Written evidence submitted by University of Edinburgh (USC0004)

Scottish Affairs Committee Enquiry on Universities and Scotland

Introduction

Founded by the city of Edinburgh in 1583, the University of Edinburgh is the first true civic university in the UK and one of the four ancient universities of Scotland.  We are consistently ranked one of the top 50 universities in the world in international league tables, including coming 20th in the 2020 QS World University Rankings. Broad based in terms of subject area, we offer 399 undergraduate degrees, 495 postgraduate degrees, and carry out research in a comprehensive range of disciplines across the arts, humanities, social sciences, physical and biological sciences, and clinical and veterinary medicine. Our research (4th by research power in REF2014) and innovation (4th in HEBCIS 2020) transforms the world. Our international students now represent 44% of our total community, coming from 180 nations. We also have an important mission in Scotland in ensuring equality of access to higher education, with over 11% of Scottish students hailing from the most deprived communities in Scotland in 2019-20.

We turn over £1.15 billion per annum, bring in £300 million in research spend, educate 44,000 students on campus and online and reach 3 million via MOOCs on every country on the planet. The University is the third largest local employer in the local area, employing over 15,000 staff but creating a further 31,000 jobs and returning over £2.3 billion to the Scottish economy, and starting up 60 companies a year.

Our Strategy 2030 affirmed our vision and purpose: our graduates, and the knowledge we discover with our partners, make the world a better place. As a world-leading research-intensive university, we are here to address tomorrow’s greatest challenges. Between now and 2030 we will do that with a values-led approach to teaching, research and innovation, and through the strength of our relationships, both locally and globally.

We welcome the opportunity to respond to the Committee’s enquiry. As Scotland’s largest university and biggest recruiter of students from beyond Scotland, we value the opportunity to engage in the conversation about the relationship between Scotland’s funding and governance for universities and that of the other parts of the UK.

Summary

In our response, we would like to draw attention to the following key points:

1)      Research in the UK and Scotland in particular is world-leading and has impacts across the globe. Edinburgh’s achievements here are particularly remarkable when recognising that we do this while grants are funded at a level that is below the cost of delivery. Even more could be achieved if it were funded at the level of the full costs.  This is a long-term problem, made acute by the loss of international students because of COVID-19

2)      Our international students are essential to the culture and experience of studying at Edinburgh. We welcome the recent changes to enhance their opportunities post study in the UK. This helps to recognise their wide value to the UK and Scotland and its economy. Recent dialogue has focussed on how the fees paid by international students underwrite other university activity, both research and teaching; this is true, but we must remember to celebrate the other contributions these individuals make.

3)      There are opportunities to consider how UK HE policy could work to the advantage of universities across the whole sector. The University of Edinburgh would be enthusiastic about being part of these discussions. For example, we welcome the review of the NSS; as currently pitched this is focussed towards the English sector but we can see value in considering this across the UK sector.

4)      We value the various institutions which link into Europe and would want to see continuity beyond Brexit. Disassociation from Erasmus would be disappointing and we are glad that the recent funding call allows us to continue to participate until 2023 – it is our sincere hope that a way can be found to continue this important activity beyond the transition period, as it allows us to deliver placements beyond the UK benefitting student and staff mobility, the future career prospects of our students and staff, and specifically it is of key importance to our modern language teaching.

5)      We live in a time of uncertainty on funding, and this is particularly key in terms of funding for teaching. Recognising that home students do not cover their costs, and finding a way to improve the sustainability of teaching funding, would be areas in which we would be enthusiastic about a wider conversation.

1) The scale and nature of challenges and opportunities around funding for Scottish universities including funding models, deficits, overseas and EU students’ fees

As a university, our raison d’etre is for the public good: the funding we receive allows us to benefit society and address the grand challenges of our time. We are the third largest local employer in the local area, employing over 15,000 staff but creating a further 31,000 jobs and returning over £2.3 billion to the Scottish economy. Our reputation and standing are based on what we give back to the world: recognised as a top 50 university by leading ranking compilers, this is based on the quality of our research and our reputation for being an excellent place to study.

We are international in outlook while remaining firmly embedded in our local community. Researchers in law and politics are leaders in constitutional change. We have a long history of being at the forefront of the arts and humanities, from the Enlightenment to the James Tait Black prize. Our world-leading research in Informatics has attracted two unicorns to Edinburgh, Skyscanner and Fanduel. We are key partners in the Edinburgh and South East Scotland City Region Deal, in which we were drivers of the bid for funding to accelerate the growth of the local region, by investing in innovation, skills and infrastructure, improving performance and tackling inequality and deprivation. Through the Data Driven Innovation (DDI) strand of the City Deal, with our partners in Heriot-Watt University, we are using world-leading research and data analytics capabilities in partnerships with public, private and third sector organisations to improve products and services, transforming the City Region into the data capital of Europe.

Notable among collaborations through DDI are the Global Open Finance Centre of Excellence, a world-first which has received £22.5 million funding through the Strength in Places fund; and the Advanced Care Research Centre, which aims to transform responsive, personalised care in later life, enabled by data science, artificial intelligence, assistive technologies and robotics. The Bayes Centre, launched in 2018, supports a community of over 400 internationally recognised scientists, outstanding PhD students, leading industry experts and innovation support professionals, working together across disciplines and sectors to advance data technology and apply it to real-world problems.

Financial sustainability is vital to allow investment in emerging areas of research, to support our students, and to meet the grand challenges faced by the world. With that in mind, it is worth acknowledging that the cost of many of our activities outweighs the income received for those purposes.  If we could move to a position where research and teaching were funded more sustainably, we – and the rest of the Scottish and UK sector – could be in an even stronger position to contribute to the world.

Scottish universities’ world-leading research and teaching is made possible through funding from diverse sources. At the University of Edinburgh, these include tuition fees (31%): Scottish Funding Council (SFC) grants for teaching and research (18%); research grants and contracts (26%); and other sources, including commercial activities, donations and endowments, and knowledge exchange and innovation funding (25%)[1].  We are not unusual in Scottish universities as having tuition fees as the largest source of funding – this has been common across the sector since 2014-15[2]. Our business model is cross-subsidy, as in all Russell Group universities. We make a surplus on international students – post-and undergraduate; industrial funded research; and our catering, events and accommodation; while our teaching of (especially undergraduate) home and EU students, and our research, do not cover their full costs. Overall, our activities generate an annual surplus of between 1 and 3%, which is stable and sustainable though without allowing much to reinvest. Our ambition pre-COVID was to increase our surplus to reinvest in the ‘porous university’ - with student talent, staff and industry/public sector working shoulder-to-shoulder to solve global challenges - and DDI.

UK and Scottish Research is funded through the ‘dual support system’ – research grants, except from industry, cover only a proportion of their full costs. Those from UK Research and Innovation (UKRI) cover 80% of the full economic cost, while charities typically cover closer to 50-60%.  Core research funding from SFC covers some of the cost gap, as well as allowing investment in new areas and supporting underpinning infrastructure. As Edinburgh receives a higher proportion of its research funding from charities than the Russell Group average, a higher proportion of our costs require cross-subsidy.  In 2019-20, research income was nearly £300 million, while SFC’s Research Excellence Grant was worth around £80 million.

The cost of teaching students averages more than £12,000 per student[3], higher than the fees for a Scottish, EU or Rest of UK student. We also receive nearly £64 million in teaching grant in 2020-21[4] which contributes to the cost, but still requires some level of cross-subsidy.

At present, EU students come under the same fee regime as Scottish students: Scottish and EU students fees are paid for by the Scottish Government through the Student Award Agency Scotland (SAAS), and the places available to Scottish students are to an extent limited because EU students are part of the same places cap. As a nation, Scotland has an opportunity within the bounds of UK policy to rethink how EU students are considered in fee terms from 2021-22 onwards. As they will no longer receive free (to the student) tuition, the associated budget will be available to reinvest elsewhere in the Scottish HE sector. We recently received clarity on how EU nationals with settled or pre-settled status anywhere in the UK will be treated – as being eligible for home fees in Scotland – and are anticipating further information shortly on the fee status of other EU students.

We are clear that international student fees allow universities to remain financially sustainable. They are vital to our University community for many other reasons, and we are proud that a high proportion of our students hail from beyond the UK. They make the University a vibrant, multicultural place where students from the UK have the opportunity to learn with and from others with different backgrounds and to carry those different perspectives with them into their lives after study. Furthermore, Edinburgh’s international students contribute £275 million and 8,000 jobs to the Scottish economy.[5] We would not want to diminish these benefits: but we would welcome a funding solution that recognised the true cost of research and teaching and that allowed us to be less dependent on high fees for international students.

Covid impacts

The University of Edinburgh has seized the opportunity to play its part in countering the Covid-19 pandemic.  Our academic staff have stepped up, as researchers seeking out new ways of treating and preventing the disease; as clinicians working in the NHS; and as government advisors.  Our laboratory space has been used for testing.  Technicians in academic and professional services teams have made face visors. The whole University has transformed its activity from largely face-to-face to hybrid, and we have still managed to graduate a cohort of students and welcome new and returning students to the campus in September.

These essential activities were not without a financial cost.  As noted above, we have been able to make 1-3% surplus in recent years, a position that not all Scottish universities have shared.[6] The financial impacts to the University in 2019-20 have been relatively modest as the pandemic only affected the final five months of the financial year, with most student teaching having taken place and the impact on student fee receipts being minimal.  The University undertook immediate actions to mitigate the financial impact, including pausing estates spend and allowing only mission critical recruitment, but we also spent around £10 million compensating for the wider impacts – including adaptations to working and study spaces to make them Covid safe, providing IT support for staff working from home, providing student support and the direct spending to help wider society mentioned in the previous paragraph.

The picture for 2020-21 and beyond is much more challenging.  The financial picture is significantly volatile, making any projection of the likely end state for 2020-21 impossible. More students have enrolled this year than in some projections, but many students are only partially enrolled, and the balance is towards Scottish and RUK students and away from surplus-contributing non-EU internationals. If students leave part-way through the year, this also has a cost, with 40-50% of fees being due from December onwards. The main immediate financial threats are from reduced numbers of international students enrolling at the start of term, from international students leaving their programme of study early without paying their full fees, and from students (domestic and international) terminating their accommodation contracts. Another major source of surplus contributing income has also suffered a loss, with the cancellation of conferences and events, and in particular the cancellation of the Edinburgh festivals in August 2020, which make use of University of Edinburgh and Edinburgh University Student Association buildings. 

As undergraduate students in Scotland typically attend for four years, the impact of the Covid crisis will play out over a longer period than for typical English HEIs.  We may also expect to see impacts on new student numbers in the academic year beginning in autumn 2021, which will also then have effects for a further four-year period. We should therefore expect the initial pandemic effects to be in the system until at least 2024-25.

We are taking longer term actions to assure the financial sustainability of the University; with significant uncertainty in relation to tuition fee income for 2020-21 and our income from student accommodation, catering, events and conferences.    As an illustration, occupancy of University managed student accommodation is only around two-thirds of our normal capacity.

In research terms, we have not yet seen a significant impact in income, but we expect the grants from charities to reduce as these organisations see the impact of reductions in donations. Research and innovation are vital to the recovery of the region and the UK, and medical research in particular plays a key role.  We would welcome any impetus towards larger medical research charities contributing more towards the FEC of research.

As well as giving an opportunity to contribute to the local, national and international communities in the fight against Covid, we have opportunity to consider what lessons we can learn from the way we have rapidly responded to Covid. It has given a focus to how teaching delivery can be enhanced with online methods, and the need for large scale University estate, and our learning from this will shape the University going forward.

It has also shone a spotlight on the costs and benefits of the four-year degree in Scotland. The four-year degree model continues to offer breadth and flexibility for students. We are, however, conscious that while advanced entry is available for well-qualified students, this option is not popular – reflecting a desire to be part of a cohort of entrants. We are also conscious that the proportion of school-leavers applying for entry to university from S5 is significantly lower than it was a decade ago. Many students are limited by uneven access and support to undertake Advanced Highers and so will use S6 to extend their portfolio of Higher qualifications. A bridge or foundation year delivered by Universities in collaboration with Schools, as an alternative to additional Highers in S6, might provide an opportunity to smooth the transition between School and advanced entry. The University of Edinburgh is currently considering significant curriculum reform which could offer a real opportunity to improve the way in which the first years of university could explicitly offer our students a broader and deeper foundation of general education.

In short, there will be a financial impact from the pandemic which, combined with other external factors, has further challenged our ability to remain strongly internationally competitive and make the biggest impact we can, given the breadth and depth of our research and reputation.  We are addressing these through a firm focus on adaptation and renewal.

2) How Scottish university research fits in with UK university research

The University of Edinburgh carries out research fully in partnership across the UK.  Examples of this at scale include the Alan Turing institute, the national institute for data science and artificial intelligence, and the Rosalind Franklin Institute, which aims to produce technologies which allow us to see the biological world in new ways, from single molecules to entire systems. Collaboration is clearly essential for successful answers to the "wicked" problems of our times.  Multidisciplinary inter-institutional approaches, working with the best available globally, are often optimal to come up with solutions to global and local issues, and UK wide and international interactions are often more valuable than purely intra-Scotland approaches. For the University of Edinburgh more than 50% of our research publications involve international collaborations; these are often our most highly cited and impactful work.

Highlighting the importance of collaboration, within Scotland, ‘research pooling’ was launched in 2004, an approach that crossed Scotland and aimed to increase the critical mass of Scottish research within specific disciplines, where Scottish institutions were sometimes struggling to compete at scale with the rest of the UK and internationally.  This was accompanied by significant SFC funding. This has succeeded in pushing up the quality and reputation of Scottish universities within these disciplines.[7]  Edinburgh strongly supported this collaboration, taking part in 10 of the 11  research pools and participating in 6 joint REF2014 submissions, 4 of which were based around pools, reflecting the strength of these collaborations. Although funding for these initiatives is largely complete, the collaborations continue and other major initiatives have drawn on their experience – including the innovation centres, one of which is hosted by Edinburgh. Current and future collaborative ventures are likely to follow the path of addressing challenges, rather than focussing on the discipline level, but these have been excellent opportunities to learn about what works in supporting large scale collaborations.

We are pleased to say that Scottish universities experience few significant barriers to collaborating with UK partners or engaging in challenge led research funding schemes. Scotland punches above its weight for UKRI research funding, gaining roughly 11% of total funding for just over 8% of the population, and Edinburgh is 5th in the Russell Group for winning EU Government funding.[8]

There are two exceptions: low level access to NIHR funding; and the structural regional challenge of the makeup of our local industry which does not fit well with the current Innovate UK funding model. There are some relatively modest sums of money available for grant funding in Scotland which add a stream in specific areas of health and rural/ agricultural research; and specific funding from SFC for innovation. These are helpful additions which do not in our opinion outweigh the losses through reduced core research and innovation funding and lack of access to these other sources.

Our main proposal in relation to research funding would be that there is parity of access to core research and innovation funding across the UK. We are 4th in the UK for innovation according to the figures collected through the Higher Education Business Community Interaction survey[9], but this is not reflected in the level of core innovation funding: we receive £1.5 million through the Universities Innovation Fund[10] (the Scottish equivalent of the Higher Education Innovation Fund (HEIF)). In contrast, comparator institutions in England (eg UCL, Imperial, Oxford, Cambridge and Manchester) receive £4.8 million through HEIF[11]. As the highest quality research receives a higher weighting in the English funding model, we estimate that (since we come 4th in the UK for research power in REF 2014) we receive less through REG in Scotland than we would in English QR. Furthermore, in some years English institutions have received additional QR uplifts not mirrored in Scotland’s REG, which creates a disparity between the levels of core research funding in comparator institutions. We should however recognise that the response to the Covid-19 pandemic from the Scottish Government has been very welcome, under which Scottish HEIs have received a total of £75 million additional research funding to respond to Covid, which is a Scottish Government specific initiative.

In terms of the structures within which research is managed, Research England has a dual function running both national and England-only activities. This relationship could be made even more effective if at least one representative of the devolved nations sat as a permanent member around each table where Research England sits, to ensure that Scottish (and Welsh and Northern Irish) universities’ circumstances continue to be taken into account. The mention of the devolved administrations in the new UKRI corporate plan is helpful, though we would welcome clarity that this specifically includes the HE funding bodies.

One area in which a more sophisticated approach to resourcing could improve access to research for Scottish and Northern English universities is in the siting of major research facilities. The almost routine siting of new science facilities at Harwell or equivalent SE England sites does not take notice of the crucial importance of ‘place’. More diversity in the siting of these facilities would lead to high-value jobs, upskilling and new industries in regions where the need is much greater than in Oxford or London.

3) UK Government policy and how it effects universities, students, employees and research in Scotland

UK Government policy on both devolved and reserved matters inevitably impacts Scottish universities – positively and negatively. The most important aspect of this is ensuring that Scottish sector voices are part of the discussions that inform the policy.

Where there are cross-border implications of policy decisions being taken through English-focused fora, it is important for Scottish voices to be heard. This would help with student choice: applicants’ decisions on where to study within the UK requires them to navigate the different systems, and ensuring that the differences are clearly explained or aligned where practical would minimise the complexity of the landscape. As a current example, the announcement of the NSS review in England in the ‘Reducing bureaucratic burden’ report acknowledged that this crosses borders, but we need to ensure that the Scottish voice is heard within the review. Reduction in unnecessary bureaucracy is always welcomed; we would simply wish to ensure that Scottish universities are part of the conversation as to what replaces it. The UKRI and Research England dual role provide one mechanism where this is helpful.

As immigration policy is reserved, UK Government changes are directly reflected in Scotland’s universities.  The recent, welcome introduction of post-study visas have been followed by increases in applications and accepted offers from countries including India.   We also have a diverse staff complement, with 29% of our staff from outside the UK. Researchers are a highly internationally mobile workforce, and the Global Talent visa will be an important route. However, as a large employer, we have colleagues from many sectors of employment – such as hospitality and cleaning – and we anticipate that staff in these categories may remain affected by the changes in mobility from the EU.

Places caps are a challenging area of cross-border policy with the potential to undermine the devolved nature of Scottish higher education.  We are grateful that the cap on English students attending Scottish HEIs introduced in the spring has been reversed, as it undercut the ability of Scottish HEIs to offer places to the best students and for those students to decide where to study.

The implications of Brexit still leave concerns for all Scottish HEIs. We are working with other universities to build networks and foster research partnerships that create the conditions for new ideas on how to address today’s grand challenges. Edinburgh is proud to be a founder member of the UNA Europa alliance of research-intensive universities led by KU Leuven.  A key benefit of access to Framework Programmes and other EU research funding streams has been the extra incentives created to seek out new partners and foster collaborations across borders. A UK Government funding stream that funds the costs to join in could replicate these benefits. 

Close partnerships between universities also provide an ability for students and staff to move between organisations and increase their cultural awareness, learn new skills and languages and bring new ideas and innovations back to their home institutions, towns and cities. Erasmus+ has been an accessible route to this: the University of Edinburgh is the largest UK recipient of Erasmus+ student and staff mobility funding, with nearly 600 students visiting per year and over 360 outgoing students, and we are delighted to have been awarded €4.1 million to support European and international mobility until May 2023. The Erasmus+ programme is a key component for UoE students on Modern European Languages programmes who are required to spend a year studying/working abroad, and it also provides funding to support them with the extra cost of living abroad.  With this scheme taking us beyond the end of the transition programme, we anticipate that this will give a longer period in which to plan other routes to replace the availability of Erasmus funding, if it is confirmed that this route is no longer open.

October 2020