21 Acknowledged

Scottish Funding Council (SFC) grants made up the second highest income source in 2017–18.

Conclusion
Scottish Funding Council (SFC) grants made up the second highest income source in 2017–18. This has also remained the case in subsequent years.35 Karen Watt, Chief Executive of the Scottish Funding Council, told us that although Scottish Funding Council funding represents about 30% of the whole sector’s total income, reliance on their funding varies very much below the surface.36 To illustrate this point she informed us that: [ … ] the University of the Highlands and Islands [ … ] relies quite heavily on [SFC] funding—69% of its funds come from the Scottish Funding Council—whereas the University of St Andrews has a very low reliance, at 15% of total funds.37
Government Response Summary
The government states that higher education in Scotland is largely devolved and highlights its ongoing engagement with the Scottish Government, as well as its International Education Strategy which aims to help universities diversify student recruitment and funding sources.
Government Response
Acknowledged
HM Government Acknowledged
Higher Education in Scotland is, for the most part, a devolved responsibility. We recognise that the whole of the UK benefits from stability across Higher Education. We appreciate the importance of continuing to work closely with the Scottish Government as we recover from the COVID pandemic. There has been and continues to be engagement at ministerial and official level with the Scottish Government (and the other devolved administrations) to exchange information and policy developments across a range of issues facing education systems in the UK. Furthermore, the UK Government has been working tirelessly to support businesses and the economy in Scotland including our universities. International students bring fresh ideas and new perspectives and in doing so help challenge thinking, making for an enriching learning environment for all students, including those from the UK. For our young people, this cultural exchange helps build life-long friendships, as well as laying the foundation for future networks, and important business, political and diplomatic bridges. International students also help stimulate demand for courses, add to the UK’s impressive research capacity and have the potential to contribute invaluably to the UK skills base—particularly in key subjects where they benefit the UK economy by filling a number of sectoral skills shortages, for example engineering, technology, health and social work. Universities are aware of the possible risks associated with dependence on a single source of funding, whether that is from a single organisation or from a single nation. Ensuring student recruitment is from a diversified base, in order for growth to remain sustainable in the longer term remains a key strategic priority—our commitment to this is set out clearly in the International Education Strategy. As part of this strategy, which was launched last year and will be updated this year, we also announced the Graduate Route, among several other measures to attract new international students. The UK Government’s International Education Strategy and recent update make clear that the internationalisation of our higher education sector cannot come at any cost – universities must ensure they have appropriate processes in place to manage risk.
Addressee Bodies
Scotland Office
Timeline
Recommendation age 5.2 yrs
Report published 28 May 2021