Edinburgh University launches voluntary redundancy scheme as principal issues 'unsettling' statement

The university on Monday said it was opening a voluntary redundancy scheme and compulsory redundancies may be necessary “if unavoidable”.

Principal Sir Peter Mathieson said the sector was dealing with challenges around international student recruitment – a key source of income – along with increasing staff costs and an underfunding of places for Scottish and UK students. He acknowledged the announcement would be “unsettling” for staff.

The announcement comes after The Scotsman revealed last week that Sir Peter - already the highest paid vice chancellor in Scotland, earning a basic pay in 2023 of £348,000, and a total package worth £418,000 - was set to receive a 5 per cent increase in his pay.

Sir Peter said the university would be taking “a series of actions” to address significant financial pressures, as well as the confirmed increase to employers’ National Insurance contributions.

Earlier this month, Dundee University warned cuts to staffing levels were “inevitable” as a result of a projected deficit of up to £30 million. Meanwhile, Robert Gordon University in Aberdeen has also recently told staff it plans to make a further 135 redundancies to ensure its long-term “viability”.

Issuing a statement on Monday, Sir Peter said: “The university costs £120m each month to run.

“In the context of the recent sector challenges around international student recruitment, increasing staff costs since the pandemic, and the unsustainable levels of funding for Scottish and other UK students, our outgoings are consistently higher than our income.

“In response to this situation and recent developments with regards to National Insurance, we have concluded that we need to take a series of actions, which will include selective voluntary and, if unavoidable, compulsory redundancies.

“We will be offering staff the opportunity to find out more through a variety of online and in-person meetings, and we will continue to work with our unions and managers to help colleagues through these changes.

“I don’t underestimate how unsettling this news will be. However, it is important that I am honest about the scale of the challenge we have and transparent about the actions we need to take to address it.”

The SNP challenged the UK government to fully fund its National Insurance hike on Scottish universities, as the Edinburgh University cuts were blamed tax rise.

SNP MSP Michelle Thomson said: “Firstly, my thoughts are with staff at the University of Edinburgh who are facing redundancy at this time, due to Labour’s backdoor tax hikes.

“We’ve known for some time now the destructive potential of Labour’s National Insurance hikes, with Universities Scotland warning of a £45m bill if the cost of this policy was not met by the UK government.

“The impact won't just be felt by Scotland's Universities either - Labour's NI tax hike could cost the Scottish Government £500m, and Scotland's voluntary sector £75m.

“Today’s announcement from the University of Edinburgh is the tip of the iceberg as the impact of Labour's budget becomes clear.”

GPs, care homes and hospices in Scotland have separately warned of the threat of closures due to the impact of the National Insurance contribution increase.

Mary Senior, Scotland official at the UCU union, said: “This will be a deeply worrying time for staff at the University of Edinburgh who be worried about their jobs in the run up to Christmas and the New Year.

“As well as staff, this news today will also be concerning to students at the university who’ll be concerned for the staff who teach them, but also for their future studies and their courses.

“Coming on the back of cuts announced in the summer, it's imperative the university takes every step possible to retain jobs and to avoid compulsory redundancies. UCU will fight to defend every job."

Sir Peter previously wrote to Edinburgh University staff this summer outlining the “severity of the financial challenge” in the higher educations sector.

He said Edinburgh was “not immune” to the pressures, but was taking action to respond, including “reducing our spending in all areas” and implementing “significant constraint” on recruitment.

The 5 per cent increase on Sir Peter’s basic pay from the previous year would represent £17,400, while his pension supplement would also increase, taking the total uplift to around £20,000.

The rise follows a 3 per cent increase in the previous year, although Sir Peter refused any extra pay in 2019, 2020 and 2022.

The principal has also recently been in the headlines for having the cost of his Regent Terrace home and utility bills covered by the university, and for regularly staying in five-star hotels while on overseas trips.

A UK government spokesperson said: “With public services crumbling across the UK, including Scotland, and an inherited £22 billion fiscal black hole from the previous government, we had to make difficult choices to fix the foundations of the country and restore desperately needed economic stability.

“Higher education is devolved to the Scottish Government and it will receive additional funding on top of its record £47.7bn settlement to support with costs associated with changes to Employer National Insurance.”