Edinburgh University boss announces job losses due to national insurance hike

Edinburgh University has become the latest higher education institution to announce it is cutting back on staff in the face of national insurance rises.

The university said it is opening a voluntary redundancy scheme and compulsory redundancies may be necessary "if unavoidable" due to the financial climate.

Vice-ChancellorSir Peter Mathieson said the sector is dealing with challenges around international student recruitment - a key source of income - along with increasing staff costs and an underfunding of places for Scottish and UK students.

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He said the university will be taking "a series of actions" to address these pressures, as well as the upcoming increase to employers' national insurance contributions.

Earlier this month, Dundee University warned cuts to staffing levels are "inevitable" as a result of a projected deficit of up to £30 million.

In the email sent to staff , Sir Peter said: "I last wrote to you in July about the severe financial challenges our University and the sector are facing. I am writing to update you on the latest developments in terms of our costs and income and our plans to address these.

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"Many of you will be aware that our university costs £120 million per month to run. In the context of the recent sector challenges around international student recruitment within an already competitive international student market, increasing staff costs since the pandemic, and the unsustainable levels of funding for Scottish and other UK students, our outgoings are consistently higher than our income.

"The general election has brought in a new UK Government which has increased National Insurance (NI) costs for employers. This has created a multi-million pound increase to our salary bill. They have also made a small increase to tuition fees for students and whilst I welcome the UK Government’s recognition that an inflation-linked rise in tuition fees is necessary as a small step in addressing funding sustainability, the potential additional income this could generate falls far short of the significant increase in staff costs resulting from the NI increase. Staff costs already account for 60 per cent of our annual expenditure, which is a higher proportion than in comparable universities.

"Tuition fees account for 37 per cent of our total income. Like many other universities, we were not able to recruit fully to target in 2023-24 and as a result we experienced a shortfall in our projected tuition fee income. We also now have a fee forecast for 2024-25, based on actual intakes, which shows a shortfall to target, this indicating a trend. These figures underline the fact that our outgoings are consistently growing faster than our income and that we require to change our operating model to ensure we remain financially sustainable.

"In response to this situation and the recent developments outlined, we have concluded that we need to take a series of actions. We are working on the timings and scope of these and will provide updates to you all on a regular basis.

"We will continue our programme of modernisation with a commitment to enhancing student experience. We will make more efficient use of our estate and remain fully committed to delivering our strategic priorities around People, Research, Teaching & Learning and Social & Civic Responsibility – the four focus areas in Strategy 2030.

"We will also continue to use the standard mechanisms at our disposal to manage staffing costs, including selective voluntary and, if unavoidable, compulsory redundancy.

"Before the end of the year, we will be holding a series of in-person and hybrid sessions across our campuses so that you have the opportunity to find out more and to ask senior leaders questions. We will work with our Unions and managers to ensure that the actions we will be taking are communicated clearly and to help colleagues through the changes.

"I realise that this will be a difficult and unsettling message. However, it is important that we are honest about the scale of the challenges that we need to address, the reasons behind the course of action that we are taking, and the impact that this will have on our operations and on everyone in the University.

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"It is important to emphasise that our University remains a respected and capable organisation with the potential to continue to develop its world-leading research and teaching. Taking some tough decisions now will ensure that we retain this status into the future."

Edinburgh University and the UK Government have been approached for comment.