With half of all school leavers going to university, Scotland simply may have too many students

University education continues to be highly popular with youngsters. Last week UCAS published data showing that the number of applicants had increased across the UK by 1 per cent compared to the same point last year. A record number of UK 18-year-olds had applied for a university or college place by January 2025, at 323,360. For Scotland, the equivalent figure for 18-year-old applicants is up 4.3 per cent to 20,550.

Despite this demand, all is not well in the university sector. This paper reported last week on the communication sent to all staff at Edinburgh University by the principal, Peter Matheson, warning of an urgent gap in financial stability which could lead to programmes and schools being closed. Matheson told his staff that significant cost-cutting measures would be needed in the near future, and that nothing was off the table.

‘Perfect storm’

Edinburgh is not alone in facing severe financial pressures. Back in November, Dundee University revealed a potential deficit of £30 million. All institutions face rising staff costs, with Labour’s increase in employers’ National Insurance contributions hitting budgets hard. Furthermore, a projected decline in the number of international students, whose tuition fees are absolutely vital to the finances of Scottish institutions, is leading to what the Institute for Fiscal Studies has described as a “perfect storm”.

Against this backdrop, the SNP administration at Holyrood has not prioritised university and college funding in their Budget for the forthcoming year. With increases going to the NHS and welfare, the funding is simply not there to help fill the financial gap that Scottish universities now face. The matter is so serious that the prospect of a Scottish higher education institute becoming bankrupt is now a real one.

Inevitably, this situation has led to a reopening of the conversation around whether tuition fees should be introduced in Scotland. Tuition fees south of the Border provide a revenue stream to English universities which reduces their reliance on public funding, and enables bursary schemes to attract more students from disadvantaged backgrounds.

Despite the claims made by some of those who object to tuition fees, the reality is that English universities have had a better track record than their Scottish counterparts at widening access, precisely because of the more generous financial support that tuition fees allow them to offer.

No political support for tuition fees

Whatever the merits or demerits of tuition fees for the sector, the reality is that there is no political support for their reintroduction here. No political party in Scotland is proposing introducing tuition fees, and that’s unlikely to change in advance of the next Holyrood election.

The rejection of tuition fees means a cap on the number of places available to Scottish-domiciled students exists, so some talented Scottish youngsters cannot find places at Scottish institutions, and then seek places at universities elsewhere in the UK. These students find themselves paying fees, giving the lie to the claim from the SNP that all Scottish students get free tuition.

Matheson has suggested a potential reform to the current system, to charge tuition fees to Scottish-domiciled students who were unsuccessful in getting a place at his institution because of the numbers cap, but who could take up places on payment of fees equivalent to those paid by students from outside Scotland.

It would leave no Scottish student any worse off than they currently are, but would mean that some currently having to travel to institutions further afield would at least be able to stay and study in Scotland.

A third way

Whilst an interesting idea, it was not one that attracted widespread support within the sector, or from political parties, but it does at least show there are those within academia trying to find solutions to what is an increasingly serious problem.

If more public funding and tuition fees are both off the table, is there any alternative that can be found to try and address the problem? There is indeed a third way, although it might be as unpalatable to the sector as the other solutions proposed.

We do need a broader discussion around the provision of post-school skills and education in Scotland. We currently send around half of all school leavers to university, a historically high level, much greater than it was just a generation ago.

These individuals benefit from a degree, the ability to increase earnings in the workplace over time, and the life experience of attending a higher education institution.

But, at the same time, we have industries crying out for recruits, and trades in sectors such as construction which simply cannot attract the apprentices to provide the workforce of tomorrow. There is clearly a mismatch between the needs of our future economy, and the education and training currently being offered.

No choice

If we cannot afford to support universities through general taxation and are not prepared to let them charge tuition fees, we may have no option but to fundamentally reconsider what, and for whom, they are there for.

For example, do we still need four-year degrees, rather than three years, as is the norm for England? Moving to a three-year model would certainly reduce costs for students, but with so many universities reliant upon fee income from international students, which would fall by 25 per cent with the loss of an additional year’s education, the financial consequences of such a move might turn out to be negative.

This, and other options, are certainly worthy of further consideration. The status quo is simply not tenable, and if we want to see our universities both survive and thrive, we will have to think the unthinkable.

Murdo Fraser is a Scottish Conservative MSP for Mid-Scotland and Fife