UNIVERSITY leaders have issued a warning over the future viability of the sector following a cut to funding.

Professor Andrea Nolan, convener of Universities Scotland, said institutions would find it “difficult” to deal with real terms funding decline of 1.79 per cent.

She said: “This returns universities to a series of real terms cuts that the Government stopped last year.

“We understand the Scottish Government is managing a challenging set of public finances, but we’d hoped last year’s decision was the start of a slow climb back to sustainable funding. That’s clearly not the case.”

Ms Nolan said universities were already having to take loans out to cover the cost of vital building developments.

She added: “Loans are a helpful addition, but cannot be a replacement for core funding. There is a limit to our ability to borrow.”

Meanwhile, the Educational Institute of Scotland (EIS) said the draft Budget had failed to address falling pay for teachers.

The union is campaigning for a 10 per cent increase and has threatened strike action to secure its demands.

Larry Flanagan, the union’s general secretary, said a three per cent rise for public sector workers was not good enough, adding: “A failure to listen will force teachers down the route of industrial action.”