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All Official Reports of meetings in the Debating Chamber of the Scottish Parliament.
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Displaying 2063 contributions
Education, Children and Young People Committee
Meeting date: 12 June 2024
Michelle Thomson
Yes, of course.
Education, Children and Young People Committee
Meeting date: 12 June 2024
Michelle Thomson
You make a fundamental point about gearing that I do not think has been understood in this legislature from a financial perspective, so thanks for that.
To follow on and finish that thread, perhaps Shona Struthers could comment on the process for monitoring, be that in relation to the SFC or indeed the Scottish Government, if something needs to be highlighted. Will you talk us through the process for risk assessment of financial viability? Can I assume that that is happening on an on-going basis? After all, you are running businesses and you will be applying the usual measures. If I am not correct on that, please put me right.
Education, Children and Young People Committee
Meeting date: 12 June 2024
Michelle Thomson
Exactly—the financial element has been put across very clearly.
Education, Children and Young People Committee
Meeting date: 12 June 2024
Michelle Thomson
If you do not mind, I will come in before we move on to that issue. I want to be clear in my mind about the prudent regime that Iain Gillespie outlined. Is that set by the Scottish Funding Council? If we leave aside the risk profiling that commercial lenders undertake, do you set that prudent regime?
Education, Children and Young People Committee
Meeting date: 12 June 2024
Michelle Thomson
I have a brief top-up comment that follows on from my colleague Ben Macpherson’s fair point about the process of allocation. It might well be worth exploring that issue further, but I would be very surprised if it were otherwise. If the Scottish Government were mandated to flow the consequentials through in exactly the same format, that is exactly what it would have to do; after all, it would be a legal requirement. However, given that this is the education committee, there might well be a misunderstanding about how the financials flow through, the process itself and the point at which money arrives with the Scottish Government. It might be worth exploring that.
Education, Children and Young People Committee
Meeting date: 12 June 2024
Michelle Thomson
That point about gearing and lending to English universities is very well made, and I understand it clearly. Is part of the risk for them that, if they have taken on lending against fixed assets on a commercial basis, the lending institutions could pull in loans, as we have seen in other areas? I take it that that is what you are alluding to—as well as the cash-flow issue, there is the cash-out day idea.
Education, Children and Young People Committee
Meeting date: 12 June 2024
Michelle Thomson
I will move on to my next question. We have talked a lot about finances, and I hear and understand your warnings about the provision in the light of that situation. In both your sectors, what additional support—from both the Scottish Government and the Funding Council—would you ideally like to have at this time? I know that everybody will say, “Well, we want more money.” However, if we imagine that that is not possible given the prevailing fiscal climate, what additional support would you ideally like to have?
Education, Children and Young People Committee
Meeting date: 12 June 2024
Michelle Thomson
I note with interest that, with that framing around flexibility, transparency and predictability, you are talking in business terms, because that is exactly what businesses would look for.
Shona, do you concur with that in relation to the college sector? As ever with these things, we have arrived at a place without looking back, and people will say, “We would not necessarily have chosen to start from here.” Is that a useful framing for you? I would appreciate your insights.
Education, Children and Young People Committee
Meeting date: 12 June 2024
Michelle Thomson
Good morning, and thank you for joining us. I want to follow up on what was a slightly technical discussion earlier with Professor Iain Gillespie. The framing was that some people have said that institutions in Scotland are at risk of failure. My colleague Willie Rennie and I asked Professor Gillespie a number of questions, and he explained that he thought that—this is in my words—the probability of that was low because of the prudent nature of their gearing or debt to fee income ratio, which is set to 30 per cent.
My first question is a quick one. Is that limit set by you, or is it in the universities’ articles of association? Why is there such a prudent regime in Scotland compared with what is happening with universities in the rest of the UK?
Education, Children and Young People Committee
Meeting date: 12 June 2024
Michelle Thomson
I am labouring the point because, until the issue came up this morning, I had heard a narrative that was about the UK university sector. If you look at the question from a financial perspective and consider Scotland’s level of average gearing, which I did after the first session, the risk in Scotland is utterly and fundamentally different from that in the rest of the UK. It is therefore not true to say that the risks to institutions in Scotland are the same.
Thank you for clarifying the role of university courts. Does the Scottish Funding Council set fiscal rules for colleges in respect of the attitude to debt and deficit? I want to understand that point, too.