Chamber and committees

It is important to make it clear that the moneys that we are talking about for the Dunfermline learning campus in last year’s budget were additional—they were brought into the budget to support that project. However, I recognise your point about the concerns of individual institutions about their maintenance backlog. As you are aware, Mr Greer, the SFC has been doing a piece of work on mapping the situation across the whole country. We are in no way unalive—if that is the right word—to the problem. That is reflected in the work that we have done around asset disposal, which you will be aware of, to support institutions that have buildings that they are not currently using or do not need in the long term to dispose of them and to retain the bulk of the moneys for the purpose of improving their estate. That work has already been taken forward.

In anticipation of the report from the SFC—which will come in a few months, I suspect—and in conjunction with the Scottish Futures Trust, we have been looking at whether there are any innovative funding models to support the process. I realise that that is not about day-to-day maintenance, which we touched on earlier, but we are very much alive to the fact that there will have to be a response to the report, and we are looking into it. I cannot sit here today and say that we have found innovative solutions, but that work is on-going.

Yes and no, because the sector asked us directly to do that. It will be for the SFC and the sector to discuss how the money will be utilised, but we expect that it will be used in the context of the teaching grant. Bear in mind that, if those places were not filled, they would have been subject to clawback and the money would have come out. The money is being effectively guaranteed for the sector.

I said earlier that the SFC is able to assist institutions up to a point. When we are talking about universities, two things are at play, and one of them has not been picked up on.

First of all, there is the financial aspect: if multiple institutions were asking for bail-outs—as you have termed it—the Government would not be in a position to do that. The second thing for universities is their Office for National Statistics classification. We would have to be very careful about how we assisted them—we will call it assistance—so that it did not jeopardise their ONS classification. A bit of care needs to be exercised there.

On your underlying point about whether there is a wider problem, and whether what has happened at Dundee—not that we know what the exact circumstances are—is something that has happened elsewhere, I strongly suspect that, when the news broke, chairs of courts in other institutions said to their vice-chancellors, “Can we get assurance from our finance directors that we have nothing like that lurking?” Inevitably, that will have happened. The SFC’s conversations with Universities Scotland about the situation are on-going. It is a good point, and we want to be satisfied that whatever has happened at Dundee is not symptomatic of a problem in the sector.

As you are aware, other universities have taken proactive steps when they have got themselves into difficulty, particularly in relation to an overexposure to international students. They have sometimes taken painful steps to act. That gives me a degree of reassurance that, by and large, the universities are on the case. We will wait to see what comes out about Dundee.

How one would interpret that would be subjective. I say to Mr Marra that the SFC would want to satisfy itself that the plan was robust and that it got the university to a sustainable position. The part about sustainability is about ensuring that it is a vibrant and viable concern going forward. There might be short-term pain, but it will still be a thriving university.

I will not speculate on the detail around this, but all that I can say to the member is that the SFC has a track record of engaging appropriately with institutions. We find ourselves in a unique situation with the University of Dundee. I cannot sit here today and say, “The SFC will do X or Y”—that is not for me to say—but I know that it will approach the issue from the point of view of supporting the university’s recovery to a sustainable position, and of not doing or overseeing anything that would jeopardise that.

I will have to go back and look at the form of words that was used, because I certainly did not interpret it in that way.

We, as a Government, are not in the business of seeing institutions fail, but they need to become sustainable. That is their purpose, and it is in everyone’s interest that they are sustainable. A lot of the work that we have been doing through the tripartite groups and behind the scenes, working with the SFC and with institutions, is to get them to that place where they are more sustainable.

I go back to the earlier point about their growing their commercial income. We want thriving institutions that deliver the appropriate skills and qualifications in as many localities as possible. That is what we are in the business of doing.

I hope that what I said a few moments ago to Mr Greer indicates that we are on the case with that. Equally, I will not sit here today and say that we will be able to step in and assist colleges that have urgent RAAC issues, because we are not in a position to do that.

I would not use the word “unacceptable”, but I might use the word “unwise”, given what we have seen at some institutions, where an overdependence on a particular market—in that case, west Africa—has created difficulties. Self-evidently it is not the wisest position for a university to find itself in.

As you know, we have been mapping the scale of the issue with RAAC across the Scottish public sector, and the Scottish Government is not in a position to provide funds to address the issue across the public sector. You will remember that the previous UK Government had, at one point, indicated that it would rise to the challenge and provide the funding, but the funding never came. As a Government, we are not in a position to assist, and not just in relation to colleges.

I am glad that you raised that comment, because I read it and was slightly bemused by it. I will take a little time to explain why.

If the college sector is looking for clarity on the raft of asks that it has—historical asks and implicit asks—it is a fair point that we could clarify those in conversation with the colleges and consider the prioritisation of some of them. If that is what Shona Struthers means, I have some sympathy with her. However, if her comment is about the future direction of travel, I think that we have been clear with the colleges about what we are looking for. We are looking for better alignment with the needs of the local economies, where that is required—I stress those words—and improved interaction with employers, so that courses are better aligned with employers’ needs and therefore offer sustainable employment for students. We are also looking for colleges to be at the heart of skills planning, if they are not there already, and we want to exploit the potential for colleges to come together and become managing agents for a collective in certain disciplines of apprenticeship delivery.

Those issues have been discussed multiple times in multiple settings with the colleges. If the suggestion is that they are waiting for a steer from Government on how to operate in that regard, that flies in the face of what I see when I am out and about. I am a bit confused by that when I think about what Jackie Galbraith is doing at West Lothian College in a multitude of ways on employer engagement and innovative courses, about what Neil Cowie is doing at North East Scotland College, which is forging ahead and meeting the needs of the local economy and has great bilateral relationships with the two universities, or about what Dundee and Angus College is doing. In its written evidence to the committee, the Fraser of Allander Institute acknowledged that that work was going on but that it could be developed across the sector.

I make the point that I think that we have been clear. If we have not been clear, we will reiterate the position with the colleges. I have meetings with them in the next few weeks, at which I will take the opportunity to clarify matters in whatever way they feel is needed. However, my reading of the situation is that a number of colleges absolutely understand what they are doing and are getting on with it, so the challenge is to bring the sector into that space.

I am not aware of any discussions of potential mergers between colleges or universities, and merging institutions is not on our agenda. However, I am aware of—and encourage—the development of a more collaborative working approach between universities and colleges, not just in the sense of articulation. The University of the West of Scotland is a good example of that, as it is particularly active in that regard and has a close working relationship with Dumfries and Galloway College. Similarly, Queen Margaret University is doing some stuff in Fife and, as I mentioned earlier, NESCol is closely engaged with the two universities in Aberdeen. That is the kind of space in which we will see growth—in sensible, co-operative working rather than mergers.

If two colleges came to the SFC and said that they thought that it would be in their best interests to merge, and if they had a robust business case, the SFC would look to facilitate that—it did something similar with the University of the Highlands and Islands just last year. However, I am not aware that that is on the agenda.

The subject of shared services is interesting. We all hear talk about shared services being the way forward but, in my experience, those proposals rarely come to fruition, sometimes because of certain impediments. I am not entirely sighted on this, but a university said to me at the weekend that one impediment to having shared services is VAT—I will interrogate that a bit more to see what lies behind it.

It is obvious that having shared services would be a good way to go forward, but it does not happen often. Any institutions that are thinking about it are responsible for making progress on that but, if there were impediments that we could be part of helping to remove, we would look to accommodate that.