International fees could overtake public funding for universities, MSPs told

Scotland’s universities are beginning to see a “crossover” in public funding and a reliance on international fees, MSPs have heard.

Holyrood’s Education, Children and Young People Committee took evidence on Wednesday as forecasts suggest revenue generated from international students could soon overtake funding from the Scottish Government.

Karen Watt, chief executive of the Scottish Funding Council (SFC), said there has been a “significant increase” in the number of international students coming to study at Scottish universities.

Fees paid by these students are an “integral part of most universities”, she told the committee.

Ms Watt added: “What we are seeing in terms of finances and budgets, we have seen a steady increase in the amount of income being generated from international students.

“That varies very much across the sector. Some institutions, some universities are more reliant on SFC funds than on international fees.

“But we’re getting to a point clearly where there’s a crossover in the amount of public funding that we put in for learning and teaching, and the model in some universities that are becoming more reliant on international fees.”

Professor George Boyne, principal at University of Aberdeen, gave evidence to the committee as a representative of Universities Scotland.

Prof Boyne pointed out that funding per undergraduate student has gone down by “almost £2,500 in real terms since 2014”.

“Our research income has also gone down in real terms, or research funding, and therefore we’re compensating for that through the fees paid by international students,” he said.

But he told MSPs that this has been the case “for some time”, and said this happens in other education systems.

He highlighted that institutions in England use a similar model, adding: “For some time, international student fees have cross-subsidised research.

“The difference in Scotland is the international student fees are cross-subsidising not only research, but also undergraduate education.

“So that puts us under greater financial pressure.”

Ms Watt added that institutions need to consider how “exposed” they are to particular international markets, and should consider diversification strategies where required.

“It is something that we are tracking as well,” she said, “because clearly, there’s some volatilities in the wider international environment.

“What we are seeing is a number of institutions looking at where they have particular concentrations in particular countries, and they are, as we understand it, diversifying into a range of other countries as well.”