“I have been open about the severe financial difficulty our University, and the wider sector, is facing. Today (Tuesday 25 February), my senior team and I have announced how we will address these issues. We are currently forecasting to be in operational deficit in forthcoming years, and this must be reversed for us to sustain our position as a world-leading institution.
“The size of the financial gap that we need to close over the next 18 months is about 10 per cent of our annual turnover – a similar percentage to that of many other universities. This has to be a recurring and sustainable reduction in our costs. For us, this is of the order of £140 million. To put this into context, it costs around £120 million a month to run the University of Edinburgh.
“To make these recurrent savings, we need radical University-wide actions, which will lead to a smaller staff base and lower operating costs. We are also reviewing all capital expenditure – including previously approved projects – with a renewed lens of affordability. There will be five workstreams to deliver the required changes, aiming to restore the University to a secure sustainable position by financial year 2026/27.
“This news is understandably difficult, however tough decisions and bold actions are required for us to continue delivering an excellent education for our students and to change the world for the better with our research. We will continue to inform and support colleagues throughout this process, and liaise with respective unions.
“There are several coinciding factors that have brought about the circumstances our sector is now reckoning with, many of which I have warned of publicly and privately for a number of years in a bid to abate this situation. These factors include years of income for teaching not rising in line with costs, steeply rising utilities prices, inflation, recent unexpected announcements on National Insurance Contributions, and rise in employment costs: these have all contributed to the fragility of the sector’s finances. Moreover, across the UK, we are facing a reduction in the attractiveness of the UK as a destination for international students.
“However, since it was founded in 1583, the University of Edinburgh has always adapted to – and help shape – the world around it, and this moment is no different. Changes will be made, but we will emerge as a stronger institution that will continue to have a huge, positive influence on society for centuries yet to come.”
Professor Sir Peter Mathieson
Principal and Vice-Chancellor, The University of Edinburgh