Report warns of economic downturn's impact on Scotland's universities

THE economic downturn is having a "significant impact" on universities' funding, an official report warned today.

The Scottish Funding Council (SFC) also says higher institutions face an uncertain financial future at a time of soaring applications from budding students.

Opposition parties have now stepped up calls for a independent review of the sector.

But the Scottish Government points out that money for universities has been going up, with thousands more places available this year.

The SFC report states: "There is evidence that the recent downturn in economic conditions is impacting significantly on the university sector and, looking ahead, the financial prospects are less certain."

The document, dated last month, adds: "The challenge is, therefore, for institutions to maintain financial and institutional sustainability in light of the economic downturn."

The SFC is also to holds talks with the Government about greater detail on future funding, according to the report released by Labour today.

A previous SFC report last May indicated that Government funding will be "squeezed" as a result of the recession.

Labour's higher education spokeswoman Claire Baker today repeated calls for an independent review to find a "long-term solution" to the situation.

Mrs Baker said: "This report makes it clear that the SNP's current approach to universities is unsustainable.

"It does not allay fears that universities will get cuts to funding, find difficulties in generating income and that the current pressures we are seeing on student support funds are likely to get worse."

The Tories also back an independent review, which they have been demanding for the past three years.

Education spokesman Murdo Fraser said: "There are real and serious challenges ahead for higher education in Scotland.

"Perhaps some people are only now realising the extent of the problems we face."

The recently-passed Budget for 2010/11 provides an increase for universities of just over 35 million, a 2.1% real-term increase.

There have also been an additional 7,500 students in higher education, including those on college courses, in this academic year. The 2010/11 Budget will see these additional places maintained into next year.

A spokesman for Education Secretary Mike Russell said: "The SNP government believes that access to education should be based on the ability to learn, not the ability to pay, and that universities are a crucial engine of economic growth."

He said that universities in England face funding cuts of 6% and a cut of 6,000 places next year alone, under Labour.

He added: "At the same time, Labour is planning to massively increase the fees students pay, burdening graduates with ever increasing levels of debt.

"It is little wonder universities in England are predicting a 'meltdown'.

"That's Claire Baker's and Labour's real agenda when they call for a review. They want to cut university funding, cut the number of university places and re-introduce student fees."

The Scottish Government has already ruled out top-up fees in Scotland and scrapped the graduate endowment – a one-off 2,000 payment after graduation to widen access.

It emerged last week university applications have increased by almost a third.

Figures from the applications clearing organisation Ucas showed that by

the main January deadline 38,763 Scots had applied for degree courses, up

31.2% on last year.