ‘knowledge economy’ under New Labour, universities underwent a dramatic shift in their societal, economic and political role. To illustrate this, it’s enough to point to some major shifts statistically. Real income of HE providers in England almost doubled between 1993/4 and 2022/3 to £44 billion per year. The sources of funding have changed as dramatically. Tuition fees, introduced by New Labour, accounted for just under a quarter of funding in 2005/6, but this had increased to over half after 2019/20. Similarly, direct government financing through the higher education funding bodies fell from 39% in 2005/06 to 12% of the total in 2022/23.

These numbers demonstrate the increasing reliance of the HE sector on the market– student fees in particular – and the progressive diminution of the role of state funding in higher education. What they do not show is the huge inequalities that have become rife in the sector. One key moment was the trebling of student fees to £9,000 announced in 2011, raised again in 2017 to £9,250. Another key moment was the lifting of the institutional numbers cap in 2015 in England, leading to so-called ‘elite’ universities hoovering up more students, while the ‘least selective’ universities have seen a 15.9% drop in new undergraduate entrant numbers via UCAS since 2016.

The result has been increased financial pressure on the least selective institutions. Moreover, with fees remaining flat from 2017, government spending low, and inflation accelerating after the COVID-19 pandemic and the Ukraine War, most institutions made progressively less money per domestic student.

That combination of factors pushed the sector towards a significant over-reliance on international student fees, which are uncapped, particularly at post-graduate level, to make up the funding shortfalls. Numbers of international students shot up, from 12% in 2001/2 to 24% in 2021/2. Numbers grew again by 12% to record numbers in 2022/3, but applications fell dramatically in 2023/4, around 16% lower in the period January to July 2024 compared with the preceding year. The cycle of boom and bust portended a fresh crisis in funding.

The Scottish landscape

As the funding crisis has become increasingly public, the Labour government elected this year increased fees, although the 3% rise will further impoverish students without making any significant difference to the funding crisis. In Wales, student fees have been very similar to England while in Northern Ireland they are lower at £4710. In contrast, Scotland has had a distinct funding policy and landscape. It first changed fees to a graduate tax, which was itself abolished by the SNP in 2007, with student places funded by the Scottish government. Public funding of universities in Scotland has, however, remained woefully inadequate.

Scotland only has limited devolved tax powers, such as income tax. The Scottish government certainly could do more within its existing powers. For example, the STUC 2023 report Raising taxes to deliver for Scotland outlines a wealth tax, alongside a number of local taxes, which could be implemented under the current devolution model. Nonetheless, there are fundamental limits on Holyrood’s power, with highly circumscribed borrowing powers, that mean it often ends up implementing austerity lite, leaving Scottish HE exposed to similar pressures as the rest of the UK.

The amount of funding per student by the Scottish government has fallen in real terms over the last decade. According to the Institute for Fiscal Studies (IFS), the value of the teaching grant was almost a fifth lower per student in 2023/24 than in 2012/3. The pressures on Scottish institutions are therefore comparable to those on English universities, in the sense that public funding is increasingly inadequate. But Scottish universities face the added pressure of providing a four-year, not three-year degree as in England, increasing the cost per student. They, too, therefore, have turned increasingly to the international student market to plug the gap in funding.

According to calculations made by The Ferret, seven of Scotland’s universities made more than a quarter of their income from non-EU students in 2022/3. The subsequent fall in enrolment in 2023/4 created a funding gap of £100 million, according to Universities Scotland, which predicts future gaps going forward. These are partly down to the change in the UK visa regime, which limits dependents coming to the UK with student visa holders. However, they are also down to key student markets, like China, becoming less interested in the UK as a destination for study, in favour of alternatives closer to home, like Singapore or Australia. British foreign policy, joined at the hip with US foreign policy, is based on confrontation and rivalry with China as the main competitor to the global hegemony of the collective West, meaning that the over-reliance on China as a student market is only likely to exacerbate the crisis of funding in HE in the short to medium term.

On top of that, the new Scottish budget represented another real-terms cut of 0.7% according to Universities Scotland. The result is an embedded sector-wide crisis, with no obvious escape route. With the Holyrood election coming up in 2026, there is likely to be quiet lobbying by employers to introduce fees for Scottish students to alleviate the funding gap and allow a diversification of income streams. 

Struggling universities

The challenges facing the UK higher education sector cannot be reduced simply to financial terms. The rise of managerialism, the intensification of work, the proliferation of precarity, the continuation of inequalities, and the real term pay cut in the sector of up to 20% since 2008 has blighted the work and lives of staff. 

It is no wonder that the sector has been at the forefront of industrial action since the pensions dispute of 2017/8, culminating in the Marking & Assessment Boycott of 2022/3. The period was punctured by some significant victories for the trade unions over the years, like the restoration of the USS pension, which was finally confirmed in April 2024. But the MAB in 2022/3 ended painfully. The leadership dragged its feet over calling a ballot during the summer of 2023 and created a gap between industrial action mandates, thereby rendering continuation of the action impossible. That meant that the most sustained industrial action that UCU had mounted over this entire period ended in disorderly fashion, without achieving better pay or conditions. That defeat, and the manner of it, has visibly dampened the mood among the rank-and-file in the past 18 months.

The crisis in HE goes beyond worsening pay and conditions for its staff, however. It should in fact also be understood as a wider crisis of education affecting students and wider society. Both the quality of education and the conditions of study have visibly deteriorated over the years in a number of ways. Students today face an assessment- and grade-driven approach to learning, overcrowded courses, teaching by overworked staff, study while having to work and deal with financial difficulties of their own, mounting debts and a bleaker future, both in narrow employment terms, but also in terms of a world increasingly blighted by environmental disaster and violent conflict. 

In a sense, it is not surprising that student politics in the UK was long dormant after the failed uprising against Tory trebling of fees in 2011. The ‘polycrisis’, as the historian Adam Tooze has called it in early 2023, fusing the Covid-19 pandemic, the Ukraine war, the cost of living and the climate crises, has made the sense of crisis a collective, lived experience.Despite the difficulties we face, it is clear that a significant, militant minority has emerged on campuses, ready to contest the direction of travel of universities and politics more widely in the 21st century. This has become most obvious by staff-student responses to the Israeli genocide in Gaza in 2023-4. Universities are not in fact ivory towers, and both staff and students have been actively engaged in the global mass solidarity movement with Palestine that emerged since October 2023, both off and on campus. Tens of thousands of staff and students have taken part in mass, national demonstrations, and there have been local breakthroughs as well.

From university encampments in Aberdeen and Edinburgh, to the Stop the War national workplace days of action at several Scottish universities, a significant minority of staff and students have done much to bring the spirit of protest to the university. Pro-Palestine campaigners at Glasgow Caledonian University (GCU) called for a boycott of the university’s multi factor authentication system because of links to an Israeli tech company with close ties with the Israeli Defence Forces (IDF). The election by thousands of students of the Palestinian medic, Ghassan Abu-Sittah, as Rector at the University of Glasgow in 2023/4, was an internationally recognised high-point for the student movement in Scotland. Such struggles are not limited to Palestine solidarity sentiments. They inherently touch on wider issues of power in universities and society. There has been Scotland-wide campaigning to challenge the adoption by universities of the IHRA definition of anti-Semitism, which silences criticism of Israel and conflates anti-Zionism with anti-Semitism. Trade unions and student groups have engaged in wider struggles against racism, and rallied against the outburst of anti-immigrant riots and Islamophobia, driven in large part by Britain’s foreign policy, in autumn 2024.

For properly funded, free education

Such activism may seem removed from the funding crisis in HE, but the reality is that it holds the key to a wider fightback. What we desperately need is a sharp turn by trade unions and student organisations towards political demands that challenge the priorities of both Holyrood and Westminster. As marketisation was a choice by New Labour, and austerity was a choice under the Tories, so the current turn towards downsizing in the sector at the expense of staff and students should not be seen as inevitable.

If there is money for boosting defence spending to 3% of GDP, and if some sectors (like private energy companies) are making booming profits at the expense of the public, then our response necessarily needs to be political. We can and should be arguing for investment in welfare, not warfare, and for taxing the rich to fund public services. But we also have to make the case for education as a public good, not a cash cow. That means we need a campaign led by trade unions and student groups for a properly funded, free and democratic university sector, that goes beyond simple economic arguments, and points to the broader benefits of education for our communities and the wider world. Concretely, in Scotland, we need to campaign both against redundancies and for free education, but we cannot stop there. While it is right to pressure Holyrood, it is ultimately Westminster that makes decisions about HE. We need, therefore, a UK-wide response, which accounts for the complexities of the devolved settlement of the national question, but which also puts effective pressure on the state in London.

Such an approach means that we can champion Scotland’s successes, like free tuition for Scottish students, as policies that ought to be improved and extended, both in Scotland and in the UK, and not curtailed, as we will soon come to be pressed to do. All this should imply the need for a more united and outward looking trade union and student movement, that builds links with others in the wider public sector, and beyond, and makes political demands of the establishment and the state. Mass demonstrations, days of action, public rallies, petitions, specialist and popular publications, activist trade and student unions with an industrial strategy arm-in-arm with a campaign in defence of a free and properly funded higher education, are all needed both in Scotland and at UK level.

We should not settle for devolved neoliberalism in Holyrood and a re-cooked Blairism in Westminster. We can do better, and we can do so by reviving the best traditions of the Scottish and British labour movements, which require us to act independently of the mainstream political parties and to build power from below. It will not be easy. But, to quote the late Bob Crow, the leader of the RMT, one of Britain’s most militant unions in recent times: ‘If you fight you won’t always win. But if you don’t fight you will always lose.

A demonstration will be held on January 29th at Holyrood to demand proper Higher Education funding.

This article was reposted from Conter.