Aberdeen University faced an uncertain future in 2023-24 due to financial pressures on the historic institution.
Plummeting numbers of high-paying international students and little hope of extra funding to make up the shortfall meant the university had to save millions of pounds.
Staff were made redundant to plug a £15 million shortfall with workers taking early retirement or voluntary severance after a hiring freeze was initiated.
It was an early warning of the financial woes hitting the university sector across Scotland, including crisis-hit Dundee University, in recent months.
More than 600 staff are at risk at the Tayside institution, while at Robert Gordon University more than 130 jobs could be lost.
But what does Aberdeen University’s financial outlook look like now? We take a look.
What do the accounts show?
In the latest accounts for 2024, the principal of Aberdeen University hailed the “significant” progress made in stabilising the finances.
Professor George Boyne said the university had taken “swift and decisive action to secure a sustainable financial position”, despite rising costs and lower public funding.
This reduced the initial projected deficit of £12.5m at the beginning of 2023-24 to £8.5m as of July.
This was reduced further to approved budget deficits for 2024-25 of £6.7m and £2.1m the following year.
But in his foreword, Prof Boyne said 2023-24 had been a “tumultuous year for the sector as a whole” as the university grappled with “significant” financial challenges.
He listed rising costs, lower public funding and a reduction in international students as factors impacting university finances.
How is the university raising money?
The university court approved a three-year financial recovery plan (2023-2026) to ensure it grows its income and achieves targets set out within the plan.
This included expanding provision of online courses, adapting degree programmes to more closely align student and employer demand, continued growth in research income and scaling up fundraising.
A recent Aberdeen University briefing provided to MSPs said the historic institution is “well placed to grow our income to become an ever-stronger organisation delivering world class research and education”.
It added: “As our budgets for this year and next currently stand, we also have no plans for a further early retirement scheme or voluntary severance.”
What are the challenges?
The briefing states that despite “good progress” to date, the external operating environment “remains challenging”.
The university says it would welcome any new initiatives which help to improve the attractiveness of the UK to overseas students and their dependents.
“While the new UK government has certainly improved the rhetoric around international students, which is welcomed, further progress is needed to reverse the previous government’s policy decisions”, the briefing added.
“In particular, the decision to withdraw the opportunity for some students to bring family members with them while studying continues to negatively impact the UK as a study destination.
“International fee-paying students remain central to UK university funding models and the impact of previous government policy has restricted the capacity to recruit to the extent that many institutions are announcing very challenging financial positions.”
On a visit to Fife on Friday, Chancellor Rachel Reeves refused to concede UK Government policy had made it harder to recruit international students.
Almost half of Scots universities have reported a deficit.
But Ms Reeves does not accept immigration is the cause of the cash crisis.
She told journalists: “I think that the problems at Dundee are greater than other universities across Scotland and reflect some of the decisions made there.”
Conversation