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New research exclusive to Holyrood shows that public investment in universities in Scotland is significantly lower than in Nordic countries. 

Since the mid-70s, the average spend per student in Scotland has decreased by about 50 per cent, the research by an independent expert reveals. Meanwhile Denmark – which does not charge top-up fees and spends a greater percentage of its GDP on education – has increased its average spend per student by some 15 per cent since the mid-90s.

If adjustments for differences in cost of living are made, according to the Organisation for Economic Cooperation and Development, in 2004 Scottish universities received $2000 per student less in real terms than their Danish equivalents.

The research, which compares public investment in higher education in Scotland with that in Denmark, Finland, Sweden and Norway, was conducted by Dr David Silbergh of Caledonian Business School. It reveals a large gap between Scotland and its Nordic neighbours – small independent countries that the SNP Government regularly refers to as models for best policy.

This comes just ahead of the final report of the Joint Future Thinking Taskforce on universities - between the Scottish Government, the Scottish Funding Council and universities – expected to be published this week. The group was established last year, following a disappointing budget settlement for the sector, to review how universities engage with government and crucially, how they are funded.

Despite low levels of public funding, Scotland’s university sector is one of the most efficient in Europe with robust quality systems and quality student support,according to Silbergh. However, the squeezed state of the sector may not be sustainable, he warns: “The scale of the discrepancy in funding may, however, ultimately limit Scotland’s ability to become a genuine knowledge economy, based around our universities.”

Silbergh puts the funding gap in stark terms and lays down a serious challenge for the Government. Writing in Holyrood, he argues: “Overall, Scottish universities have coped with lower levels of funding than competitors in the Nordic countries for many years. The sector is efficient and effective, producing greater output of higher quality for lower inputs from the public purse than competitor systems.

“We are, however, seeing evermore signs of over-trading in the sector, and have reached a crossroads.  Serious questions are now being asked in the Scottish university sector as to whether outputs of truly international note can be sustained in the long term.

“What way do we go from here? Will we decide to invest in our universities or to divest from them? Now is the time to make such a decision – the sector cannot get any more efficient, it cannot easily raise more private funds than it does already. Are we truly aiming to become a knowledge economy,or will a stripped-down, low-cost model represent the future? The people and the economy of Scotland have derived many benefits from its universities over the centuries, but one can only run a Rolls Royce with the engine of a Mini for so long. It is time for the principal decision-makers to decide what the future will be like.”