Financial troubles cast doubt over future of 500-year-old Scottish university

Doubt has been cast on the future of one of Scotland’s ancient universities as it faces difficult financial conditions.

The University of Aberdeen said it will “survive and thrive” despite annual accounts detailing “significant doubt” over the institution’s financial future.

The newly-released financial report cited “external uncertainties” may not allow the university to deliver its financial recovery plan in full.

Rising costs in the higher education sector, reports of falling international student numbers and a cut in Scottish Government funding all contributed to creating a “material uncertainty”.

The Institute of Fiscal Studies said universities in Scotland have been impacted by a fall of 19% over a decade in the value of funding from Holyrood.

Other factors including political, economic, and social developments “beyond” the university’s control were also taken into account, the report said.

The report states: “The University Court has assessed a number of factors as set out within the note and has concluded that the financial statements are prepared on a going concern basis, on the assumption that the functions of the University will continue for the foreseeable future, while recognising that a material uncertainty exists within the going concern assessment.”

The university said “a firm financial footing for the future” had been established after costs were cut by £18.5m as part of a recovery plan.

A University of Aberdeen spokesperson said: “The annual report which we began drafting some months ago, set out the potential risk, if the University of Aberdeen had not taken swift highly effective action to address financial challenges.

“The University has now reduced costs by a hefty £18.5m and is consequently on a firm financial footing for the future.

“Our financial situation has radically changed because of early retirement, voluntary severance, and operational efficiencies, as well as a major drive to grow and diversify our income.

“The higher education sector has been impacted by the UK Government’s stance on migration, which Universities UK links to the fall of 44% in recruitment of international students at over 70 universities in the 12 months to January this year – with a consequent dramatic fall in income from fees.

“The Institute of Fiscal Studies highlights that Scottish Universities are also impacted by a fall of 19% over a decade in the value of Scottish Government funding.

“The University of Aberdeen has been around for over 500 years.

“We are very confident that with continued agile, effective action we will survive and thrive, whatever the challenges facing the higher education sector.”

A Scottish Government spokesperson said: “Our universities play a pivotal role in Scotland’s economy and society – and despite facing the most challenging budget since devolution, the Scottish Government will invest over £1bn on teaching and research, including an increase in funding for research and innovation.

“This will ensure our universities continue to play a pivotal role in Scotland’s economic growth.”