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The Scottish Funding Council (SFC) has today (4 January 2024) published two reports that provide an aggregate picture of the financial health of Scotland’s colleges and universities respectively. Based on their annual accounts for academic years 2020-21 and 2021-22 and latest forecasts up to 2025-26 for colleges and 2024-25 for universities, the reports provide detailed information at sector level on the operating position, cash balances, sources of income, expenditure, liquidity, cash flow, borrowing and capital expenditure.

Both colleges and universities continue to operate in an extremely tight fiscal environment. While neither sector is homogenous, and the forecasts represent a snapshot in time, both sectors face similar risks to their financial health, including:

  • The uncertain macro-economic outlook.
  • Increasing staff costs.
  • Rising energy costs.
  • Unanticipated public spending cuts.
  • The requirement to invest in the achievement of public sector net zero targets.
  • The impact of RAAC.

SFC will continue to monitor and assess the financial health (sustainability and viability) of colleges and universities through regular engagement and analysis of financial returns.

Commenting on the reports, SFC Chief Executive, Karen Watt said:

“While these reports represent a snapshot in time, we recognise that colleges and universities are operating in an extremely tight fiscal environment. We will increase levels of engagement and monitoring activity for those institutions facing risks to their financial health and work with them to understand and assess plans to bring them back to a sustainable position.”