Reform urgently needed as university sector finances just don’t add up - Susan Dalgety

The University of Edinburgh’s running costs are £100 million a month – or £1.2 billion a year

In it, Sir Peter Mathieson, principal of Edinburgh University, warned of pending spending cuts. He said: “...our expenditure is rising at a faster rate than our income. This is an unsustainable trend.”

He revealed the university’s running costs were £100 million a month – or £1.2 billion a year - an astonishing figure, given that the city council’s entire budget for educating our children is only £350m a year. Cuts in “all areas” are likely, warned Mathieson while acknowledging that the university is sitting on reserves of more than £2.6bn – which is about the same amount of cash that a poor country like Malawi has each year to provide all its public services for 20 million people, including five public universities.

Sir Peter blames both the Scottish and the UK governments for the university’s financial woes. Holyrood because it fails to cover the full cost of teaching Scottish students, and Westminster because it’s new immigration rules means that fewer international students want to come to the UK.

But does the university itself – and Sir Peter Mathieson – need to shoulder some of the blame? He admitted that, in the last year alone, there were an additional 750 full-time jobs created at the university, which suggests a rather cavalier approach to financial management. And there are 343 university employees who earn more than £100,000 a year. Sir Peter’s annual package is worth £418,000, and he lives rent-free in a Regent Terrace town house.

Edinburgh is not the only university struggling to make ends meet. Every one of Scotland’s 15 universities has a similar tale to tell which begs the question, do we have too many universities for a country with only 5.4 million people? Should some merge?

And do students really need four years of study to graduate, with another added on if they want a Masters? Students in England manage fine with a three-year degree course, as do other European countries like Italy and France, while Germany offers a mix, depending on the subject. Surely there are huge savings to be made if Scotland were to adopt a similar system to that south of the border. And think of the savings to families if Emily or Jack only had to spend three years to get their 2.1 degree in management studies.

Don’t get me wrong, I understand the important role universities play in our economic, social and cultural life. Edinburgh University’s research work is as important as its teaching – arguably more. Over the centuries, it has pioneered some of the world’s most important medical breakthroughs. It is a leading centre for computing, in particular the development of artificial intelligence. And it is the alma mater of some of history’s greatest thinkers. Higher education is expensive, but it is an essential investment if a country is to flourish.

But costs are now clearly out of control, and simply saving a few pounds here and there on the stationery budget is not going to fix the problem. We need a root and branch reform of the sector before it is collapses in debt and chaos.