In July, universities were facing a total deficit of between £450 million and £500m in the 2020/21 academic year due to the impact of Covid-19, an outlook that has improved to around £176m, according to the Scottish Funding Council’s most recent estimates.
The potential loss of international student fees and accommodation income were predicted to further exacerbate the impact of Covid-19, but universities are now warning the lack of additional funding from the UK Government and the impending Brexit deadline could worsen the situation further.
Professor Gerry McCormac, convener of Universities Scotland and principal of the University of Stirling, said the sector required a “reliable, sustainable funding settlement” from the Scottish Government to make up for the estimated £157m gap between funding and the full cost of provision.
He also called on the Scottish Government to "reverse” what universities claim is a real-terms funding cut of £750 per student.
Prof McCormac said: “It is regrettable that with only days to go until the end of the transition period, we still have no clarity over our future research relationship with the EU, nor do we know if we will be members of the Erasmus student mobility scheme.
"Whilst we welcome the commitment that all EU funds will be covered, the lack of detail around the Shared Prosperity Fund is of concern.
“In January’s budget we would like to see rapid progress towards sustainable funding of every Scottish-domiciled student. If that cannot be achieved in one leap, we look at least for complete reversal of the £750 per student real terms erosion in funding since 2014/15.
“The value of university research has never been more evident than during this pandemic. We need further progress towards research being funded at full cost, so that Scottish universities can continue the world-leading research and innovation that will build a sustainable recovery.”
Universities have been accused of lobbying the Scottish Government to allow a return of in-person teaching at the start of the academic year and the full return of students to campuses.
This was done with testing students for Covid-19 and major early outbreaks in student halls helped seed the beginning of the second wave of Covid-19 in Scotland.
In response, the Scottish Government criticised a “lack of clarity” from the UK Government over the future relationship with the EU and EU-related funding, stating it created “significant uncertainties” for universities.
They said: “We remain clear and consistent in our position that we expect full replacement of EU funds to ensure no detriment to Scotland’s finances, and we expect the UK Government to fully respect the devolution settlement in any future arrangement.
“We know our universities and colleges face significant challenges as a result of the pandemic and we are working closely with them to mitigate the effects of the crisis.
“The Scottish Funding Council works closely with institutions to monitor their financial health. We are grateful to Universities Scotland for their thoughts on the funding needs of the university sector. This will help inform our thinking in relation to the needs of the university sector as part of the 2021/22 Scottish budget.”