Scotland’s universities need to think about scarcity, not just scale

Sir Anton Muscatelli's first Future Framework report has made Scotland's university funding problem difficult to avoid.

The headline gap of around £200 million is serious, but the figures beneath it tell the fuller story. Public funding met only 82 per cent of the cost of teaching Scottish-domiciled students, research income covered 72 per cent of research costs, and the estate maintenance backlog exceeds £1.1 billion. This is a structural problem: the present model does not pay for all the activity Scotland expects its universities to maintain.

Published days later, the Scottish Government's Programme for Government set out a much wider programme of public service reform. It proposes replacing the 14 territorial Health Boards with two Strategic Health Boards and bringing SEPA, NatureScot and Zero Waste Scotland, with Scottish Forestry potentially included, into a single overarching environment body.

Universities aren't a special case

The programme proposes a whole-system approach to estates and procurement, alongside shared digital and data platforms. Universities are not directed to merge, but their future cannot sensibly be discussed as though this wider reform were happening elsewhere.

These same organisations work together on health, environmental delivery, skills, research and regional development. In rural and regional Scotland they often share people, facilities and relationships built over many years. A change that looks efficient within one organisation can remove capacity another service relies upon.

The Programme for Government couples national consolidation with community empowerment and more care closer to home, while the Public Service Reform Strategy requires services to work through a “place frame.” A national environment body will still have statutory and regulatory duties across Scotland and two Strategic Health Boards will still depend on local workforces, partnerships and trust. Changing the scale of management does not lessen the importance of place.

Large universities have advantages of scale. They can spread the fixed costs of governance, regulation, technology and specialist staff across more activity, while shared services may reduce costs without weakening academic provision. Those advantages deserve proper weight, but scale is not a sufficient test of value.

The scarcity problem

Scarcity is harder to see in a balance sheet.

A university may house a national dataset built over decades, a technical service connected to teaching and research, or a specialist team trusted by an industry and its regulators.

Specialist status cannot simply be asserted. The test is who depends on the capability, whether it could be provided elsewhere, how long replacement would take and what would be lost meanwhile. The answer may support independence, partnership, a shared service or another institutional home. It cannot be assumed that the capability will transfer intact when the boxes on an organisational chart are moved.

This requires a clear distinction between the capability, the place in which it is needed and the organisation currently responsible for it. Students may need access to a course in rural Scotland without every administrative function being reproduced there. Employers may depend on a specialist skills pipeline while caring little about who runs the payroll behind it. Equally, moving an expert team can interrupt a long-running dataset and weaken relationships with local industries and communities. Place-based delivery can coexist with shared administration, provided reform identifies what depends on proximity, continuity and trust.

The funding model makes this harder. A three-year research contract can depend on a laboratory and specialist workforce assembled over several decades. Advisory or commercial work may draw on publicly supported science, while research is strengthened by problems first encountered in practice. Each strand can appear viable even when no one contributes enough to sustain the common base. If Scotland regards that base as nationally important, it needs a clearer way to recognise, scrutinise and fund it.

Back to the future

The next phase of the Future Framework should identify nationally important capabilities and their dependencies before deciding the future shape of the sector.

That work should sit alongside public service reform and examine the combined effect of changes on the same places. Several individually rational business cases can still hollow out local capacity if nobody considers their cumulative effect. Our shared place-based missions are central to delivery, not an incidental benefit.

Scarcity is not a blank cheque.

Specialist institutions must use assets well, recover costs properly, collaborate where there is a genuine gain and stop work that no longer has strategic or financial justification. Larger structures need the same evidence test, including transition costs, complexity and the possible loss of specialist capacity.

Scotland may have fewer independent universities by 2045, just as it intends to have fewer public bodies much sooner. The count will not show whether reform has worked. The better measure is whether Scotland can still provide education where it is needed, undertake important research, meet professional and regulatory responsibilities and sustain the partnerships through which national policy is delivered.

That suggests a simple principle for the next phase of the Future Framework: do not protect institutes simply because they exist, but invest confidently in the capabilities Scotland will need for the future.