Edinburgh University announce staff cuts as part of cost cutting measures to save £140m

Edinburgh University has announced staff cuts will be made in response to “severe difficulty” with the institution’s finances.

In a letter to staff, titled securing the long-term future for our university, Principal Sir Peter Mathieson said that cost saving actions to plug a £140m budget gap will lead to a smaller staff base.

He outlined rising utility prices, inflation, national insurance contributions, and rise in employment costs as the reason for the cost cutting decision.

It comes after staff were previously told in the summer that the university “would reduce spending in all areas” due to funding issues and that the closure of some university programmes or schools would have to be considered.

Edinburgh, founded in 1582, is one of the four “ancient” universities in Scotland and boasts links to 20 Nobel Prize laureates among its alumni – alongside current First Minister John Swinney and former Prime Minister Gordon Brown.

The principal’s letter to staff reads: “I have been open about the severe financial difficulty our University, and the wider sector, is facing. Today, my senior team and I have announced how we will address these issues.

“We are currently forecasting to be in operational deficit in forthcoming years, and this must be reversed for us to sustain our position as a world-leading institution.

“The size of the financial gap that we need to close over the next 18 months is about 10% of our annual turnover – a similar percentage to that of many other universities. This has to be a recurring and sustainable reduction in our costs. For us, this is of the order of £140m. To put this into context, it costs around £120m a month to run the University of Edinburgh.

“To make these recurrent savings, we need radical University-wide actions, which will lead to a smaller staff base and lower operating costs. We are also reviewing all capital expenditure – including previously approved projects – with a renewed lens of affordability. There will be five workstreams to deliver the required changes, aiming to restore the University to a secure sustainable position by financial year 2026/27.

“This news is understandably difficult, however tough decisions and bold actions are required for us to continue delivering an excellent education for our students and to change the world for the better with our research. We will continue to inform and support colleagues throughout this process, and liaise with respective unions.

“There are several coinciding factors that have brought about the circumstances our sector is now reckoning with, many of which I have warned of publicly and privately for a number of years in a bid to abate this situation. These factors include years of income for teaching not rising in line with costs, steeply rising utilities prices, inflation, recent unexpected announcements on National Insurance Contributions, and rise in employment costs: these have all contributed to the fragility of the sector’s finances. Moreover, across the UK, we are facing a reduction in the attractiveness of the UK as a destination for international students.

“However, since it was founded in 1583, the University of Edinburgh has always adapted to – and help shape – the world around it, and this moment is no different. Changes will be made, but we will emerge as a stronger institution that will continue to have a huge, positive influence on society for centuries yet to come.”

Dundee University also proposed job cuts as it seeks to address a £30m funding gap, but the UCU lecturers’ union has voted to go on strike to oppose these.

The chief executive of the Scottish Funding Council has suggested Dundee could receive financial help in order for it to “survive and thrive”.