Edinburgh University warns of ‘painful’ cuts in effort to ‘remain financially sustainable’

Edinburgh University has released its annual financial report for the last academic year, warning that “painful” changes are needed to address ongoing economic challenges faced by the institution.

The report reveals that the university’s total earnings before interest, tax, and asset depreciation fell to £84m, almost half of the £148m earned the previous year. The university’s surplus before other gains and losses, excluding pension-related adjustments – essentially any money leftover – fell to a mere £25m, down from the £104m.

The report also confirms Principal Sir Peter Mathieson’s salary increase from £348,000 to £362,000, as well as an additional payment in lieu of employer’s pension contribution, rising from £37,000 to £40,000, bringing his total remuneration this year to £422,000, the Scotsman reports.

Sir Peter Mathieson attributed the university’s spike in spending to “international student recruitment, […] increasing staffing costs, utility costs, the impact of inflation and supply chain issues”.

The principal also highlighted an inadequacy in funding for Scottish and other UK students as a significant challenge for the institution, reflecting a broader struggle across the nation’s higher education sector as it faces pressures from inflation, changes to pay in response to the cost of living crisis and the UK government’s recent decision to increase employer’s National Insurance contributions.

Old College

In an effort to tackle the university’s financial struggles, the principal announced in November a new voluntary redundancy scheme would open at the university. While the university neglected to rule out out compulsory job losses, the principal stressed the need to “seize strategic opportunities” to maintain financial stability, acknowledging that the necessary changes could be “difficult and potentially painful.”

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The report follows the recruitment of new interim finance director Nirmal Borkhataria, a self-described “turnaround specialist”, joining the university last year amid staff concerns about the growing number of employees earning over £100,000 and Sir Peter’s pay increase.

In Edinburgh, Queen Margaret University reported a £3.125 million surplus, up from £162,000 the previous year, while Heriot-Watt University reported a £10.5 million deficit.

Sir Peter Mathieson issued a statement, attesting: “As a major employer with significant and diverse income streams, we take our fiscal responsibilities incredibly seriously.

Cover image via YouTube