Some of Scotland’s research-intensive universities could face a double blow to their bottom lines as uncertainty over the potential impact of Labour’s £6,000 tuition fees policy in England follows a shake-up of research funding.

Thousands of rest-of-UK undergraduates currently pay fees of up to £9,000 annually to institutions north of the border.

But Labour’s announcement that it would lower fees to £6,000 in England if it wins power in May’s general election has led to fears that Scottish universities would also have to cut their tuition charges.

Any such move would be felt most acutely in elite institutions that currently attract large numbers of English students. The University of Edinburgh had 5,680 undergraduates from the rest of the UK in 2013-14. Losing £3,000 per student on a population of this size would mean a drop of £17 million a year.

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The University of Glasgow admitted 778 first-year undergraduates from the rest of the UK in September. Although it charges for only three years’ tuition and gives a discount for the first year, it could still lose out on more than £7 million across its full student population annually.

The University of St Andrews’ shortfall could equal its 2014 surplus of £5.6 million, according to in its latest accounts.

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Labour has indicated that public funding would be used to compensate English universities for the lost fee income, so Scotland could expect a large payment under the Barnett formula that determines its share of taxpayer funding from Westminster.

But Ferdinand von Prondzynski, principal and vice-chancellor of Robert Gordon University, said that passing that money on to universities amid constraints on public funding “would not be an easy option” for the government. The impact of £6,000 fees on some institutions could be “immediate and serious”, he added.

Sheila Riddell, professor of inclusion and diversity at Edinburgh, said extra government subsidies could lead to the imposition of a cap on numbers of rest-of-UK undergraduates at a time when the pool of Scottish 18-year-olds is shrinking. She also warned that sharing the money would be complex and there was “no guarantee that more money would come into the coffers of the institutions that are recruiting quite high numbers of students from the rest of the UK”.

Research funding reallocation

The concerns come as a reorganisation of quality-related research funding by the Scottish Funding Council cut grants for 2015-16 by £12.9 million and boosted spending on newer institutions at the expense of several “ancient” universities.

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Edinburgh has been hit particularly hard, losing £7.7 million in 2015-16, rising to £13.9 million annually by 2017-18.

The reallocation reflects the halting of Scotland’s global excellence initiative, which provided £14 million for world-leading research across the country, and the improved performance of newer institutions in the research excellence framework. In addition, the SFC adjusted the ratio of funding between research rated as world-leading (4*) and internationally excellent (3*) from 3.11:1 to 3:1.

Edinburgh was rated fourth in the UK for research power in the REF, and Charlie Jeffery, its senior vice-principal, said that this “doesn’t seem to me like a performance that should be penalised”.

But Steve Chapman, principal and vice-chancellor of Heriot-Watt University, said there would inevitably be losers at a time of improved overall performance and financial restraint. Heriot-Watt will get an extra £1.5 million a year by 2017-18. “In terms of allocation, the formula seems very fair,” he said. “In terms of the total amount available, it’s regrettable.”

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chris.havergal@tesglobal.com