Funding the Scottish universities

Just a few days ago (on December 21st), the Scottish Funding Council (SFC) announced its provisional funding allocations to universities for the academic year (AY) 2012-13, with final allocations expected to be confirmed in March 2012. Normally these notifications are quite dull, though everyone in the sector tends to pore over the figures to see whether they have done better than the previous year, or better than their 'natural' institutional competitors. This year such comparisons are less easy than normal - without doing some hunting around the SFC archives - because the tables accompanying this latest circular made no institution-by-institution comparison between the current allocations and those envisaged for 2012-13, except to indicate a very modest overall cash increase (which is even less modest when inflation is allowed for).

However, the circular does include some interesting pointers to how funding arrangements are likely to work in the future. Four of these are worth highlighting right away.

Teaching grant and English students
Since from AY 2012-13, English students attending English universities will be paying fees at the new higher rates, the SFC has decided that it will no longer include in its grants to the Scottish universities an element to cover the teaching costs of English students studying in Scotland. Instead, Scottish universities will set fees for English students to reflect the full cost of teaching them. Most institutions have already announced the fees they will charge, though I imagine there could be some changes as the market situation evolves.

Research
It now seems likely that research funding linked to the periodic research assessments, as well as the accompanying support for postgraduate students, will become rather more concentrated in Scotland. For the SFC announced that units of assessment (mostly departments) with a two-star rating will no longer receive research funding from the SFC, so all funding will go to those with rating of 3* and above. This brings the Scottish situation more into line with England, but a few departments will lose out. This decision doesn't, of course, mean that departments with lower ratings cannot do research, only that they will not get public support to do so.

Outcome agreements
The Scottish Government is pressing SFC to base its funding allocations to institutions increasingly on so called outcome agreements, essentially a set of targets that can be monitored and reviewed, covering such issues as widening access and the success of graduates in finding employment. Universities are already active in these areas, so in a sense having to agree targets might not seem like a big change, except that now there could be financial penalties for failing to meet targets.

However, it does represent a step further down the road of institutions having to comply with more and more central direction (usually called, euphemistically, 'guidance'), and can be seen as a loss of academic freedom for the universities. Whether this is a good thing or not depends on what you think universities should be doing, what their roles in society ought to be, and how they should go about fulfilling their various functions. It also depends whether you think the government, or other central agencies like the SFC, can do a better job than the universities themselves in determining how the higher education sector should operate. Personally, I am quite sceptical of the ability of the 'centre' to manage universities very well, so these latest proposals make me feel quite uncomfortable.

Mergers
Last, though not explicit in the circular, the SFC has made clear that it does not regard mergers or other forms of closer cooperation between higher education institutions as being 'off the table'. True, the recently advocated merger between Dundee and Abertay Universities appears to have fallen by the wayside, but there may be other combinations being considered elsewhere. We shall have to wait and see.

All in all, 2012 should be an interesting year for Scottish higher education.