Scottish higher education needs strategic rethink, says Glasgow University chief

Sir Anton Muscatelli, Glasgow University’s principal for 16 years, has called for a major review of the funding and shape of Scottish higher education, warning against “stumbling from year to year” without a plan. In comments to the BBC as he prepares to retire this month, Muscatelli said Scotland must decide what it wants from its universities and how to pay for it, arguing that continuing to rely on a routine funding cycle risks compromising the sector’s ability to teach and to conduct research. He emphasized that any reform would need to be aligned with what Scotland aims to achieve economically and socially, not tied to an assumption that existing funding paths will suffice. He also suggested that tuition fees for Scottish students are unlikely to gain political support at Holyrood, making a sector-wide rethink even more imperative.

Muscatelli’s call comes ahead of two crucial Scottish Funding Council (SFC) reports due on Friday that will examine the financial health of universities and further education (FE) colleges. Both studies have been delayed from earlier in the year, and the figures will cover the latest data up to June. BBC analysis accompanying the reports shows that real-terms funding for Scotland’s universities and FE colleges has been squeezed by about a fifth over the past six years. FE colleges say they are turning away qualified applicants and that apprenticeship courses are oversubscribed, while universities report limits on the number of places they can offer to Scottish students. In recent years, some institutions have tried to bolster finances by recruiting more foreign students, but those numbers have begun to retreat as global competition and policy changes bite.

The funding model for Scottish higher education remains under sustained pressure. In Scotland, students who live in Scotland do not pay tuition, and universities receive government funding for a fixed number of Scottish-domiciled students each year. However, many universities argue that the amount they receive does not cover their costs and is substantially less than the £9,500 annual tuition charged to students from the rest of the UK. Foreign students tend to pay higher fees, which has long helped subsidize teaching and research; those numbers, though, have fallen back as immigration rules and international competition tighten.

A new study by David Bell, a professor of economics at Stirling University and a public-finance expert, was prepared for the Royal Society of Edinburgh and obtained by the BBC. It shows that funding per Scottish university student has fallen in real terms by about 22% between 2019-20 and 2023-24. Bell’s analysis also highlights gaps between the official funding universities report needing and what they actually receive, with particular shortfalls in several disciplines. For example, a modern languages student receives about £7,421 in funding per year, roughly half of what Bell’s study says is required to cover costs. In dentistry, the government funded about £19,580 per student last year, a sum Bell says is at least £9,000 short of cost. In several other fields, including veterinary studies, law, social work, media studies, drama, architecture, planning, anatomy, chemistry, mineral engineering, philosophy and religion, Bell argues the funding would need to rise by at least 70% to match costs.

The report also notes that universities’ research funding and related overheads do not fully cover the costs of maintaining labs, facilities and other infrastructure. This has left some institutions more exposed to shifts in international student demand and other revenue streams. The share of overseas students in Scotland’s universities has fluctuated in recent years, peaking around 2022-23 before retreating. Institutions with larger postgraduate taught-programme cohorts rely more heavily on non-UK students, making them particularly sensitive to policy changes and visa rules.

The mix of students varies by institution. In newer universities, the Scottish share of undergraduate places tends to be smaller than in older universities, while some universities with stronger international recruitment see a higher proportion of non-UK students. At the new academic year, UK-wide tuition for non-Scottish students stands at £9,535, up 3.1% from last year, a rate that universities say has not kept pace with rising costs for more than a decade. Although no political coalition has signaled an end to free tuition for Scottish students, ministers have shown little appetite for fully funding the sector’s costs through public money alone, prompting calls for structural reform.

Researchers’ earnings after graduation illustrate another complex dynamic. Bell’s study uses the 2021-22 tax year to show wide variation in earnings five years after graduation, reflecting subject choice and institution. In some fields, such as health and STEM, graduates tend to earn more than the Scottish average, while arts degrees often yield lower earnings. The earnings picture underscores the long-run consequences of funding choices on student outcomes and the broader economy.

Muscatelli argues that funding is currently allocated mainly on the basis of prior-year allocations, leaving little room for innovation or timely responses to changing needs. He also pressed for greater differentiation among universities, suggesting that sharing resources and even pursuing mergers could improve efficiency and resilience. The Glasgow University principal said a strategic plan for the sector should be developed in a rational, publicly funded framework, and that a national review of the sector’s shape and size would be appropriate after 2026. “We need a strategic plan as a country,” he said, adding, “which is why I suspect after 2026, there will need to be a look at the shape and size of the Scottish [university] sector. I hope this is done in a rational way.”

With the Holyrood election approaching, policymakers face a stark question: what should Scotland’s higher education system look like, and how should it be funded if free tuition for Scottish students remains intact? Muscatelli’s caveat is that any plan must be anchored in evidence and designed to support the country’s broader economic goals. He cautioned against piecemeal fixes that “stumble from year to year” and urged a forward-looking framework that contemplates the post-2026 landscape and the long-run needs of the Scottish economy.

In recent years, the sector has faced notable upheaval. Dundee University weathered a severe financial crisis earlier this year and required a government bailout of more than £40 million. A report into the near-collapse criticized spending patterns and governance failures, prompting senior resignations. Meanwhile, Edinburgh University has announced large-scale efficiency measures, including plans to cut about £140 million and to reduce staff, with strikes by academic staff highlighting the pressures felt across campuses. These episodes illustrate why many observers view a comprehensive strategic review as urgent rather than optional.

Muscatelli’s call aligns with broader concerns about how Scotland funds higher education in a period of constrained public finances and shifting international student flows. The SFC reports are expected to outline the scale of the funding gap and to test proposals for potential reforms, including new funding models, improved efficiency, and deeper collaboration among institutions. For now, ministers have signaled willingness to discuss reforms, but any changes will require political consensus and public support for a plan that may involve difficult trade-offs for universities, staff, and students alike.

Ultimately, the discussion centers on how Scotland can preserve high-quality teaching and research while ensuring affordability and value for money. Muscatelli’s retirement marks the end of a long leadership era at Glasgow University, but his call for a strategic, evidence-based restructuring of the sector is likely to outlive his tenure. As Scotland prepares for the next round of political and policy decisions, the country’s universities face a defining moment: chart a course for a sustainable, high-quality higher education system that serves Scotland’s ambitions today and long into the future.