Scottish Week: universities and skills

This is the fifth blog in HEPI’s Scottish Week. It was kindly authored by Professor Steve Olivier, Principal and Vice-Chancellor, Robert Gordon University (@SteveOlivier9).

Read the first blog in the series here, the second blog here, the third blog here, and the fourth blog here.

As Scotland approaches a parliamentary election, a new chapter appears to be opening in the debate around the sustainability of our university sector. Many of the pressures north of the border will be familiar to those working in the sector across the UK. In Scotland, our costs have risen significantly in recent years; universities have been reliant on volatile international tuition fees to subsidise both teaching and research; and our estates face an estimated £850 million backlog simply to reach a ‘satisfactory’ condition. However, the challenges in Scotland have been more acute in some respects, in part due to the financial model. The teaching grant has fallen by more than 20% in real terms in the past decade, with per-student public funding in Scotland remaining around 24% lower than in England.

The recent announcement that a joint framework was being launched by Universities Scotland and the Scottish Government on the Success and Sustainability of Scotland’s Universities – with cross-party support – was therefore extremely important. It is right and overdue that we take a considered look at long-term options. As we await its conclusions in the Autumn, we should also be clear about the outcomes Scotland needs from its universities.

At Robert Gordon University (RGU) in Aberdeen, we see our role slightly differently from some of our more research-intensive peers. Scotland undoubtedly benefits from globally competitive research-intensive institutions, but our economic future also depends on universities that are deeply embedded in professions, industries and regional economies – universities that integrate learning with work.

The demand for higher-order skills is rising rapidly. By 2035, 86% of new jobs in Scotland are projected to require graduate-level skills, with almost 900,000 graduates needed to fill those roles. At the same time, demographic change means fewer young entrants to higher education.

These trends point to a simple conclusion: Scotland cannot meet its future skills needs solely through young people entering full-time degrees directly from school. We must plan our post-16 system on the assumption that most people will engage in tertiary education multiple times across their lives.

This is where RGU’s distinctive contribution lies.

We have a long-standing commitment to professionally focused education, co-designed by employers. Work-based learning is embedded across our programmes. We are ranked among the UK’s top institutions for career prospects. We are the largest provider of graduates to NHS Grampian and play a critical role in workforce development across energy, digital and public services in the north-east of Scotland.

Our ambition is to be the UK’s leading work-integrated university: embedding industry collaboration, applied learning and real-world skills across all provision. However, the policy and funding architecture must evolve if Scotland is to develop this approach at a greater scale.

We talk a great deal about lifelong learning. Structurally, however, we are still funded by what feels like a ‘one crack of the whip’ model: a system designed primarily around full-time school-leaver entry. Adult returners, part-time learners and mid-career professionals often encounter financial and structural barriers that do not reflect the realities of modern working lives.

If most people will need to retrain during longer careers, we should consider establishing a system-wide planning assumption that, for example, 80% of the population will access tertiary education during their lifetimes. 

This would not be about expanding traditional full-time degrees alone. It would mean building flexible, modular and work-integrated pathways; seamless articulation between colleges and universities; credit accumulation and transfer that genuinely works; and apprenticeship models that are responsive to employer demand.

Graduate Apprenticeships (GAs) in Scotland, which provide work-based learning opportunities up to a Master’s degree level for new and existing employees, are a strong example of what can be achieved. RGU is one of the leading providers of GAs in Scotland. However, the current GA frameworks (i.e. subject areas) are rigid and slow to adapt to industry needs. If Scotland wants GAs to play a central role in delivering future skills, we should open up what ‘counts’ as a GA and enable universities to co-design new work-based degrees with employers at pace.

Funding reform must also consider capital and infrastructure. Expecting institutions to modernise infrastructure, expand skills provision and sustain research capacity while absorbing a decade of real-terms funding decline is not realistic. In the short term, universities’ access to Financial Transactions low-cost loans should be reinstated to enable them to invest in estate maintenance, digital upgrades and decarbonisation projects.

We need clarity about what the higher education system is being funded to deliver. Is the primary purpose educating school leavers? Driving economic productivity? Advancing research excellence? Supporting lifelong learning? Enabling regional development?

In truth, it is all of the above. But the current funding model supports some of these objectives far more effectively than others.

A multi-year financial framework for universities, aligned to clear strategic outcomes, would provide the stability needed to innovate. Alongside this, there is a strong case for a dedicated applied research and knowledge exchange fund to strengthen collaboration between universities, colleges and SMEs – particularly in place-based innovation ecosystems outside the central belt of Scotland.

Finally, fair access must evolve alongside system reform. Scotland has made significant progress, but we need individual-level indicators of disadvantage and a unique learner number to track outcomes across the learner journey. If we want a high-productivity, inclusive and resilient economy, we need a funding and policy framework that recognises the full diversity of Scotland’s universities and empowers them to play to their strengths. The forthcoming parliamentary term offers the opportunity to do just this.

Want to understand more about Scotland and higher education?

In 2024, to mark 25 years since the devolution of powers to Scotland, Wales and Northern Ireland, HEPI and The Education Group London published the collection of essays ‘Evolution of Devolution‘. It provides a comprehensive analysis of how higher education policies in England, Scotland, Wales and Northern Ireland have evolved over the past quarter of a century.