Scottish universities recorded a surplus of more than ?17 million in the past academic year, a 92 per cent reduction on the ?211 million surplus recorded the year before.

Publishing an of sector finances, the Scottish Funding Council (SFC) said the ¡°significant deterioration¡± was mainly?as a result of increased staff and other operating costs, ¡°set against overall flat income¡±.

The annual financial sustainability report had been delayed this year because of the turmoil in the Scottish sector but the SFC has made what is has available, following a request from the Scottish government¡¯s education, children and young people committee.

One of the institutions worst affected by the crisis, the University of Dundee, is yet to file its accounts and was not included in the analysis.?If it had, it would likely have pushed the sector as a whole?close to?the red,?given that previous reports have said the institution faced a ?12 million deficit over this period, which has now risen above ?30 million for the current academic year.

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The ?17.2 million surplus for 2023-24 was better than the forecast position of a ?7.4 million deficit.

Nine institutions were in deficit in 2023-24, the SFC said, and eight recorded operating surpluses.

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Eight spent a total of ?16.9 million on staff restructuring, significantly more than the ?3.2 million spent during 2022-23.

The sector reported cash and short-term investment balances of ?1.682 billion at the end of July 2024. This was a 26 per cent reduction on last year¡¯s balance of ?2.265 billion at the end of July 2023 and a 23 per cent reduction on the forecast of ?2.177 billion.

However, the SFC said the reduction was?mainly explained by one institution reclassifying the way it reports its investments.

Financial problems facing all UK universities have been felt more acutely in Scotland, where the fees of domestic students are covered by the state, resulting in a significantly lower level of funding than counterparts in England.

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Falls in international recruitment have also hit hard, as have rising costs such as the recent hike in national insurance payments.

The University of Edinburgh, which is seeking to save ?140 million from its annual budget, faces strikes in response to its plans, the University and College Union in Scotland announced on 21 May.

A ballot of staff had a turnout of 60 per cent, with 84 per cent of these members backing strikes and 93 per cent backing other forms of industrial action, including a potential marking and assessment boycott.

The union, which has called for compulsory redundancies to be taken off the table, said the ¡°unprecedented¡± cuts would result in ¡°larger classes and reduced course and programme choices that will inevitably harm students¡¯ education, with less teaching and support for students alongside a reduction in the breadth and depth of research¡±.?

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Branch president Sophia Woodman said the vote was ¡°a clear message from members to university management that they need to think again¡±.?

Peter Mathieson, principal and vice-chancellor at Edinburgh, said: ¡°We have been transparent about the savings urgently needed to secure our financial footing, with forecasts showing that we will be in deficit from the next financial year should we not act now.

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¡°Failure to take preventative steps would leave us in an unsustainable situation, requiring deeper savings.?We respect colleagues¡¯ right to take part in industrial action, and will do all we can to minimise disruption to students should this take place. We will also continue?to work with our joint trade unions as plans develop to deliver these savings.¡±

tom.williams@timeshighereducation.com