The impact of leaving the EU on Scotland's Universities

Leaving the EU could create a £100m+ black hole in the finances of Scotland’s Universities

Brexit could lead to a loss of at least £100m income per annum to Scotland’s universities. A reduction in EU postgrad numbers could fundamentally weaken the capacity of Scotland’s institutions to continue their current research intensity, and also hit research quality. This, combined with a weakening of Scotland’s links to the EU research community, would likely lead to a fall in Scotland’s global research standing.

We all have a stake in the future of our Higher Education institutions. This can be as the educators of our children, as partners in innovation with our businesses, or as originators of the blue sky research that can help our country succeed.

That’s why it is important to start thinking about the effects of Britain leaving the EU on these institutions. In the last few weeks, there has been a lot of discussion based on anecdotal evidence of the effects of Brexit on UK universities. We would like to present some hard data to add to this discussion and help inform the future strategy of UK, and in particular, Scottish Higher Education Institutions.

The outcome of the EU referendum vote in Scotland was very different from the voting profile of the rest of the UK, and there is currently a focus at a political level on ways of retaining the benefits of Scotland’s membership of the EU. One of the key issues is likely to be on the ways EU membership is of value to Scotland’s universities.

We have looked at three important measures that are essential in answering this question:

• The number of EU students registered on first degrees (normally Undergraduates)
• The number of EU students registered as postgraduates and
• The value of EU research income.

*note for discussions below, “EU students” are students domiciled in a non-UK EU member state.

EU undergraduates

The number of EU students studying on first degrees has been growing steadily year on year. There has been a 77% increase between 2007/8 and 2014/15, and the numbers in 2014/15 stood at 13,500. Thus, ten percent of undergraduate students in Scotland are from non-UK EU member states. While the loss of 10% of students at undergraduate level is notable, it would have a relatively small impact that could, with some effort, be made up by recruiting students from other overseas locations.

However, the international undergraduate market is extremely competitive, has a finite pool of potential mobile students, and is one in which the UK and Scotland currently performs well. Attracting higher numbers will require significantly more effort

EU Postgraduates

The picture for EU Postgraduate students is very different. A quarter of the current population of Postgraduate Students originate in non-UK EU member states. Over the past three years, the data shows the numbers have increased by 13%.

Source: Scottish Funding Council

We can draw five conclusions from this:

• At 26% of current postgraduate research numbers, EU students comprise a substantial body of expertise in Scotland’s universities
• EU postgraduates are especially motivated students who relocate to the best opportunities they can find – they are therefore high quality researchers who are attracted by the leading edge, quality research undertaken in Scotland
• Scotland must maintain the quality of its research if it is to continue to attract this talent
• Should Scotland become unattractive to these mobile EU citizens, fewer will choose Scotland as a location, the capacity of Scotland’s research community to maintain its current output will be reduced and this, in turn, will hit its research quality
• This loss of capacity would likely lead to a loss of research momentum and a negative impact on Scotland’s global research rankings.

EU Funded Research

The UK has been very successful in attracting EU Horizon 2020 funding. This is the third area where the Scotland data gives an indication of the impact of Brexit on Scotland’s Higher Education institutions. Horizon2020 is the biggest EU Research and Innovation programme to date (following on from the EU Framework programmes). Nearly €80 billion of funding is available between 2014 and 2020, in addition to the private investment this money attracts.

In 2014/15, Scotland received just under £80M from EU Government Bodies in the form of research grants and contracts including Horizon2020 funding. Other EU income sources (for example, EU charities, EU industry contracts and other EU related support) bring that total to just under £95M: this is the EU contribution to Scotland’s research activity. Combining EU student fee income with EU funded research, we conclude that around £100M is at risk as a result of the Brexit vote.

Other issues to consider

Fundamental research of the kind undertaken at Scotland’s universities is a global activity that is supported by strong and complex global networks. Attracting EU students to Scotland extends its “network-reach”, and increases the likelihood of Scottish institutions being involved in future collaborative research programmes. Scotland’s reputation for quality research has been built over many decades and if it is damaged now, it will take a long time to re-establish.

In future, while the UK may gain access to the EU’s research programmes, they will no longer have representation on the H2020 committees where policy decisions are made and research priorities set. This may result in the direction of H2020 shifting away from areas in which the UK (and Scotland) are strong, thereby reducing their research opportunities. The impact of this change could be very significant.

The financial values presented above are the absolute financial values. They don’t take into account the wider economic contribution to Scotland’s economy of EU students, researchers and principal investigators who live in Scotland during the course of their studies or their contracts. Given these people are living away from home, they spend more than their Scottish peers. We would also note that the analysis does not take account of locally based firms that are engaged (to supply equipment, undertake clinical trials etc.).

Conclusion

Brexit could lead to a loss of at least £100m income to Scotland’s universities. EU undergraduates account for around 10% of Scotland’s total, while postgraduates account for a quarter. A reduction in EU postgrad numbers could fundamentally weaken the capacity of Scotland’s institutions to continue their current research intensity. This, combined with a weakening of Scotland’s links to the EU research community, would likely lead to a fall in Scotland’s global research standing.

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