Why are things turning sour at Edinburgh University?
Staff accuse principal of ‘manufacturing a crisis’ as academics face job cuts to balance £1.4bn a year books
With its internationally acclaimed design, flawlessly restored architectural heritage and manicured lawns, the Edinburgh Futures Institute is a powerful symbol of the University of Edinburgh’s global standing.
Designed to house research, foster collaboration and help shape international debate on the biggest challenges facing the planet, the surroundings are fitting for one of the world’s great educational institutions. Former Prime Minister Gordon Brown was among the first speakers to attend one of its prestigious debates.
The beautiful addition to the university’s campus close by the Meadows is also seen by some of its staff as a symbol of what is going wrong at one of Scotland’s most successful institutions. A sign of an approach which they say has put investment in showpiece buildings above fair treatment of its staff and protecting academic traditions.
The university’s international standing is as high as ever, with groundbreaking, world-class research in areas including AI, medicine and climate change, and recognised as the best university in Scotland in the Times Higher Education Awards.
Visit any of its five buzzing campuses and you’d never tell it’s grappling with a financial crisis. But the university, like others in the sector, is facing what the Institute of Fiscal Studies called a “perfect storm” of rising costs and slowing income, following a decade of Scottish Government funding cuts.
Some universities have seen their income fall. Edinburgh’s however is still rising, but not at the rate it had banked on, partly due to a slowdown in what once seemed to be ever-increasing fees from international students.
University principal Professor Sir Peter Mathieson emailed staff last week warning “nothing is off the table” as the university seeks to make “urgent” savings. A voluntary redundancy programme has just been extended, with compulsory job cuts a possibility.
Schools and programmes within the university may close, with institutional mergers, more outsourcing and ‘centralisation’ all on the table, Mathieson has warned staff.
That, combined with the lowest student satisfaction ratings in Scotland, suggests problems at the university beneath its undoubtedly outstanding achievements.
Unions say it’s a “deeply worrying” time for staff who fear for the impact of the restructure on them and their work. In response, the union representing academic staff, the UCU (University and College Union), has incited a local dispute, the first step towards potential industrial action, the Inquirer can reveal.
It has also lodged a vote of no confidence in the university’s management over the restructure, saying it is “wealthier than it’s ever been and has the resources to weather any storm”.
Industrial strife
Industrial unrest is familiar territory for the university.
Mathieson moved to Edinburgh from the University of Hong Kong in 2018. He was seen from his early days as being close to Professor Sir David Eastwood, the former vice-chancellor of Birmingham University who was in the vanguard of moves to liberalise the finances of UK universities and make them less reliant on government funding.
The Edinburgh University principal soon earned a reputation for being “hawkish” on pay and employment rights, keeping a tight control on the wage bill and showing a determination to reduce the university’s pensions liabilities. That has led to almost constant industrial disputes, including a marking boycott in which staff taking part saw their pay cut by as much as £10,000 each during the protest.
That has left him regarded with suspicion by some staff, who compare his style unfavourably to the more consensual approach of his Glasgow counterpart Sir Anton Muscatelli.
After 15 years of real term pay cuts, a review last year led to improved pay and prospects for some staff following a pay grades review. However, years of declining earnings have eroded much goodwill, and unions say growing workloads and stress are an issue.
Sophia Woodman, Edinburgh President of UCU, said: “We know from members that many are seriously overworked already. Some are off with stress.”
The shadow of redundancy
Last July, the university announced a 2.5 per cent cut in its overall spending, which currently runs at around £1.4 billion per year. That really hit home for staff in September when the voluntary severance (VS) scheme was announced.
Under the VS package staff are being offered 1.75 times statutory redundancy pay to a maximum of 39 weeks’ pay. There has been considerable curiosity among staff, with at least 7,800 visits to the VS package calculator on the university’s website. That number equate to around 40% of employees, but the university points out the total visits to the page do not match the number of individuals seeking details of the package available to them.
It’s a tough choice, says one academic, worn down by years of successive real terms pay cuts.
“Of course, I’ve thought about leaving but that isn’t straightforward. Moving to another employer means moving to another city, possibly another country, and uprooting your family. I’m not prepared to do that.”
“If my pay had kept up with inflation since I joined the university 15 years ago, then I would be about £15,000 better off than I am today. That’s roughly what I might be earning if I was working in the same role overseas where pay has kept pace with rising costs far better than in UK universities.”
Some staff complain the university has not been open enough about the VS process, saying no savings target has been shared and senior staff, including heads of schools, weren’t informed in advance.
One senior academic said: “Measures like VS don’t seem to have been clearly thought through. There’s no idea of target savings or even what the financial case is for a severance scheme specifically.”
An increase in the number of staff on £100,000-plus salaries - including Mathieson, whose total pay package of more than £400,000 makes him the highest paid person is Scottish higher education - has caused disquiet among some staff.
“When staff asked if savings could be made by reducing the salaries of these highly paid managers, including the Principal, the response has been that savings would be negligible,” says Woodman.
Pat Egan, industrial officer at Unite, adds: “It’s being run more like a business than a university. They seem very creative about coming up with jobs related to ‘solutions’ around saving money.”
What university says about its finances
The university says it is being open about its financial challenges. These include a drop in the income it expected from overseas students - although that figure is still rising - and a growing wage bill, exacerbated by a £12.5 million increase in its National Insurance Contributions as a result of the last UK Budget.
It made a surplus of £25m in 2023/24, after an exclusion of pension adjustments, currently forecasts a close to break-even position for 2024/25, and expects to hit a deficit from 2025/26.
An interim finance director, Nirmal Borkhataria, has been hired who describes himself as a “turnaround specialist”.
The previous financial director said the university’s finances were a challenge “greater than we have ever faced”. Lee Hamil wrote in the university’s annual report: “Growth in tuition fees, our largest income stream, is forecast to continue at levels below recent historic trend.
“Against this, our expenditure is forecast to grow at a level greater than income driven by pressures from inflation, changes to pay scale and the recent increase to employer’s National Insurance Contributions.”
Its total expenditure in 2023/24 climbed by 10 per cent to £1.409bn, with salary costs rising by 12 per cent. Other operating expenses, which includes investment in its growing property portfolio, went up even faster, by 17 per cent.
Although student headcount fell slightly to 49,485 last year, from 49,740 the year before, sources say it has increased again in the current academic year.
A University of Edinburgh spokesperson said: “In line with our commitment to be transparent about the university’s financial position, we have shared with staff that we anticipate having to take further actions to ensure the university remains on a secure financial footing.
“We have also decided to extend the deadline for applications to the voluntary severance scheme by two weeks until Friday 28 February. The university executive will consider our financial position next week, after which we will be in a position to update staff further.”
Why are academic jobs on the line?
Staff are questioning why their jobs are on the line when most of its activities, including research and teaching, appear to be profitable.
An analysis of the university’s finances has led the Joint Unions Finances Working Group - including representatives of UCU, Unison, Unite, Prospect and EIS-ULA - to accuse its management of ‘manufacturing’ a crisis to justify job cuts.
They are calling on Mathieson to prioritise protecting jobs over other costs, such as its expensive capital projects.
The university’s accounts show its total income has increased. In 2024, it stood at £1,434m, up £49m on the previous year, and £136m compared to 2022. The problem, as the university points out, is that its costs are rising faster.
The question the unions are asking is where should the spending cuts reasonably fall.
While staff costs went up, they are decreasing as a proportion of the university’s overall costs. The £756 million bill is 54 per cent of its total expenditure, compared to 55 per cent in 2023.
The total student headcount fell by 0.5 per cent, but it was a more profitable mix of students. Income from tuition fees and education contracts rose by three per cent to £527 million - up from £514 million in 2023 - largely driven by overseas students paying as much as £36,000 in annual fees.
Investment income has risen by almost 50 per cent in 2024 to £64 million from £43 million in 2023.
After staff costs, the next largest expenditure is “other operating expenses” which increased by 17 per cent to £540 million this year. These include the costs of supporting the University’s estate, the annual report confirms.
Spending on capital projects reached £186m in 2024, up £19m compared to 2023, and £28m more than 2022.
“The most concerning part of the annual report relates to the university’s unrestrained capital expenditures,” a statement released by the joint unions says. “These need to be brought under control quickly. These expenditures grew at an unprecedented rate, reflecting the senior management’s lack of control over costs of the real estate projects they launched in the past few years.
“These enormous expenditures are not required by extra student intake, as our student numbers are stable, and in-person student numbers have been decreasing due to the rise in online learning.”
Student satisfaction ratings
The university’s student satisfaction ratings may be the lowest in Scotland, and falling, but both staff and students have defended overall teaching standards at the university.
Some say the drop is down to expectations of more one-to-one time, particularly among private schools students, who make up such a large proportion of the Edinburgh intake.
“It is a long-standing problem, and we have tried a lot of things to change it but nothing seems to shift the dial. I do believe the standard of teaching at the university is generally excellent”, said one long-serving academic.
“I believe one of the issues is the expectations of students. The background of many of the students at Edinburgh is incredibly privileged.
“When you get students stepping out of Eton and Harrow they are used to a lot of personal attention and one on one teaching time. They come here and get a lot less and they think ‘is that it?’.”
The large number of overseas students, paying in some cases eye-wateringly expensive fees, tend to have similarly high expectations.
“When you break it down hour for hour, I am more expensive than Taylor Swift. Of course, when you are paying £36,000 a year you have expectations about what you get in return.”
The marking boycott and industrial action is also likely to have hit student satisfaction ratings with most students who have graduated in recent years having faced disruption to their education at Edinburgh.
Dora Herndon, president of the Edinburgh University Student’s Association, says: “There’s been a drop in satisfaction ratings, particularly NSS scores. There’s a clear correlation with the feeling that students don’t have an opportunity for feedback on the finances.
“The PHD students who are also staff see first-hand the cuts to work budgets and the uncertainty of how the schools can meet the cuts being asked of them.
“We see news articles and hear about the cuts, but students don’t really know what’s happening. Nothing is being communicated directly to them and they are worried.
“Students need to know how this will impact them now and in the future.
“We see the impact already of having less tutors, that affects group sizes. Take Moray House School of Education. They are not getting the teaching hours needed for their degree. It amounts to a lower quality of education.”
Dora graduated in July after studying philosophy and politics. She added: “Losing staff means losing specialist subjects. If one person leaves a department students can lose that whole area of study. Departments that are understaffed are not able to fill the gaps. That’s affecting student welfare and guidance too, as well as class teaching.”
Top-down decision-making and ‘lessons not learned’
Various aspects of university life have been affected as belts are tightened across campuses.
Those with larger offices are being forced to downside or share, heating has been turned down during the working day and sharply cut back after 5pm in all university buildings. Staff say they have even been told off about using too much paper.
The UCU union’s Woodman says too much time and money has been spent bringing in consultants to work on strategies rather than listening to staff.
“Why not ask the staff instead of bringing in consultants? Following the disaster with the Oracle payment system, an external report was commissioned into what went wrong. It found that part of the problem was that staff were not listened to. It feels like the lesson hasn’t been learned.”
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