Scottish universities are facing increasing financial pressures due to rising UK taxes and falling numbers of international students. Institutions are warning of possible job cuts and funding disparities that could become even more pronounced.
Tax Hikes Push Scottish Universities to Demand Millions—What’s at Stake?
By Chourouk Derkaoui
Published on 21 November 2024 15:10
With tax rises by the UK government and a decline in international student numbers, Scottish universities are urging the Scottish Government to give them an immediate £49 million boost to their budgets.
As financial pressures mount, leading universities including Dundee, Edinburgh and Robert Gordon University have already warned staff of impending cuts and job losses. Salary costs have risen dramatically in the sector as a result of increased costs, mainly due to increases in national insurance.
Tax Increases and Funding Gaps Strain Scottish University Education
The recent National Insurance increases are expected to cost Scottish universities between £45 million and £57 million over the next financial year, according to projections from Universities Scotland and the Institute for Fiscal Studies (IFS).
This measure adds to the already existing gap in education funding: Scottish universities currently receive 21% less per student than their English counterparts, or £2,020 less per student.
In addition, Scottish universities face increasing pressure to maintain competitive standards and high quality teaching, as tuition fees in England are set to rise to £9,535 in April 2024.
Falling Numbers of Foreign Students Exacerbate Financial Difficulties
In addition to tax hikes, a sharp decline in international student applications has created further revenue shortfalls. While Scottish universities celebrated record enrolments in 2022/23, recent application numbers have fallen, removing a critical source of funding.
Universities Scotland has described this drop as a blow worth "tens of millions" and warned of its potential long-term impact on the financial sustainability of the sector.
Amid these mounting challenges, the Scottish Government has called on the UK Government to reimburse the public sector for the increased costs imposed by the tax changes, estimated at over £500 million. Without swift action, universities warn that the future of Scotland’s higher education system could be at serious risk.