The next Scottish government should “waste no time” in launching a review into how the nation’s post-16 education system is funded, a former vice-chancellor has said. 

Anton Muscatelli, who retired as principal of the University of Glasgow earlier this year, has said the upcoming Holyrood election will provide an opportunity “to address the fundamental challenges” facing the higher education sector.

While universities across Britain are experiencing financial challenges, the outlook in Scotland is particularly bleak, with institutions forecasting a collective £12.9 million deficit in 2025-26.

Discussions between Scotland’s political parties and the nation’s universities about the future of the funding system have already begun, but the 2026 election is likely to prevent any decisions being made as politicians’ focus turns to campaigning. 

ߣߣ��Ƶ

While it is “important that the issues facing tertiary education in Scotland are discussed frankly and openly” ahead of the election, Muscatelli said it is for those “who will form the next Scottish government to grasp the thistle and navigate us to a sustainable solution”. 

Writing in a report on the Royal Society of Edinburgh’s (RSE) tertiary funding conference published on 9 December, Muscatelli, who is also president of the RSE, said: “For the sake of Scotland’s colleges and universities, the new government should waste no time in commissioning an independent review, with the starting point being what the shape and size of the sector in Scotland should be.

ߣߣ��Ƶ

“This review should also recognise the important UK-wide linkages, especially, but not exclusively, in research and innovation.”

The RSE conference, which took place in May 2025, convened experts from Scotland, the rest of the UK and elsewhere to discuss the growing concerns about the sustainability of the existing funding model. 

Co-chairs Andrew Cubie and Alice Brown said it was “extremely positive that work setting out the nature of the issues to be addressed can begin and that any incoming government will have the benefit of the outcome of the [cross-party discussions] to assist their deliberations post-election”.

Writing in the same report, Alison Wolf, a peer in the House of Lords and professor at King’s College London, said Scottish universities were subject to cost pressures engendered by Baumol’s disease – the theory that salary costs tend to rise in service industries with stagnant productivity, because productivity is rising in other parts of the economy.

ߣߣ��Ƶ

For universities, “if we want to maintain the same quality we actually have to pay more, even though [academics’] ‘productivity’ isn’t changing, and it takes just as long to give good individual feedback on a dissertation as it did 20, 40, 60 years ago,” Wolf says in the report.

Wolf also discusses the impact of international student recruitment on political incentives, with rising numbers of foreign students reducing the pressure on governments to “maintain core funding levels”. 

These students can also be destabilising within universities, she adds,

“Activity and influence shift to central marketing teams; leaders are occupied with external programmes; disciplines which can recruit easily, require little costly infrastructure, and are not tied into national professional standards and requirements expand at a much faster rate than others.”

ߣߣ��Ƶ

Wolf urged Scottish policymakers to think “more seriously about how international students affect the tertiary system as a whole, rather than simply treating their arrival as a way to relieve cost pressures”.

helen.packer@timeshighereducation.com