Skip to main content

Language: English / Gàidhlig

Loading…

Seòmar agus comataidhean

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

Criathragan Hide all filters

Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 21 April 2025
Select which types of business to include


Select level of detail in results

Displaying 1495 contributions

|

Education, Children and Young People Committee

Pre-budget Scrutiny 2025-26

Meeting date: 12 June 2024

Michelle Thomson

Good morning, and thank you for joining us. I want to follow up on what was a slightly technical discussion earlier with Professor Iain Gillespie. The framing was that some people have said that institutions in Scotland are at risk of failure. My colleague Willie Rennie and I asked Professor Gillespie a number of questions, and he explained that he thought that—this is in my words—the probability of that was low because of the prudent nature of their gearing or debt to fee income ratio, which is set to 30 per cent.

My first question is a quick one. Is that limit set by you, or is it in the universities’ articles of association? Why is there such a prudent regime in Scotland compared with what is happening with universities in the rest of the UK?

Education, Children and Young People Committee

Pre-budget Scrutiny 2025-26

Meeting date: 12 June 2024

Michelle Thomson

I am labouring the point because, until the issue came up this morning, I had heard a narrative that was about the UK university sector. If you look at the question from a financial perspective and consider Scotland’s level of average gearing, which I did after the first session, the risk in Scotland is utterly and fundamentally different from that in the rest of the UK. It is therefore not true to say that the risks to institutions in Scotland are the same.

Thank you for clarifying the role of university courts. Does the Scottish Funding Council set fiscal rules for colleges in respect of the attitude to debt and deficit? I want to understand that point, too.

Education, Children and Young People Committee

Pre-budget Scrutiny 2025-26

Meeting date: 12 June 2024

Michelle Thomson

That leads to my next question, which is on what I would term fiscal flexibilities for colleges. We have heard a lot of talk about our being stuck in a trap as more money is needed at a time when we know that the wider financial environment is challenging. What is your thinking in relation to fiscal flexibilities, particularly for colleges, especially given that they are public sector bodies? Are you discussing and considering those issues?

Education, Children and Young People Committee

Pre-budget Scrutiny 2025-26

Meeting date: 12 June 2024

Michelle Thomson

Yes—that is part of the issue. What sort of non-financial support would you benefit from getting from the Scottish Government? As this is a pre-budget session, we are terribly focused on the finance, but are there areas where you would like to see more non-financial support? I perhaps alluded to that by mentioning fiscal flexibilities, but there could be other areas as well.

Education, Children and Young People Committee

Pre-budget Scrutiny 2025-26

Meeting date: 12 June 2024

Michelle Thomson

Yes, of course.

Education, Children and Young People Committee

Pre-budget Scrutiny 2025-26

Meeting date: 12 June 2024

Michelle Thomson

You make a fundamental point about gearing that I do not think has been understood in this legislature from a financial perspective, so thanks for that.

To follow on and finish that thread, perhaps Shona Struthers could comment on the process for monitoring, be that in relation to the SFC or indeed the Scottish Government, if something needs to be highlighted. Will you talk us through the process for risk assessment of financial viability? Can I assume that that is happening on an on-going basis? After all, you are running businesses and you will be applying the usual measures. If I am not correct on that, please put me right.

Education, Children and Young People Committee

Pre-budget Scrutiny 2025-26

Meeting date: 12 June 2024

Michelle Thomson

Exactly—the financial element has been put across very clearly.

Education, Children and Young People Committee

Pre-budget Scrutiny 2025-26

Meeting date: 12 June 2024

Michelle Thomson

If you do not mind, I will come in before we move on to that issue. I want to be clear in my mind about the prudent regime that Iain Gillespie outlined. Is that set by the Scottish Funding Council? If we leave aside the risk profiling that commercial lenders undertake, do you set that prudent regime?

Education, Children and Young People Committee

Pre-budget Scrutiny 2025-26

Meeting date: 12 June 2024

Michelle Thomson

You have been very clear, thank you. I have one last wee question to finish off this section. We have heard a lot of chat in recent months about possibly encouraging Scotland to move to a fee model for universities, similar to what applies elsewhere. However, purely from a business perspective, I was staggered when I went away this morning and looked at the perilous state of some English universities—despite the fee model—because of the gearing ratios. The situation does not seem quite as simple when we start to look at the financial provisioning of education.

How actively are you having conversations with the Government to almost look afresh at how we all get a bit of something that we want, such as flexibility? I appreciate that you have mentioned multiyear funding, which is, rightly, a common refrain. How active are the discussions, not just in your tripartite group? Is there the same sense of urgency?

Education, Children and Young People Committee

Pre-budget Scrutiny 2025-26

Meeting date: 12 June 2024

Michelle Thomson

Good morning and thank you for joining us. I hear what you are saying very clearly, Professor Gillespie. The probability of that risk occurring—that is, an institution failing due to cash-flow shortages or some other financial issue—is low. I am just putting that on the record. Is that correct?