Universities ask Scottish Government for more money over National Insurance rise

University chiefs have asked the Scottish Government for more money, saying they cannot absorb the cost of the UK Government's National Insurance hike.

Several universities, including Edinburgh, Dundee and Robert Gordon, have warned staff of potential redundancies and other cuts.

Now umbrella body Universities Scotland has taken the "unprecedented step" of increasing its 2025-26 budget ask to tell the Scottish Government it will need another £49m.

In its original submission to ministers, the organisation said a "sudden drop" in the number of international students had taken "tens of millions" out of the sector's finances and called for action to "ensure the long-term sustainability" of higher education.

Now it has gone back to the Scottish Government to say more money will be needed thanks to changes brought by the UK Government.

In a statement, Universities Scotland said the increase in employer's National Insurance contributions would cost the sector £45m in the next full financial year.

However, analysis by the Institute for Fiscal Studies (IFS) suggests the figure could be as high as £57m.

And the education body said that the move to increase tuition fees in England to £9,535 means more money is needed to stop investment in Scottish education falling far behind that south of the border. 

In the submission, Universities Scotland said: "Before the uplift in fees in England, there was a 21 per cent gap, or £2,020, between what is invested on a per student basis in Scotland and England. 

"We do not want to be in a situation where the level of resource invested in the higher education of our Scottish students in Scotland falls even further behind that experienced by an English student in England."

In a paper earlier this week, the IFS warned the Scottish Government must increase investment in higher education by £60m this year to prevent universities from having to "do more with less".

While the number of international students high a record high in 2022-23, the number of applications has receded.

For the UK as a whole, there were 16 per cent fewer visa applications by students between January and October this year, compared with the same period in 2023.

Scottish institutions reported teaching resources of around £2.7bn in 2022-23. Around half of this total was derived from tuition fees for students from outwith the EU.

The Scottish Government has called on the UK Government to "fully reimburse" the cost of the NI hike on the public sector.

Health secretary Neil Gray said the change could cost the public purse more than £500m.