Exclusive:Staff question 'perverse' scale of Edinburgh University's £140m cuts amid fears it risks 'death spiral'

Three senior staff members told The Scotsman they believed the university’s move to reduce spending by £140 million is “unprecedented”, even in a period of severe cutbacks across the UK’s higher education sector.

Sir Peter Mathieson, the university’s principal, recently revealed “nothing is off the table” to try to repair its finances, including job cuts and the closure of schools.

He said the £140m gap that needed to be closed over the next 18 months was about 10 per cent of the institution’s annual turnover, which the principal said was “a similar percentage to that of many other universities”.

But the academics, speaking anonymously, disputed this claim.

They pointed to a “healthy” £84m EBITDA (earnings before interest, taxes, depreciation, and amortisation) in the university’s 2023/24 accounts, student tuition growth of 2.6 per cent, and “one of the largest endowments in the country, with £3 billion in net assets”.

The staff said: “The University of Edinburgh now finds itself in the perverse situation of being among the most financially secure universities in the UK, while pursuing the most extensive cuts.

“Other universities that have recently featured in the media, including Cardiff University, York University and Durham University, currently have an operating deficit.

“This is not the case at Edinburgh, where the proposed cuts are instead justified by forecasts of potential future shortfalls, with no transparency over the models and assumptions on which those predictions are based.”

They added: “The scale of the proposed cuts at Edinburgh, roughly 10 per cent of annual turnover or £140m, far outstrips those announced by other cash-strapped universities.

“Durham’s proposed cuts of £20m are just under 4 per cent of their annual income. York’s recent cuts of £34m, which comprise 6.4 per cent of income, and are the closest comparator, do not even come close to the planned reduction in expenditure at Edinburgh.

“No other UK university has proposed cuts this drastic and no other university reported in the media for making cuts has been in operating surplus.”

Management was accused of treating the university “like any business selling a range of more or less profitable products”, while “cookie-cutter measures such as the centralisation of support services risk sending the university into a death spiral of administrative chaos, lowered research and teaching quality and reputational damage, as seen at other universities”.

The staff added: “Under the cover of the HE sector’s very real funding crisis, a new set of financial management tools and logics are being ushered in that threaten to completely reimagine what the university is, reducing the everyday work of teaching students and conducting ground-breaking research to ‘generating cash surplus’.

“The imagined ‘deficit’ at the University of Edinburgh is a false crisis, built on the real crisis of an underfunded higher education sector.”

While Edinburgh University’s 2023/24 accounts were healthier than many others, its surplus before other gains and losses, and prior to pension-related changes, fell from £104m in the preceding year to £25m. Its EBITDA dropped from £148m to £84m.

Sir Peter, the university’s principal, defended the savings programme last night.

“We appreciate many of the concerns raised by colleagues, students and others in our community, and we are making every effort to listen,” he said.

“However, we have been very clear that our current financial position is not sustainable and we are not immune to the challenges that the higher education sector is currently facing.

“Like other universities, we need to ensure that we remain strongly placed for the future, so that we can continue to attract the brightest minds from within Scotland, the UK and across the world, and remain a world leader in research.

“While we are not currently in deficit, we must take clear and decisive action now to avoid this.

“Unless we reduce our costs, the university currently forecasts a close to break-even position for the 2024/25 financial year, and from the 2025/26 financial year, we forecast to be in a deficit position where our expenditure exceeds our income. This amount is based on financial modelling of past results, current enrolments and estimates for the coming years.”