SCOTLAND’S universities must play their part in adapting to the “new normal” amid warnings that institutions could be forced to merge in return for government support.

Universities have warned they face severe financial gaps unless they are propped up - but institutions have been urged to show a willingness to adapt to a new way of working.

The principal of a leading Scottish university has warned that governments should not merely hand out "a blank cheque to temporarily plug financial gaps" but has instead called for institutions to embrace an overhaul of how higher and further education is provided in Scotland going forward.

Professor Anton Muscatelli, Principal of Glasgow University, has also been appointed to the Scottish Government's advisory group on economic recovery. He wants universities to set out a new way of working amid the Covid-19 pandemic.

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Professor Muscatelli said: "For universities as with every other sector, there is no longer a status quo - and any calls for additional public funding need to make a virtue of this fact. We require new investment not to maintain old standards but to react and reform in the face of global change."

He added: "We need to demonstrate a willingness to change in order to ensure we are best able to make a success of the new situation we are going to find ourselves in, and align ourselves even more closely with societal need. But we also need to be clear that the new success we seek isn't just for our own sector - it is for Scotland, and our universities are only part of that."

Professor Muscatelli has warned that a return for austerity cannot be an option, while tuition fees must not be introduced for Scottish students in response to the financial pressures.

He said: "Anything that would stand in the way of allowing universities to provide this social good - such as a reduction in funding - should be resisted. Equally, anything that would raise new barriers to young people in Scotland taking advantage of their right to higher education - such as a reimposition of tuition fees - should be dismissed with equal vigour.

"The arguments of austerity will not work if we want to see a genuine recovery that works for all."

Last week, Universities Minister Richard Lochhead confirmed that “the Scottish Government is ready to stand by universities”. He added that he was "exploring every avenue we have available to us to support our universities to get through this".

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Scottish universities have an income of almost £4 billion a year - with around half from the Scottish and UK Governments. Around £1 billion is tallied up in fees from non-EU students and from other parts of the UK.

Universities are drawing up plans to adapt in the short term, which could see a start to the next academic year delayed until January, while a "blended learning" format could include courses being delivered partly online with some on-campus tuition with social distancing measures put in place.

But concerns have been raised that universities being asked to merge could become inevitable if institutions fail to come up with transformational plans.

Labour MSP Daniel Johnson, deputy convener of Holyrood's education committee, has warned that some universities could financially fail if they are not propped up.

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He said: "The thing we need to avoid is a knee-jerk reaction for universities to merge. Mergers do not necessary give you the benefits you think they will and come at a lot of cost and disruption.

"There are also questions over whether the Scottish Government can afford to bail them out - the price tag could be £1 billion."

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Mr Johnson is calling on the Scottish Government to give universities some short-term support.

"Without that, the institutions will find themselves running out of cash by September or October," he added.

"The institutions need to form what they can do in return. They will need to take a very close look at their balance sheets, what assets can they liquidate and what things can they stop doing.

"It’s much better that they come up with a plan than it is imposed upon them by government."

Some universities are more reliant than others on international students as a key part of their business model. Heriot-Watt University, for example has around 300 Chinese students and also has campuses in Dubai and Malaysia.

Mr Johnson added: "The Scottish Government does not wholly fund undergraduate tuition - they partly fund it and the rest is to be made up by institutions, largely subsidised from overseas students.

"I think it’s imperative the Scottish Government acknowledges that and comes forward with emergency funding.  

"We cannot just stand idly by and watch them struggle."

READ MORE: Coronavirus in Scotland: St Andrews University warns of £25m funding 'black hole'

Yesterday, principals from Scottish Universities discussed a way forward and a need to be part of the solution to the pandemic.

Convener of Universities Scotland, Professor Andrea Nolan, said: “Universities have played a major role in the response to the current crisis, acting with pace and commitment to meet the urgent public health need.

"We have worked effectively and sensitively with our partners to make plans with professional and regulatory bodies to accelerate the qualification of hundreds of medics, nurses and paramedics to join the frontline in the NHS, adding vital capacity to the workforce.

"Fifteen universities are leading 50 rapid research projects linked to Covid-19 and understanding its impact on some of our most vulnerable people, which will deliver results that Scotland can act on within just a few months. The Lighthouse testing lab, involving a university and multiple partners, was developed from concept to turning around tens of thousands of tests a day in just a matter of weeks.

"This crisis has shone a light on how closely connected our higher education and heath sectors are, and the alignment and responsiveness of universities to societal need."

She added: “Universities face a vast financial challenge as a result of the impact of the pandemic, on a scale that will need a serious response from both Governments to get us through. Looking ahead, and in common with everyone else, universities are looking at a new normal rather than a return to normal.

"Higher education will take this fundamental disruption to what we do and how we do it as an opportunity to reflect, take the learning from our experiences during the pandemic, and redesign so that we can offer individuals, and society and the economy at large, a future beyond the pandemic that goes beyond rebuilding and aspires to support and serve Scotland to improve outcomes for all its communities.”