Chamber and committees

Do you anticipate that that figure will change so that we see more fiscal drag—or will that go? I understand the situation with the top and bottom rates, but the rates in the middle are where the bulk of the tax increase revenue comes from.

I would appreciate that. It goes back to the convener’s point about the fact that there has been no increase in the amount of student resource for many years. The Institute for Fiscal Studies has said that that has resulted in a 22 per cent real-terms reduction in the amount of funding that is available to our universities. Last week, I was at the Education, Children and Young People Committee to ask questions about the situation at the University of Dundee, with which you will be very familiar. The Minister for Higher and Further Education; and Minister for Veterans refused to recognise that figure. Do you recognise that figure of a 22 per cent real-terms reduction?

I appreciate that. The working on that is pretty simple. It involves taking the amount of inflation over the recent period and setting that against the cash allocation. It seems to me that the figure is entirely robust. I take your point about Dundee—there have been failures in management and leadership there in different ways. However, when you described the situation in answer to the convener, you said that the “main headwinds” are not about Scottish Government funding. I would contend that, given that 22 per cent real-terms reduction, that simply is not the case.

I suppose that it relates to my issue about the health of the sector and Dundee being part of the equation. However, if you look at Robert Gordon University, the University of Aberdeen, the University of Edinburgh, the University of St Andrews and the University of the West of Scotland, there have been headlines across the sector in recent days, and the universities’ leaders are clear that the underlying issue is the 22 per cent real-terms reduction from the Scottish Government. That enforces the business model, which means that they will be exposed to fluctuations in international recruitment in the longer term. In the short term, we are talking about £12 million, £14 million, and so on, and they are small numbers in comparison with the size of the overall budget. What is your vision of how we can get a sustainable sector that can pay for itself in the longer term?

I take your point that the international students figures are a significant issue, but the most recent decrease in international recruitment is partly about two devaluations of the Nigerian currency, and the UK Government can do nothing about that. The Scottish Government, however, can do something about the exposure of our universities to a volatile international recruitment situation.

I thank everybody for the conversation today. It has been very useful for understanding the breadth of the issues that universities are facing, particularly my home university in Dundee.

Will there be a report? Maurice Golden referenced a report. I have heard that there will be a recovery plan. Will a report that details what has happened be published? Who will it be published for, where will it be published, and who will have access to scrutinise it?

I appreciate that. Your comments are useful.

I was heartened by your response to the previous set of questions, in which you said that the university will recover. I note from The Courier this morning that you were asked on several occasions whether the university was, in essence, too big to fail. Let me say that it is too big to fail. One in seven of Dundee’s population are students at that institution, and there are 3,000 members of staff. The university has a critical relationship with the NHS, whether that be joint contracts for the provision of oncology services or in all manner of other areas, such as the training areas that have been pointed out.

The university cannot be allowed to fail and, although it is an independent institution, that is a responsibility of Government. I see that the cabinet secretary is nodding at that point; it would be good to have her agreement on the record. Do you agree that the university is too big to fail, cabinet secretary?

Can I push you on one point, then, minister? When the Scottish Funding Council, as you have said, looks at and evaluates the recovery plan, the pain that you have referred to will, without a doubt, be felt by employees. After all, that is who we are talking about—we are talking about job losses as a result of this. If those job losses are, frankly, too high, because of the immediacy of the problem that I have described, what can the SFC do to assist in the short term and to make sure that there is a recovery plan that is more sustainable and which can win the confidence of staff? By that I mean some form of bridging loan or financial accommodation that can give them support to allow for a more acceptable situation. None of what has been described by other colleagues is, I think, acceptable to staff, but that would be real action from the SFC if it could look at the situation and evaluate it in the context of what it can then do.

Thank you.

That is critical, and I welcome that response from the minister.

Earlier, John Mason mentioned that reserves in Dundee university are at £160 million. The year-end position of July 2024 was £34 million in reserves. That had gone down by more than £30 million in-year. There is also an in-year cash flow deficit of £30 million. There is no reserve position to maintain a viable institution, even in the short term. That is the context of the recovery plan in which the management is operating. It is important to put on the record the most recent set of accounts, because that is the scale of the challenge that is in front of the university.

We have usefully covered income in the discussion today. However, my reading is that it is a question of expenditure, which has increased dramatically. The previous figure of £160 million that John Mason quoted was accurate at one point, but there was a rapid diminution in the level of reserves as cash went out the door. In relation to the financial position, is it the minister’s understanding that, as well as the income situation—which he has already covered in some detail—expenditure is also a significant part of the equation?