St Andrews University is facing its most serious crisis in modern times after principal Sally Mapstone announced a £25 million black hole in its finances and warned further losses are likely.
Education institutions across Scotland are facing huge drops in funding as a result of the pandemic as students, staff and partner businesses stay at home to stop the spread of the virus.
In a letter to staff and students on Thursday, Professor Mapstone laid out the scale of the challenge facing St Andrews and called on the Scottish Government to provide “urgent and substantial aid” for universities.
St Andrews has been struck all at once by a loss of research grants, lack of conferences and the decision to release students from their accommodation contracts.
Prof Mapstone said the university is now facing “very difficult choices” about its future.
She wrote: “You will all have seen, and in many cases be personally familiar with, the profound economic effects of this crisis. We are protected from so much in St Andrews, but not this.
“I need to make you all aware that, as a result of the Covid-19 pandemic, the university is already facing a hole in our financial position of over £25 million this year.
“This is largely made up of losses in research grants through the lockdown period, the loss of conference and accommodation rentals over the summer, and our decision to act in a socially responsible manner by being one of the first universities in the UK to release students from their accommodation contracts.
“It does not take account of further losses to revenue which we would reasonably anticipate incurring as the global Covid-19 crisis continues.
“It is as serious a financial crisis as our university has faced in modern times, and it will mean that we cannot do everything you want or expect us to, and that we have to take some very difficult decisions about our future.”
While university bosses are confident its finances can be brought back under control, it is understood discussions are ongoing about whether a number of projects and plans may need to be temporarily held back.
All major capital projects have been paused and the university’s strategic plan up to 2023 will be reviewed in light of the issue.
Prof Mapstone said she had made a “strong case” to the UK and Scottish Governments alongside principals and vice-chancellors from other institutions for an aid package “founded on the premise that universities are, and will continue to be, a major part of the solutions to this crisis, and engines of the economy when the recovery comes.”
She added: “We welcome the fact that the Scottish Government has acknowledged the scale of the financial crisis facing HE in Scotland, but we should not assume that aid will be forthcoming, or in the quantities that we require, given the devastation and raw need we are witnessing in other key sectors of our economy, and society.
“Let me be very open with you: there is no magic pot of money in St Andrews. We must plan to do this by ourselves, with what we have at hand.”
Education secretary John Swinney said he had assured university representatives the Scottish Government will do everything possible to ensure Scotland’s institutions remain world leaders in the wake of Covid-19 disruption.
At a meeting with Universities Scotland, Mr Swinney acknowledged the vital work of universities in the current crisis and the impact it was having on staff and students.
He said: “The scale of the financial challenges facing higher education institutions are clearly very serious and, in order to inform the development of a package of support from the Scottish and UK Governments, ministers will work closely with the sector on how our universities can remain at the forefront of global education when we emerge from this crisis.”
Professor Andrea Nolan, convener of Universities Scotland, said: “We welcome the urgent attention the Scottish Government has given to understanding the range of financial challenges facing universities as a result of Covid-19.
“We won’t know the full financial impact on our universities for some time but it’s clear that it will be very significant and without a major financial intervention from the UK and Scottish Governments, the future of Scotland’s universities is at risk.”
