Almost two thirds of Scottish universities in the red, accounts reveal
Nearly two thirds of Scotland’s universities recorded a financial deficit last year, according to an analysis of their accounts.
Nine of the nation’s 15 universities finished 2017-18 in the red, posting a combined deficit of £48.7m before tax, almost double the level of the year before.
The statistics, compiled by higher education news service Research Professional, show that Robert Gordon University (RGU) in Aberdeen reported the biggest deficit, at £11.1m.
It was followed by the University of Dundee, which posted a deficit of £8.1m, and Glasgow Caledonian University (GCU), which finished the year £7.7m in the red.
Six other Scottish institutions made losses in 2017-18, including Edinburgh‘s Queen Margaret and Napier Universities, which posted deficits of £5.4m and £4.6m respectively.
The sector overall finished £96.4m in the black, thanks to large surpluses at institutions such as the Universities of Edinburgh and Glasgow, which posted figures of £69.9m and £31.9m respectively.
However, statistics published last year by the Higher Education Statistics Agency (HESA) suggest that the finances of Scottish universities are less healthy than they were in 2016-17.
Their combined deficit that year stood at just £25m, almost half the current figure, while the sector’s overall surplus was £197m, around £100m higher than in 2017-18.
A spokesman for HESA said it was due to publish its 2017-18 figures later this month, but that the accounts information reported by universities should be comparable to last year’s data.
Universities Scotland said it was the third year in a row that half of the nation’s universities had finished in deficit and called for ministers to take action.
“There is a clear pattern emerging at the sector level where the gradual erosion of Scottish Government funding is really starting to make itself felt,” a spokeswoman said.
“Every undergraduate student place that the Scottish Government provides is underfunded, and funding for university research does not cover its full cost.
“Universities need to see a steady climb to sustainable levels of investment in their teaching, research and capital grants if they are to maintain their global competitiveness.”
RGU said its deficit was mainly driven by the “exceptional costs” of terminating long-term debt, changes to pension contributions and financial adjustments.
“The underlying result for the year is a deficit of £2.3m,” a spokesman added.
“The university has a strong, liquid balance sheet and this strength will ensure that it can continue to deliver on its ambitious plans in teaching excellence and impactful research.”
The University of Dundee cited a fall in core funding from the Scottish Funding Council, as well as “increasing compliance costs, pension cost pressures and uncertainty in relation to Brexit”.
A spokesman added: “We have already recorded a significant increase in tuition fee income and have set out ways of improving our ability to invest in areas of strength.”
GCU said its deficit included a “significant non-cash charge of £4.1m for staff pensions”.
“Such charges are being experienced in organisations across the country as the valuation of pension liabilities is being adversely affected by the current low interest rates in the UK,” a spokeswoman added.
Higher education minister Richard Lochhead said: “We have invested over £1bn in our universities every year since 2012-13. This will continue for 2019-20, supporting our institutions to remain attractive, competitive and truly excellent in global terms.”
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