Scotland’s independent think tank
Scotland’s independent think tank

It’s time to rethink Scotland’s ‘free’ higher education system

This article by Alison Payne first appeared in The Times on 26 December 2023.

he stark financial situation we are facing in Scotland needs to reignite the debate about whether, in such circumstances, we should be offering so many tax-payer funded universal benefits.

One such area that is badly in need of review is higher education funding.

In her budget statement, the deputy first minister said she was “protecting free tuition”.

It may be true that there are no university tuition fees, but there is a cap on student numbers. And while more Scots are going to university, places are unable to keep up with demand — between 2006 and 2021 there was a 56 per cent increase in applicants, but an 84 per cent increase in the number refused entry.

With the government funding Scottish places, those places are limited, and as supply isn’t keeping up with demand, many Scots are finding it harder to get into top Scottish universities.

It is not that places don’t exist, it is increasingly the case that students from the rest of the UK or overseas are accepted on to courses in Scotland while their Scottish counterparts are denied. And it is likely to get worse.

In its analysis of the budget, the Fraser of Allander Institute noted: “The Scottish Funding Council sees its funding permanently cut by over £100 million, and this will include reductions in first year university places for Scottish-domiciled students.”

More people want to go to university, but the fiscal arrangement is holding ambition back.

This is why Reform Scotland believes that the current funding arrangements are unfair and unsustainable. There needs to be a better balance between the individual graduate and taxpayers, with graduates contributing towards the cost of their tuition through a deferred fee, to be repaid once they earn more than the Scottish average salary.

However, introducing a graduate fee would not necessarily mean an end to ‘free’ tuition. Rather it provides an opportunity to look at the skills gaps that exist in Scotland and the possibility of developing schemes which cut or scrap repayments for graduates who work in specific geographic areas or sectors of Scotland for set periods of time.