Education and Skills Committee

Meeting date: Wednesday, November 18, 2020

Official Report 670KB pdf

---

Impact of Covid-19 on Further and Higher Education

The next agenda item is an evidence session on the impact of Covid-19 on further and higher education and higher education funding. I welcome Karen Watt, the chief executive of the Scottish Funding Council, and Richard Lochhead MSP, the Minister for Further Education, Higher Education and Science in the Scottish Government.

I invite the minister to make a short opening statement.

I hope that the committee can hear me. I thank the committee for the opportunity to give evidence.

We are all aware that, since we last met, in September, much has happened in our higher and further education sectors. Our colleges and universities, unions, skills agencies and public bodies have worked with determination, commitment and resilience to prepare for and then start the new academic year, and young people have responded, first by enrolling in huge numbers in college and university courses and then by overcoming the many challenges of their very different learning environments.

Together, we have all been working to address the impact of Covid-19 across a variety of fronts. Our universities and colleges have worked hard to ensure the safety of staff and students while on campus and in student accommodation. Yesterday, it was announced that further restrictions would be in place for some areas. It is important that, whatever level of restriction institutions find themselves in, their students have the opportunity to continue with a high-quality learning experience and that student wellbeing and development is supported.

Turning to the end of term, my statement last week set out the work we have been doing with the sector and with student bodies to provide students with the opportunity to return home to their families if they wish to do so. We will ensure that all students are able to return home at the end of this term and will not be prevented from doing so by any travel restrictions that are in place in their areas.

We are also approaching the end of the European Union exit transition period, with the uncertainties and losses that will potentially bring. We continue to press the United Kingdom Government hard for information on plans and funding for any on-going horizon 2020 participation or replacement programmes.

At a time when the UK is on the brink of economic recession with the predicted high levels of youth unemployment, we are taking a range of other measures, including increasing the number of funded places for eligible students at our universities. The total number of additional entrants will not be known until early next year, but current estimates are that around 1,500 students have been accepted to a Scottish university as a result of the move to teacher-assessed grades for 2019-20.

It is testament to the success of Scotland’s higher education system that, in the middle of a global pandemic, significant numbers of students continue to arrive from overseas.

In all of that, the wellbeing of our students remains crucial. With the Scottish Funding Council, we are recruiting more counsellors in our institutions and extending the National Union of Students Scotland’s think positive project on mental health support.

Another positive development was the launch of the young person’s guarantee on 5 November. That investment of £60 million recognises the enormous challenges that face our young people. As we all know, colleges support community cohesion and meet the needs of skills provision at all levels. In recognition of that, colleges will receive £10 million from the young person’s guarantee, in order to support the reskilling of Scotland’s workforce and provide young people with positive opportunities.

Similarly, in October, ministers launched the national transition training fund, by investing £25 million to support people who are affected by Covid-19 to reskill and upskill. Again, our colleges and universities will have a key role in that programme to ensure that it meets the needs of individuals and the wider economy.

All of that was done at high speed, under the most difficult of circumstances. My officials and I, all the agencies, the staff in our institutions and student organisations have been working flat out to help all the sectors get through it. The challenges have been unprecedented and so has the response. It is testimony to the commitment of colleges, universities, staff, unions and students that they have responded positively and continued to teach, research, support, study and learn.

Thank you. We move to questions from committee members. Minister, at each stage, I will come to you first. You can nominate Ms Watt to come in or, if she wants to come in, she should type R in the chat function.

I apologise to the minister and Ms Watt for the fact that I will have to leave the committee meeting in about 15 minutes.

Minister, what is the plan for ensuring that the return in January to their accommodation of students who have gone home for Christmas does not result in the same spread of infections and mass self-isolation that we saw in September?

Thank you for the question; it is on an important issue. We were determined to allow our young people in Scotland to continue with their further and higher education. That is why, at the beginning of this academic term, we worked with all our institutions to allow students to return as safely as possible. At a time of rising rates of the virus in Scotland, there were outbreaks in university accommodation, which were regrettable and difficult for the students who had Covid or had to self-isolate.

At the moment, we are in a much better position. The rate of infection on campuses is very low and, across Scotland’s campuses, fewer than 1,000 students are self-isolating. We are turning our attention to the safe return of students after Christmas and new year. At the moment, we do not know exactly what that will look like. We are currently focusing on the safe departure of Scotland’s students at the end of this term, if they wish to go back home for Christmas.

When our students return after Christmas and new year, it will be far from normal. We will look at the role of testing and at when and how they arrive. We will give as much clarity as we can to the institutions and students and their families as quickly as possible in the coming weeks.

We have 500,000 students in Scotland; a few tens of thousands live in term-time accommodation, such as halls of residence, of whom nearly half are first years, and that was one of the issues with freshers week at the beginning of this term. We must look at the halls of residence issue, but there is a wider issue of allowing students to continue their education. We have asked the Health and Safety Executive, environmental health teams and public health officials to work with the universities to consider what extra steps we can take to keep people who are staying in halls of residence safe.

I take it from your answer that there is not yet a plan for the safe return of students in January. That is concerning, given that it is weeks away. Are you at least in a position to confirm to us when that plan will be published and announced?

We know that people are keen to know, but, because we are in the middle of a pandemic and it is still mid-November, I cannot predict what January will be like. We are looking at a number of measures, some of which I mentioned in my opening remarks. Within the next couple of weeks, we hope to be in a position to make an announcement about what the return after the new year is likely to look like and the kind of measures that we are working on with universities.

I know that other members want to come in, but I have one final question. It is on a slightly different area but relates to what January will look like. Will you confirm what the position is in relation to in-person teaching in universities and colleges in level 3 and level 4 local authority areas?

We published the guidance yesterday for level 4, and that will be disseminated throughout today. It will, of course, refer to other levels as well. For level 3, we have said:

“Learning and teaching will be predominantly online, with in-person provision only where it is judged necessary to fulfil learning outcomes ... and to support student welfare and retention.”

We have also asked all the institutions to rapidly review each course and their support services.

For level 4—around 44 per cent of college students and likewise 44 per cent of university students will be in the level 4 areas that were announced this week—we have said:

“Learning and teaching will be online with an exception for the delivery”

only

“of critical and time-sensitive learning, assessments and work placements”

and so on

“that cannot be delivered remotely or postponed.”

We have asked all institutions under level 4 restrictions to inform Government officials by next Monday of the activity that they have identified as critical exemptions, along with the number of students that may come under those categories in which there may be some limited face-to-face learning and teaching.

The end of term is a mere 10 days away for some students. Are you staying that they will leave university without knowing how, and in some cases whether, they are going to return? Is that satisfactory?

We have to understand that we are dealing with a global pandemic. At the moment, we are focusing on allowing our students to return home safely at Christmas, if that is what is required. The committee may want to delve into that later in the meeting. This week, we are looking at various options for what the return after Christmas and the new year may look like. It may be a week or two before we announce that because we are still working through it and taking public health advice.

Public health officials are looking at the other measures that we have put in place in Scotland and what that will mean for the potential trajectory of the virus. I do not think that that is unreasonable. Most people understand that we are in a very difficult situation. I do not believe that any other Administration in the United Kingdom has made more progress than we have in terms of plans for students returning after Christmas. We are all in the same boat. We recognise that minds are turning to what that return might look like and we will do our best to paint that picture as soon as we can.

Students will want to know whether they should be packing up their things for good and it is not unreasonable for them to want to know that. Part of the reason why there is an issue around the plan for the return to university is that we did not have a particularly effective plan at the start of the academic year. Why was having tens of thousands of students all turning up to halls of residence at the same time not identified as a risk? Halls of residence are a form of accommodation in which people live in very close proximity. Why was that not identified as a risk and why was there not a better plan for people arriving at the start of this term? If we had had that plan, we would be in a better position to have a plan for the return in the new year.

There is no blueprint for what we have been through in further and higher education while dealing with a global pandemic. There was a plan and, as I said before, we had 500,000 students returning to further and higher education. As Daniel Johnson said, a few tens of thousands—mainly first year students—were staying in halls of residence and we put guidance in place for the institutions to follow. In developing that guidance, we took the best expert advice that we could obtain on how to keep people safe in their halls of residence. At the time when students were returning to university, we were already seeing a rise in the prevalence of the virus in Scotland. We knew that there were risks, and we had a plan.

10:45  

It is clear that not opening the halls of residence would have resulted in similar harms and difficulties, and would have posed other risks as well. As members will know, it is all about the balance of harms. We have to learn what we can from the situation in halls of residence in September and October.

Steps will be taken to mitigate the situation for the return of students after Christmas and new year. Of course, that will be different from freshers week in September and October—it will be a different environment for students who are returning to their campuses. We are working closely with everyone to ensure that we can make it as safe as possible.

Can you guarantee that all students will return, or are you looking at proposals which might mean that some students, such as those in the arts and humanities, which do not require access to laboratories or other physical resources, might be asked to study from home—[Inaudible.]

I am afraid that we have lost Daniel Johnson—[Inaudible.]

I will repeat the question. Can the minister guarantee that all students will return in January, or might it be a partial return?

Staggered returns would be one of the options. I cannot say more than that just now, because we have not taken any decisions. The period of time that might be involved, or whether that option will be adopted at all, remains to be confirmed, but it is absolutely one of the options.

Will all students return? That question is different from the issue of staggered returns.

You are asking me to confirm a decision which, as I said, has not yet been taken. I am saying that one of the options would be a staggered return, which would mean that not all students would return at the same time.

So, you do not know if all students will return. Some might not—is that what you are saying?

We have not taken a decision yet, and unfortunately I am not in a position to announce a decision to the committee today.

As I said, all the UK Administrations are speaking to each other about the matter, and we are all looking at the options for the safe return of students after Christmas and new year. In fact, I have a meeting this afternoon with my UK counterpart.

Good morning, minister. Universities Scotland, in its submission titled “Universities as drivers of Scotland’s recovery & future success”, rightly refers to Scotland’s excellent record on research. It states:

“research is increasingly a joint venture with business, and this has 33% higher impact than the UK average”.

The submission goes on to say that:

“Brexit remains a threat to the research environment”,

but it also says that there is a

“real opportunity to lever additional resource into Scotland for research and innovation to ‘rebuild better’, and ... create high-quality jobs while doing so.”

Given that there are concerns about a £43.5 million shortfall for research, what will the Scottish Government do to help plug that gap and enable universities to lever in that additional funding?

That is an important issue. In Scotland, we are lucky in that our research-intensive universities and institutions are world leading. That helps to underpin the wider Scottish economy, and we have to do our utmost to protect it as we go forward in the face of the challenges from Covid and from exiting the European Union, which poses a significant threat.

With regard to the challenges that universities face from Covid, a few months ago we announced an extra one-off injection of £75 million to help support research in our universities. Universities were facing a lot of pressures and many contracts had been suspended, and the extension of contracts was leading to extra costs.

In addition, some of the income streams for research have been harmed. For example, charitable income for research in our universities is likely to experience a severe decline because our charities are not currently raising money across society, and therefore they cannot fund as much research in universities as they previously did.

On the point about leaving the European Union, Scotland has benefited from €711 million from the EU’s horizon research programme since 2014. We currently have little clarity from the UK Government about what will replace that. That huge research resource is at risk.

We have given £75 million to the sector. We are working with the UK Government and putting pressure on UK ministers to ensure that we do not lose out on EU research funds and to make sure that those are replaced by UK research funds. We are also working with UK Research and Innovation to establish how Scotland can benefit from the funds that are coming on stream from that avenue. It is a big issue.

Looking at that £75 million, and thinking about the gearing effect, how much additional funding does the Scottish Government think that it will be able to bring in from private and other sources?

That touches on one of the reasons why the Scottish universities value the public support for research. It levers in private sector and charitable sources of money.

Karen Watt from the Scottish Funding Council is on the line. She is involved in that and she may wish to elaborate, but I think that the £300 million that the SFC took in from public funds for university research draws in another £800 million. That shows how valuable every £1 million of publicly supported research money is to the Scottish economy.

Funding is a big issue for universities, and we will not have a budget until 28 January. The universities have put forward a number of what we might call demands for money. Those include a complete reversal of the erosion of real-terms funding by £750 per student that they claim has happened since 2015, a demand for research funding and a maintenance backlog of £850 million that they want assistance with.

Given the Scottish Government’s current financial situation, will the Government be able to move at least some way towards assisting universities with their funding difficulties, including some of the issues that I mentioned?

We are reflecting on the financial pressures that Scotland’s colleges and universities face. Where possible, we have already brought forward additional funding. The Scottish Funding Council is advising us. We recognise that the sectors still face financial pressures, primarily because of Covid-19.

That will be taken into account. Discussions and negotiations will take place within Government in the run-up to the budget in January. I am sure that the finance secretary and the Government will take that into account.

My question follows on from Kenneth Gibson’s questions, because it is about the budget. When we have previously discussed the financial impact of Covid on the university sector, there has been some dubiety about where the financial position might land. The Scottish Funding Council has now done significant work on that. The papers that we have for today’s meeting say that, in this financial year, the sector will record an underlying operating deficit of £176.1 million and that borrowing will have increased to £1.735 billion. That figure is up from £437 million only five years ago. Most worrying, the SFC says that six universities will have fewer than two months of cash reserves by the end of the financial year. That sounds like an existential threat to at least some of our institutions. Is it really enough to say that you are “reflecting” on that? Can you not give some indication that you may be able provide some financial stability for this critical sector?

As I previously said, we are listening closely. This is a moveable feast. The deficit figures have fluctuated wildly in the past few months. Karen Watt can elaborate on that.

As you know, a lot of that relates to the number of international students who will be coming to Scotland and are still to arrive. For example, a large percentage of postgraduate students at some universities in Scotland are due to arrive after the new year. Therefore, there is still an element of uncertainty about the financial challenges facing our universities, particularly in relation to international students.

We recognise that this is a very tough time for our colleges and universities, as it is throughout Scottish society. A lot of that is to do with Covid. We have asked the Scottish Funding Council to undertake a review, because we realise that there are challenges facing the funding model of further and higher education. You might have seen the SFC’s phase 1 review report, which begins to consider those issues—there are another two phases of the report to come.

I assure Mr Gray that the financial position will be taken into account in the budget discussions in the run-up to the budget’s publication on 28 January. Clearly, this is not my decision—I am not the finance secretary—and the Cabinet will be looking at the issue. However, we acknowledge the severe financial pressures facing our colleges and universities.

If the convener wishes to bring in Karen Watt at this point to talk about the financial pressures that some universities are facing, you might find that helpful.

I am happy to do that—[Inaudible.]—follow up first and then have Ms Watt come in. I am in your hands, convener.

Is that you finished, Mr Gray?

No. I have a follow-up question for the minister. He invited Karen Watt—

I will ask Karen Watt to come in on Iain Gray’s first question, then I will happily answer his second question.

Sorry, I missed that.

As the minister said, the situation is very fluid. Universities are all in quite different situations. Overall, I would say that our funding represents about 30 per cent of the sector’s total income, but reliance on our funding and exposure to other cross-flows of income, for example the international tuition fees, varies significantly.

When we look at individual institutions and we are talking about sustainability and the interaction with our funding model, all those differences come into play, as you know. The University of the Highlands and Islands gets about 69 per cent of its funds from us, whereas the University of St Andrews gets 15 per cent. In all such cases, it is the close relationship that we have with individual institutions that helps us to assess their sustainability overall.

It is also worth highlighting that we were taking some of the projections at a point in time and that the figures have improved significantly over the period of a few months, partly because universities have put in their own mitigating actions.

I would also say that there have been significant injections of funds during the Covid period: as the minister said, there has been £75 million for research, £3.5 million on estates maintenance and, as a result of the SQA exams process, there will potentially be money for additional places.

All those issues in the round are still in play as we look at the financial projections during the coming months.

Thank you for that. The problem is that some of this is not fluid. Some of the issues are not related to Covid or to international students, as the minister implied. If we look at the public funding of teaching for Scotland-domiciled students attending Scottish universities in 2018-19, which is long before Covid, there was a shortfall of £157 million a year. As Kenny Gibson has already referred to, the Government underfunds each Scotland-domiciled student going to university to the tune of £750 in real terms compared with only five years ago. That is not fluid or unpredictable; the university sector is facing a problem of financial sustainability. Mr Gibson asked the perfectly reasonable question whether that issue will be addressed.

You say that, because of what happened in the exams, you are helping universities by funding additional places. However, that is not a help to the universities, because every additional place at this level that the Government funds costs the university that accepts that student £750. It is not the case that you are helping the universities; you are making the situation worse. I ask the question again. Yes, the budget will be decided by the finance minister. However, will you, as the Minister for Further Education, Higher Education and Science, argue to your colleagues that that £750 gap, which has developed over time, should now be closed to try to help our universities to survive this crisis?

11:00  

I always argue for the best deal for our further and higher education sectors during budget discussions, and I will continue to do so. As you know, the Government faces an enormous challenge in relation to public finances as a result of Covid. Every sector is under pressure.

Kenneth Gibson’s question was about research, and I feel that I addressed the points that he asked about.

He asked about—

I want to answer your question. I accept that there are short-term, medium-term and longer-term issues. I accept that the funding model for Scottish higher education in particular needs to be addressed. I commissioned the Scottish Funding Council to carry out a review into the sustainability of further and higher education, because I recognise that we are very much at a crossroads, for a variety of reasons. Covid is just one of the reasons; you have mentioned some of the others. I accept that we are at a very important juncture and that we must examine the fundamentals of further and higher education and how it is funded.

I look at how we support further and higher education across the board. We have in place record levels of student support. The Government pays to enable tuition to be free; we also provide funding for teaching, research and so on. We make choices. I could take money out of the research budget, but then the extra £800 million that was mentioned earlier would not be brought in, which is very valuable to Scotland. We decided that £300 million should go towards research. We could have taken other decisions that we decided not to take. We are protecting free higher education in Scotland, but choosing to support free higher education comes at a cost.

We consider the outcomes of our approach, which are very positive. The outcomes from the more than £1 billion that we put into higher education and universities are record numbers of Scottish students being accepted to Scottish universities, record numbers of students from south of the border being accepted to Scottish universities and record numbers of applications being made by overseas students to Scottish universities.

We are making good progress on widening access. More students from our more deprived communities are attending our universities than was ever the case previously. As I said, the outcomes are very positive for Scottish higher education. Furthermore, debt for students in Scotland is a fraction of the debt for students elsewhere in the United Kingdom.

I accept what Mr Gray has said about the need to fundamentally review how further and higher education is funded in Scotland. There are short-term issues and there are medium to long-term issues. In relation to the short-term issues, we will ensure that no university is at risk. With her colleagues in the Scottish Funding Council, Karen Watt is doing a lot of good work in supporting our universities to get through this fragile time.

Is Mr Gray finished?

I have the briefest of follow-ups. Surely, the whole point of this exchange is that the Government is not funding free higher education; it is partially funding free higher education. There is a shortfall of £750 for every Scotland-domiciled student, which universities are having to fund. Surely, it is reasonable to ask that the policy, which I support, be properly and fully funded by the Government.

That is why we are having the fundamental review of the financing of further and higher education. I think that we all accept that the right thing to do is to have the review that is taking place. I am sure that Karen Watt and her colleagues will give us some potential answers.

The finances of universities are complex. The overall economic recovery of costs in Scotland’s universities is above that in the rest of the UK. That takes into account other factors as well as teaching, such as research, but I accept that Mr Gray is focusing on what public support is available for the teaching element.

The minister referred to widening access. The SFC’s phase 1 report says:

“We may also wish to explore the option of reducing student numbers and maintaining current levels of funding”.

What impact would that have on widening access?

As you know, the Scottish Government is committed to widening access for students from Scotland’s most deprived 20 per cent of communities. We are only 0.1 per cent away from our 2021 target, so we are making good progress.

We have encouraging statistics from university admissions this year—that represents offers and acceptances, and we will have to wait a few weeks for the final figures, which show how many students turned up. We are making good progress on widening access, and I congratulate all our universities and their teams, which have put huge effort into helping people from more challenging backgrounds to access higher education.

It would be best for Karen Watt to talk about the SFC’s review, which you asked about. Phase 1 looked at issues that a lot of organisations and sectors presented for the SFC to consider. The report does not represent Government policy, and we have no plans to cut student numbers in the coming years.

For the review, some proposed that one way to increase public support for each student place would be to cut the overall number of places for the given budget. That might relate to the demographic issue that there might be fewer young people to go into further and higher education in the future. Rather than cut the budget, we could leave the budget as it is, which would increase the amount of money per student.

I ask Karen Watt to explain where the reference in the phase 1 report came from, if Beatrice Wishart is happy with that.

The point of our review is to ginger up debate about what the future might look like. We used phase 1 to reflect back what we heard. We said clearly in our review that colleges and universities are vital to our economic and social recovery through the pandemic and beyond and that we will need to expand tertiary education to get through the economic recovery in the next few years. We explicitly said that we need additional undergraduate and college places to ensure that people have a productive learning environment.

In the review, we looked at options and at feeding back what people talked to us about in relation to the next five to 10 years. Student numbers are one part of the bigger debate—we had about two paragraphs on them in a 90-page report.

The suggestion was made that taking a different approach to target setting in the system—for example, by taking away volume targets for colleges—could mean a different way of looking at demographic planning and setting targets. That might mean better regional planning and a more efficient system. If the system was more efficient, got people into work in the right place and stripped out unnecessary duplication of levels of study, reducing student numbers in line with demographic projections might be an option.

That involves a lot of ifs, largely because the report looks at possible options, greater flexibility for colleges and universities and a greater alignment of a number of controls that we exercise. There are a lot of ifs because the report explores options for the future.

I will ask the minister about the Covid-associated costs for the higher and further education sectors. One cost is from lost revenue; another is from additional expenditure by institutions on health and welfare provision and other resources that are required.

Minister, the committee has had quite a lot of dealings with you on the lost revenue aspect. However, how much additional expenditure has been required as a direct result of Covid? Are those instances of one-off expenditure, or will they be repeated in future years?

We are looking at that aspect. I know that Karen Watt and the Scottish Funding Council are also considering it closely and are speaking to the institutions. We have asked them to survey the costs that institutions have incurred because of Covid. As I am sure that Alex Neil will appreciate, that is work in progress because we are still in the middle of the pandemic.

Much of the additional funding, such as the money that we have allocated to colleges, is directly Covid related in that it is required as part of Scotland’s response to the pandemic. Around £19 million of that funding has been directly related to Covid initiatives.

I realise that Alex Neil asked about direct costs incurred by institutions, whereas I am giving a much more general picture about help for colleges because of Covid. We understand that there are other pressures there, and the SFC has given us figures—which the committee has—showing that to be the case. Universities are soaking up many such costs themselves, because they know how important it is to support students’ welfare. Again, we have added resources for Covid-related issues such as mental health difficulties and student hardship, which has meant that extra resources have gone to universities.

I remind Alex Neil that all of that is very much work in progress, because the current situation is such a moveable feast. Perhaps he might want to invite Karen Watt to say a bit more about it.

That would be helpful.

Particularly in colleges, additional costs have been incurred on measures to make campuses Covid safe, such as extra signage. They have also involved investment in areas such as the digital and online provision of learning resources, considering student hardship difficulties and managing connectivity and laptop provision issues.

We have been keeping a check on such matters all the way along, but we are carrying out a rapid piece of work explicitly to assess exactly where we might be on them. The situation is relatively fluid because, early on in the Covid pandemic, part of our role was to ensure that we had not only stability but flexibility in our funding, so that universities and colleges could plan and think about what they needed to do with their resource. For example, where there have been shortfalls in certain targets in our outcome agreements, we have said that we will not take back those funds and redistribute them, if they involve Covid-related issues. We have therefore enabled some such costs to be met from the flexibility that we have already put into the system.

Additional money has gone into helping preparations around student support and making campuses ready, but we are doing a piece of work explicitly on whether there were additional costs over and above the flexibilities that we have put into the system.

That is helpful. Clearly, we will all need to keep an eye on that area as we move forward.

I have a second and final set of questions for the minister. In your introductory remarks, you mentioned that the incidence of Covid in the student population has been quite suppressed, compared with the initial burst when everyone went off to university at the start of the academic year. What is the testing regime in higher and further education? Are we testing students and staff regularly? Are we testing asymptomatic students? How do we know that the incidence is suppressed?

At the moment, like all other members of our society, students and staff are offered tests if they have symptoms. The numbers of those tests are the basis for our current statistics. We also speak to universities about the numbers of their students who are self-isolating. I am sure that, across our society, all our figures will be in the same basket in that they will have a margin for error, as is reflected in the modelling that our public health officials carry out. At the moment, our figures come from testing of symptomatic individuals, which is carried out through the test and protect system in the same way as we do for everyone else in society.

You will be aware that, as I announced in Parliament last week, we are introducing testing of asymptomatic students as part of our approach to a safe return for students from college or university for Christmas. We want to allow students to go home at the end of the term, if that is what they wish to do. We also know that, in any year, tens of thousands of students want to change their term-time address at the end of term at Christmas.

11:15  

We are working with universities as we speak. In Scotland, all our universities and, where appropriate, the colleges, have volunteered to participate in the UK pilot scheme. We are working with the UK delivery partner to roll out asymptomatic testing, using a lateral flow test that can give a result within half an hour. Any student who wants a test will be offered one. It will be up to the universities how to roll that out. It has to be delivered in a relatively short window, as we are approaching the end of term and it has to be done before the students head off home.

I am sure that the committee knows that it is a pilot scheme, so it is the first time that it has been done. Universities are working hard to get the infrastructure up and running, working with the UK delivery partner and public health teams to ensure proper clinical governance and that it is carried out properly. I would advise students who want to go home to come forward for an asymptomatic test. It is an extra layer in all the measures that we are asking people to take to stay safe. Tests are not fail-safe, but it is an important addition to all the other measures that must be taken.

International research shows that up to a third of the population is asymptomatic, so we cannot be absolutely sure that we have suppressed the virus until we move on to testing people who are asymptomatic, can we?

I do not think that I used the term “suppress the virus”. I am just saying that, at the moment, there is a much smaller number of cases in colleges and universities. Only a tiny percentage of the overall daily rate of reported cases in Scotland relates to students. Given all the headlines and the coverage over the past few months, it is important that we do not single out students. The statistics show that, given that we have 500,000 students in Scotland out of a population of about 5.4 million, proportionally, students are not as big a problem as some people might want to make out. We must not stigmatise them and, at the moment, the figures are quite low.

As you say, no testing regime is perfect, but the new asymptomatic test, which is being rolled out across UK universities in a pilot scheme, is much more reliable and accurate than previous asymptomatic tests.

That is good news.

The minister said that we will not know about the additional places until next year. Does he know when next year we will know? He estimated that it will be about 1,500 places. To follow up points made by other members, will those places be funded at the current rate or at full cost?

We estimate that 1,500 extra university places will be funded as a result of the Scottish Qualifications Authority changes a few months ago, which will result in an additional £12 million at least for universities. It depends which courses students choose—it could be a bit more than £12 million. That is based on the current funding model for places in Scotland, and the universities have signed up to that and are happy to ensure that those 1,500 students are provided with an education.

I wonder whether they truly are content with that, minister. Universities Scotland makes a number of asks in its written submission for help to address the deficit of £176.1 million.

You did not really answer Iain Gray’s question about what you will ask for from the Cabinet Secretary for Finance. Of the specific asks from Universities Scotland, what are you lobbying the Cabinet Secretary for Finance for? Are you asking her for more money for the university sector in the budget next year?

I know that you would love straight answers to those questions, but you will understand that we are talking about submissions that were sent in by the sector in the past few days as part of the on-going process for the 28 January budget. They will be fed in to the process, and I will speak to my colleagues in Government about the pressures that further and higher education are facing. As I said, collectively, as a Government, we have to consider the enormous pressures across public finances that are faced by all sectors. There will be similar submissions from all stakeholders across the Government’s areas of responsibility.

I am not in a position to say yet, but I will certainly discuss the matter with Universities Scotland. We have more meetings planned to hear its case and talk through the issues as the budget negotiations progress in the coming weeks. I am sure that the committee will want to have its say as well.

A lot of those areas are not new. The erosion of funding has been brought up time and time again. It is not as though the issues will be new to you. As the Minister for Further Education, Higher Education and Science, your job is to fight for and support the sector. Will you be looking for more money for the sector in the budget? Is it your aim to fight the sector’s corner and get more money?

My job is to work with our sectors and with my fellow ministers—to make sure that they are aware of all the issues that the sectors are facing—so that we can deliver good-quality further and higher education for the people of Scotland. It is important that our colleges and universities play a key role in the post-Covid economic recovery. As a country, we will not be able to help our economy to recover without having vibrant colleges and universities that deliver not simply for young people but for people of all ages.

I will make the case but, as I said, the Government as a whole is facing enormous pressure on public finances at the moment. It will all be subject to the discussions and negotiations in the coming weeks, and I will be part of that.

On the subject of testing, the testing kits have been delivered by the United Kingdom Government, and the logistics of rolling out the testing in December are, I think, being dealt with by the universities. It was suggested to me that the UK Government is looking to do testing on students’ return to universities in January. Is that also your understanding? If that is the case, what is the delay in confirming that asymptomatic testing—for which we have been calling for some time—will be available to students in January so that we can avoid a repeat of the outbreaks in halls that we saw in September and October?

We are looking at the potential role of testing. We are about to have an experiment, with our first asymptomatic testing regime being put in place in campuses in the next few weeks. We are also discussing the issues with the UK Government, because we want to stick together as much as possible on a UK-wide pilot for testing. The first part of the pilot is about the safe return of students at Christmas when the term finishes. We continue to discuss what role testing will play in the return of students after Christmas. I am speaking to the UK minister this afternoon, so I might get an update on the UK position, but no one has taken any decisions yet on what that role will be, because various questions arise with asymptomatic testing, including where, when and who.

We are about to have our first experiment with the pilot of asymptomatic testing. I hope that people agree that it makes sense to set it up and put it in place and to see how it goes. It is a pilot, so we have to learn from it.

Do you accept, as Daniel Johnson pointed out, that the situation will cause confusion or concern for students who are going home and who are not sure whether the testing regime will be in place when they come back?

Term starts to break up around the end of this month and through the first couple of weeks of December. As I said, we will do our best to give as much clarity as possible to students. I would love to be able to give clear and ideal answers but, because we are in a pandemic and cannot lift off the shelf a blueprint or manual on how to handle it, we are learning as we go.

As we speak, we are not yet clear on that position but, of course, we recognise that it is an anxious time for students and their families. I speak to my constituents and, last night, I spoke to a family on the telephone about the concerns that they and their daughter at university have, so I understand the anxieties. If I had children at university or college just now, I would share those anxieties. However, most people that I speak to are reasonable and understanding. No one wants to be in this position, but we have to do our best to get through it and take the decisions as and when it is appropriate.

I want to pick up on your comments about anxieties. This is a very anxious time for students, and I think that you said that 1,000 students are still self-isolating. Are you satisfied that enough mental health and wellbeing support and counselling services are available for students? Will there be enough for students who go back after January? Have extra measures been put in place to cover that particularly difficult period?

That is an important issue. My next ministerial leadership group meeting—I hold meetings with all the leaders of further and higher education and the agencies every two or three weeks—takes place this Thursday, when there will be an agenda item on the mental health impact of Covid-19. We are paying close attention to that and we will get more updates and feedback from our student and college and university staff unions on Thursday, which will give us a better picture.

So far, we have made sure that more resources have gone into those sectors to help deliver mental health support. The rolling out of 80 counsellors over four years, which is an existing policy, is well on and, in September, we announced a further few million pounds towards that roll-out. In the past week or so, the Cabinet Secretary for Health and Sport announced a further £1.3 million for mental health support in the sectors, to help deliver services that relate directly to Covid-19.

The Government continues to support the NUS think positive campaign, and there are one or two other mental health initiatives on campuses. Details of that support are provided as part of the welfare support that is delivered to all students at university and college just now, including self-isolating students, so that they can follow it up if they need it. The latest figure that I have—it is now a couple of days old—is that 899 students are still self-isolating in Scotland’s university sector. Looking at self-isolation across society, that is what we would expect, so that is a better place than we have been in over the past few months.

Thank you. That is helpful.

My questions can be answered by either witness. We need to be realistic about the situation in higher education. I know that the paper from Universities Scotland was submitted only in the past few days, but it repeats what the committee heard in April and before I became a member—the warnings from the sector have been out there for a long time.

The numbers are stark: in the past five years, debt in institutions has trebled and the average funding per student is down by £750. Six out of our 18 institutions are set to run out of cash within the next 60 days, and many have reached their borrowing capacity, so the idea that they can keep borrowing to make up the shortfall is not feasible or sustainable. That had been happening for many years before Covid. How have we got to a situation where our higher education sector is in so much debt, is so underfunded and is struggling? How will you ensure that the sector survives?

Jamie Greene asks fundamental questions, which we have to look at closely and debate.

Jamie Greene raises two points. The first is about the debt levels in the sector. The second is about what he calls underfunding, which is clearly a matter of political debate. We do not run the universities, but 40 per cent of universities’ income comes from the public purse. That figure varies between universities. The percentage of public funding is very low for some universities and much higher for others. In effect, the Government’s role is to have a contract with the further and higher education sectors to deliver education for the people of Scotland. We also want to ensure that they play their role in relation to research and underpinning the Scottish economy.

11:30  

The decisions are taken by the universities. Many universities have taken very ambitious decisions to grow, invest and develop new projects over the past few years. Those projects are exciting for the future of Scotland and, in many cases, for the future of humanity, so we are very lucky. The universities are independent institutions; they take their decisions. Therefore, they have to cut their cloth and deal with the consequences of their decisions.

There will clearly be different views and an exchange of views. I am not denying that we have to look closely at public funding for further and higher education, but our role is our role. We are not responsible for all the finances of Scotland’s universities, although we want to work with them to ensure that we have a sustainable sector.

Jamie Greene said that he might want to hear from Karen Watt. It might be worth bringing her in, because what we are talking about is exactly the meat and drink of the review that the SFC is undertaking.

That has been a huge focus of our review, and there is no one easy answer. Clearly, there were underlying issues pre-Covid that are rippling through.

I have a number of points on that. First, I think that we can do something to protect the research and science base. There are, of course, many players in that field. A collective set of decisions in relation to full economic cost recovery are made by the Government, the SFC and UKRI. A dual support system is in place for research and innovation. The decisions that are made by charities and other UK research funders are important, and those decisions might help with some of the cross-subsidisation that underpins research.

Secondly, given that universities are, in and of themselves, international beings and, as the minister said, make choices about the balance and mix of courses, business and research, we need to accept that, for the foreseeable future, there will be a level of cross-subsidisation from international income for learning and teaching in universities. The question is whether we have the right balance. That is what the review is trying to work through with the sector.

Thirdly, there are issues that individual institutions need to take on themselves. Those include mitigating strategies, adjustments to their business models, their workforce plans, their estates, their digital infrastructure and the choices that they make about their business mix.

Finally, there are some interesting themes from our review in relation to having a more integrated and connected tertiary education system. If some universities and colleges worked together more closely and collaboratively, particularly in regional areas, we could look at whether we could get a more efficient learner journey and better outcomes for businesses.

We will take forward some of those threads in the rest of the review, which has not concluded. We will work into next year on some of those specific issues.

The minister said that such matters are for political debate, but they are also matters of political choice. The reality is that how much funding universities get from the Government for their places are political decisions, and it is a fact that universities are receiving less money today than they were five years ago. Although we can try to apportion some of the blame for their debt to their localised decisions, it is a fact that central Government policy decisions directly affect their funding. I do not think that that can be ignored. I hope that the review will address that issue.

Ms Watt made an interesting point about having better connections between colleges and universities and a more holistic view of the tertiary sector. That is sensible and prudent.

We know that our college sector is also in dire straits. The papers for the meeting show that colleges are also forecasting a deficit this year. Colleges are structured differently to universities, so their ability to borrow or to generate revenue is different. The stark reality is that they will deal with that by reducing staff expenditure, which will undoubtedly mean cuts to staff numbers in some colleges. A reduction in staff may mean a reduction in courses and in the role that colleges can play in the post-Covid recovery.

Given the importance of colleges in helping us with the Government’s upskilling and reskilling agenda, the money that they are asking for, which is between £10 million and £20 million, is not much in the grand scheme of things. We get huge benefits from our college sector.

As you say, our colleges have a crucial role to play in upskilling and reskilling. I welcome your comments about the future of tertiary education in Scotland. I hope that we can have cross-party support for some of the changes that we need to make. We will wait for the outcome of the review to make sure that our further and higher education systems are fit for purpose in the 21st century given the global, demographic and technological challenges that we face.

We have received a submission on college finances and will reflect on that as we do with all the submissions that we get from stakeholders. We have brought forward additional resources for our colleges in response to Covid. The £15 million deficit for colleges that the SFC is projecting at the moment is less that what was being projected a few months ago. We will keep a close eye on that.

We gave colleges a £33.5 million uplift in this year’s budget. So many pressures have come to bear since then that that has been all but wiped out. We gave a further £19 million through various Scottish Government employment and training initiatives. That is helping. The flexible workforce fund is delivering an extra £7 million this year, and that will also help. On top of that, a £25 million training and transition fund was announced a few weeks ago. Part of that will benefit our colleges and universities.

We are paying close attention to ensure that we support our colleges to support people to cope with Covid and come out into economic recovery. We are supporting the other costs that they face because of Covid. That is why we are making sure that some of those new funds directly benefit our colleges.

We are in a challenging position. I do not deny that. Covid-19, Brexit, demographic challenges and a possible economic downturn give us a range of challenges that we could do without.

I appreciate that. You made a point about the operating deficit coming down. It has come down: it was at about £25 million when we looked at it in April. However, the SFC has acknowledged that the deficit has come down because of the job retention scheme, which is effectively paying the wages of many college staff.

As we emerge from the virus and stop needing schemes like that because people are back at work, that deficit will hit us and colleges will have to reduce staffing. They have tightened their belts as far as they can. The problem is looming and will affect colleges in the next six months. When colleges have to pay for staff from their operating costs they will be in deficit and will have to make cuts. Those cuts will surely inhibit their ability to play a meaningful part in getting people back to work and reducing unemployment.

The deficit has come down because of things like the furlough scheme. Is there a strategy for how to deal with that deficit as we emerge from Covid?

Some of the reasons why college and university income streams have taken a hit also come from Covid. It is all interlinked.

We have the job retention scheme to help to plug gaps because other areas have seen a reduced income because of Covid-19. Therefore, some colleges are making savings just now because of the lack of catering requirements, which is directly related to Covid. The committee should rest assured that the Scottish Funding Council, the institutions and I are working together on that and that we do recognise the financial challenges. I am sure that they will also be part of the discussions during the next few weeks in the run-up to the budget.

The Scottish Funding Council is taking measures to support our colleges. That is important, and we support it in doing that. Karen Watt might want to say a couple of words about that. I assure Jamie Greene and the committee that that is very much in our thinking about these financial challenges facing our colleges, which, for obvious reasons, are even more reliant on public funding, compared to universities.

Ms Watt wants to come in on that point.

As you rightly say, colleges are extremely finely tuned. Not only are they heavily reliant on our funds, our funds represent the largest part of their income. We are following the situation closely, and colleges are working closely with us, particularly when they have specific issues. We can adjust our allocations or cash flows, so we work closely with colleges on a regular basis.

The job retention scheme has helped. The additional money for the schemes that place colleges front and centre on economic and social recovery, such as the flexible workforce development fund, the youth guarantee and, potentially in future, the transition training fund, is really important because it helps colleges to manage the staff base and enables them to ensure that the right people are doing the right kinds of training and delivery. That will help them to manage the shape of the conversation about their staff base. We are also in regular discussions with the Scottish Government about the possibility of some kind of transformation investment fund. We proposed that in our review, and it is something that we are keen to explore, because the better way to help colleges to plan is to be clear and up front about whether there are funds for voluntary exit schemes that help them to reshape their position regularly. At the moment, they might need to assume some element of additional support for that. Those are the sorts of conversations that we are having.

Do I have time for a supplementary question, convener?

Yes, if you are quick. We will have one supplementary question from Mr Johnson after you.

One piece of feedback that we frequently get from colleges is that they want more flexibility in how they spend the money that they are given by the SFC. In other words, because the pot of money has been chopped into multiple funds for specific purposes, they cannot use money that has been ring fenced for one purpose for something else, even though, within their local organisation, they feel the need to move money around to do different things and to be able to respond and react. It seems that, over the years, we have almost overcomplicated the process that colleges have to go through to access the bigger pot of cash. They used to have fewer funding streams, so they feel that they have lost that flexibility. As part of your review, will you look at simplifying the funding streams to give individual institutions the flexibility that they think they need? As well as the overall amount of funding, it is about what they can do with the money that they get, given their reliance on your funding, compared to universities.

That was a strong part of the feedback in our review, and we have mentioned it throughout our report. We have also mentioned some possible options. It has been very helpful for colleges to have our baseline funding, because it has enabled them to bid into these other funding pots.

Through those other funding streams, we are effectively enlarging the investment that is available for colleges, but colleges would like to see a more integrated approach. They would certainly like us to think differently about targets and how we set them. In our review, we set out some options in that regard, and this year, in particular, we have moved to a much more flexible way of enabling colleges to think about how they use our funds.

11:45  

My final point is that, in all this, we have to balance accountability for a lot of public money that goes into the sector, with the flexibility that the sector needs to deliver. One of the things that we would like to explore is a more fundamental review of our outcome agreements. In some of our material that we put out in the first phase, we proposed that we move to something more akin to a national outcome and impact framework, whereby institutions have a lot more flexibility to decide how best to meet the outcomes that we are setting out.

It is very much a balance of accountability and flexibility, and we think that the review is giving us the option to explore that further with colleges.

I want to go back to a comment that the minister made about the use of lateral flow testing, and it being more accurate for asymptomatic individuals. I am sure that the minister will agree that it is important that we are clear about the facts of such matters. My understanding is that lateral flow testing is not more accurate, but it is better suited to mass deployment. I think that with one instance of the test, the accuracy is lower—around 70 per cent. It is the second test that gives accuracy of more than 90 per cent, but it detects a much higher viral load than the polymerase chain reaction—PCR—test. Is it correct to assess the lateral flow test as more accurate? It is really about the ability to deploy it on a mass basis, is that not correct?

[Inaudible.]—say something misleading. I was talking about other asymptomatic tests that have previously been available in the market. I want to clarify that we have chosen an improved version of the lateral flow test for the pilot. I was not comparing it to symptomatic testing, or talking about it in relation to the wider effectiveness of testing. I was talking about it in comparison to other asymptomatic testing kits that have been available in the market. The test that we have chosen is a good one, and it is better than the previous ones.

That is a helpful clarification. Thank you, minister.

That concludes questions from the committee and the public part of today’s meeting. I thank the minister and Karen Watt for their attendance. It has been a helpful session.

11:48 Meeting continued in private until 12:04.