SCOTLAND’S universities need to be handed a “reliable, sustainable funding settlement to help institutions recover from the Covid-19 pandemic, the industry body has warned.

Universities Scotland, which represents institutions, has called for “maximum support” for the sector with debt now soaring to record levels.

The organisaiton is calling on the Scottish Government to make “rapid progress towards sustainable funding of every Scottish-domiciled student” amid the Scottish Funding Council, (SFC), stressing that the country’s higher education sector is facing an overall estimated deficit of £176 million in the 2020-21 academic year.

Universities Scotland said this week’s UK Government Spending Review failed to set out clearly how much money will be available for higher education north of the border via either additional money announced for research or the Shared Prosperity Fund.

With the end of the Brexit transition period also looming at the end of December, the organisation stressed the 2021-22 Scottish budget will be “critical” to the future of higher education.

Professor Gerry McCormac, the convener of Universities Scotland and principal of the University of Stirling, said that Finance Secretary Kate Forbes' draft budget must make progress towards sustainable funding.

He added: “If that cannot be achieved in one leap, we look at least for complete reversal of the £750 per student real-terms erosion in funding since 2014-15.”

It has estimated the public funding of university teaching in 2018-19 was £157 million below the full cost of providing this – with university research only funded at 80 per cent of cost.

Prof McCormac stressed “Scotland’s recovery from the Covid-19 pandemic will be education-led”.

He said: “We owe it to our young people to provide maximum support and ensure they have the best educational experience possible in the years ahead.

“To do this, universities need to recover from the financial shock and receive a reliable, sustainable funding settlement from the Scottish Government.

“We are ambitious for Scotland and want to fully contribute to the recovery but the next budget from the Scottish Government will be critical in terms of addressing the major gaps in higher education funding.”

Prof McCormac said it is “regrettable that with only days to go” until the the full impact of Brexit is felt when the transition period ends, universities “still have no clarity over our future research relationship with the EU, nor do we know if we will be members of the Erasmus student mobility scheme”.

He added: “Whilst we welcome the commitment that all EU funds will be covered, the lack of detail around the Shared Prosperity Fund is of concern."

“The value of university research has never been more evident than during this pandemic.

“We need further progress towards research being funded at full cost so that Scottish universities can continue the world-leading research and innovation that will build a sustainable recovery.”

He added: “As we move out of the deep crisis caused by the global pandemic, we need to rebuild our capability to create more jobs, enhance social services, restore living standards and build an even more inclusive society.

“Investment in universities does that.”

A Scottish Government spokesman said: “The lack of clarity from the UK Government about whether there will or will not be a deal with the European Union and the lack of clarity about EU-related funding in this week’s UK Government Spending Review creates significant uncertainties for our universities and colleges.

“We remain clear and consistent in our position that we expect full replacement of EU funds to ensure no detriment to Scotland’s finances and we expect the UK Government to fully respect the devolution settlement in any future arrangement.

“We know our universities and colleges face significant challenges as a result of the pandemic and we are working closely with them to mitigate the effects of the crisis.”

He added: “Our Further and Higher Education Sustainability Plan highlighted the steps we have taken to support higher education, including allocating £75 million to protect world-leading research and £10 million for estates development.

“The Scottish Funding Council works closely with institutions to monitor their financial health.

“We are grateful to Universities Scotland for their thoughts on the funding needs of the university sector.

“This will help inform our thinking in relation to the needs of the university sector as part of the 2021-22 Scottish budget.”