Open University in Scotland faces capping student numbers in £16m funding gap

'Chronic underfunding' puts open ethos at risk, director Susan Stewart tells Holyrood

Scotland's fourth largest university is “chronically underfunded” and may have to turn students away without “fair funding”, it is claimed. 

The Open University in Scotland (OU) was founded 50 years ago to widen access to higher education and now has more than 22,000 learners. 

Established on the principles set out by pioneering Scottish MP Jennie Lee, it is a “world leader” in remote learning and experienced a 30 per cent rise in student numbers during the pandemic. 

But that has not been met with an equivalent increase in funding and OU director Susan Stewart has told Holyrood that the institution is now running £16m short and coming under “unsustainable” pressure. 

In an exclusive interview, she said: “The last thing we want to do is to say to students, often the most disadvantaged people in Scottish society and disproportionately impacted by the pandemic, is that we are forced to close our doors.  

“We will be making a case for fair funding and parity for part-time. It has never been more needed than as Scotland is emerging from the pandemic.” 

The fourth largest university in Scotland by student numbers, OU extends to all parts of the country. One quarter of its learners identify as disabled and four in ten hail from communities in the two most deprived quintiles. 

With most students learning on a modular and part-time basis, OU is funded on full-time equivalent (FTE) numbers and, unlike other higher education institutions, its teaching grant is based on funded student numbers at completion, not registration.  

As a result, the support it gets from the Scottish Funding Council is directly linked to the number of learners who complete OU modules, up to the number of funded places allocated.  

But not all students complete their courses with OU, with some taking the credits they’ve earned and transferring to bricks-and-mortar centres. Completion numbers at OU have risen since the introduction of the part-time fee grant, which covers tuition costs for those earning less than £25,000, but this has resulted in what OU calls “sustained growth” in FTE numbers. 

In 2020-21, it was fully funded for 4400 FTEs, but had in excess of 7,400 students. For the remaining 3000, it received only module fees and no teaching grant, resulting in a multi-million funding gap. 

The settlement is little-changed since 2013, when it was funded for 3800 FTEs.  

Over eight years, funding has increased by just 600 FTE places. 

Stewart said: “We are underfunded to the tune of around £16m and yet we are meeting all the Scottish Funding Council and Scottish Government indicators in terms of widening access. 

“There will come a point where it is not sustainable. We would have to consider putting a cap on numbers and saying ‘no’ to students.” 

A Scottish Government spokesperson said: “The 2022-23 Scottish Budget for the Higher and Further Education Sector has allocated nearly £2bn to ensure we continue delivering our world leading education, skills and training. 

“In addition to their core allocation, for the last two academic years we have provided up to an additional £1m per annum to the OU to support delivery of the Flexible Workforce Development Fund to SMEs across Scotland. 

“Budget settlements provided to the FE and HE sectors balance the needs of the sectors and students with affordability in relation to the range of Scottish Government priorities. We would, however, be happy to meet the OU to discuss their funding position.” 

A spokesperson for the Scottish Funding Council said: "Throughout the Covid-19 pandemic we have successfully supported the financial sustainability of each of Scotland's 19 universities. Looking to the future, we want to create a more responsive, joined-up tertiary education and skills system that drives Scotland's economic and social renewal. 

"Our recent review of tertiary education and research shows that there are no easy answers to what are likely to be challenging financial times ahead. Following the review, we are working with colleges, universities, the Scottish Government and others to meet these challenges. As this work moves forward, the fair and transparent distribution of public funding will remain at the core of what we do."