Exclusive:Business case to be lodged for restructure of University of the Highlands and Islands (UHI)

Consultation expected on proposals for network of colleges to act more ‘as one’

A restructure of the University of the Highlands and Islands (UHI) could move to the next stage within weeks as bosses draw up plans for the network of colleges to “act as one”.

The Scotsman understands an outline business case for changing the way UHI works will be lodged with the Scottish Funding Council (SFC) imminently.

Consultation will then be held on the proposals, before a final business case is agreed and a decision is made on the new “target operating model”.

Drone image of the University of Highlands and Islands campus in Fort William

It has been agreed that the new-look UHI will continue to be “regional”, and any changes will need the support of all the partners involved to proceed.

Vicki Nairn, the UHI principal, has made clear the university will continue to be “locally based and geographically dispersed”.

UHI is a network of colleges that was awarded university status 2011, after a long campaign to create an institution that would allow young residents to stay and study degree-level courses in the region, rather than leave their communities.

It now has 36,000 students studying in further and higher education across 70 centres.

Vicki Nairn expressed excitement at the Gaelic plan

However, The Scotsman revealed in January that the UHI was the subject of an ongoing “comprehensive review” into its future.

It comes as colleges and universities continue to struggle to deal with Scottish Government funding cuts, high inflation, and difficulties recruiting fee-paying international students, in part due to UK government immigration changes.

Graeme Dey, the further and higher education minister, has said the Scottish Government remains “absolutely committed” to the concept of UHI, but that it will “have to evolve to meet some of the challenges that are there”.

The SNP minister added earlier this year that there needed to be more collaboration between colleges, while "recognising that you might not be able to deliver every discipline in every specific locality".

The university has already been undergoing a significant shake-up, including the completion last year of the merger of three of its colleges - UHI North Highland, UHI Outer Hebrides and UHI West Highland.

Meanwhile, dozens of proposed job losses have also been met with alarm at several of the sites, including in the UHI executive office in Inverness, as well as partner colleges at Shetland, Moray, Perth and Stornoway.

In its annual report for last year, UHI said its latest financial forecasts submitted to the SFC in June 2023 were “clearly not sustainable”, even with a margin of improvement for recovery plans, with several partners “forecasting cash deficits in the coming year”.

Board chairs and principals have been working on “accelerated change” since the summer of 2022, with a number of reviews and savings measures implemented already.

However, the report said: “Where the programme has been less successful is developing the operational detail of what and how ‘acting as one’ means in practice, the efficiency gains that is likely to bring and the changes that are required to deliver it.

"For example, work on how functions within executive office dovetail with the same functions delivered by academic partners, how single or shared services might be developed and delivered, and the operational shape that we desire to be.

"It is in these areas that the more substantial and partnership wide savings were to be made and are therefore not currently being realised.”

Meetings to discuss the new structure have been held regularly since the end of August last year, with the discussions looking at how the restructure will be implemented, and “what legislative or regulatory changes may be required”.

In February, UHI appointed Mike Baxter as its new executive director of finance, joining from the Scottish Qualifications Authority (SQA), where he was director of finance and corporate service.

Ms Nairn was confirmed as principal in the following month, having held the post on an interim basis since October 2022.

The Scotsman asked UHI if working “as one”, and the development of more single and shared services, would result in greater centralisation.

In a statement, the principal said: “As part of our new 2030 Strategic Plan, UHI is responding to the significant challenges the education sector in Scotland is facing in the current economic climate, which includes an extremely competitive recruitment market in further and higher education, post pandemic and Brexit recovery, together with flat cash government funding and unfunded pay increases which in real terms means a significant decrease in funding.

"Business as usual discussions are in progress with the SFC with regard to requesting ongoing funding support for the UHI partnership, as part of our overall approach to financial sustainability and as outlined under the operational excellence theme of our 2030 Strategic Plan.

"In this commitment within the 2030 Strategic Plan, the UHI partnership has committed to ‘be a fully integrated, sustainable and people-oriented organisation’. Increasing recognition of UHI as a financially sustainable, well managed organisation by funders and stakeholders and in line with UHI’s founding mission of having a transformational impact on the people, communities and economy of our regions.

“As part of this approach, like all other institutions at the current time, we are reviewing our systems and processes across the partnership to understand how we can be more effective and efficient, including working with the SFC.

"Students, learning, teaching and research remains at the heart of everything we do and will continue to be locally based and geographically dispersed, delivering educational excellence across communities.”