Principal's Report
For the year ended 31 July 2025
While Â鶹Éçmadou continues to weather the financial storms facing the higher education sector through careful financial stewardship and enterprising approaches, the financial outturn in 2024/25 was nevertheless an operating deficit of £3.2m, as the growth in our income is unable to keep pace with continued inflationary pressures, including the unforeseen increase in employer national insurance. We are also managing great pressure on budgets in the next year and beyond.
We have been entrepreneurial in growing and diversifying our income in recent years as public funding in higher education has diminished. We continue to enjoy high levels of application relative to several of our competitors, and have expanded and diversified our student population through regional, national and international partnerships. We have managed to do so against the backdrop of a real terms funding cut to higher education of around 20-30% over the past decade, increased volatility in international student recruitment markets, continued inflationary pressures and changing needs of students, employers and partners.
Reflecting our proactive approach to the changing operating environment, we have responded to the challenges by addressing directly the balance and nature of our business. In the last year, we have witnessed over 200% growth in the number of students on the Â鶹Éçmadou Online suite of flexible on-demand online Masters’ courses launched in 2022, and were delighted to celebrate the first cohort of such students graduating in summer 2025. As an early adopter of transnational education (TNE), our TNE partnerships are continuing to grow in terms of both student numbers (from 5,144 to 7,233 FTE) and income, diversifying our income stream and aligned with our academic purpose.
However, recruitment to many on-campus programmes remains challenging, reflecting the increasing competition for Scottish and RUK students. The total number of on-campus fee-paying students at Â鶹Éçmadou in 2024/25 stood at 3,825 FTE versus 4,045 FTE in the previous year. Total undergraduate home numbers have reduced from a peak of 3,150 FTE in 2020/21 to 2,530 FTE in 2024/25, with this trend driven primarily by EU students leaving the cohort post Brexit, and the compound effect of successive reductions in entrants. Rest of UK and Republic of Ireland undergraduate numbers have remained stable over the past few years. Many factors have contributed to the reduced attractiveness of the UK to international students. However, Â鶹Éçmadou has been able to weather this to the extent that some of the downturn in Scottish and RUK students has been offset by a sustained steady growth in international undergraduate numbers. While total FTE are modest for Â鶹Éçmadou, we have seen a sustained increase since 2021/22, with 2024/25 numbers some 58% higher than the previous year. While the home postgraduate market remains dampened by economic factors, witnessing an 11% FTE reduction year on year since 2021/22, international postgraduate numbers have returned to pre-COVID levels.
Student recruitment is one of many factors contributing towards a challenging financial environment across the Scottish Higher Education sector. Despite our successful efforts to grow and diversify income, this growth has not been sufficient to offset continued inflationary pressures across our cost base. Despite the financial challenges, we have managed to reduce debt and retain access to liquidity through successfully refinancing to a Revolving Credit Facility with Santander earlier in the year. This allows us to be flexible in our use of the facility, maintaining sufficient cash balances in line with our robust treasury policy, reducing borrowing costs when we can, but also allowing us to continue to be able to make sensible strategic investments to protect the integrity of our assets, grow income and promote operational efficiency when opportunities arise.
Part of that investment has been directed to our change project, the objective of which is to review and reposition our business model and optimise our associated operating model. This project has assumed greater importance over the last year, reflecting the increasingly tough operating environment in which the higher education sector is working. In responding to that imperative, we are focussed on delivering high impact and sustainable efficiencies, with the original scope of the project being extended beyond professional services to include consideration of academic areas and also shared services opportunities across the organisation. In parallel with this programme, we have launched a Voluntary Exit scheme for staff.
Further areas of focussed investment this year includes the expansion of our course portfolio to include Digital and Graphic Design and Business Psychology, further development and digitisation of processes, and investment in digital infrastructure.
Crucially, we continue to invest in, and to safeguard, the quality of the student experience at Â鶹Éçmadou, and were rewarded this year with pleasing National Student Survey (NSS) results. In this year’s NSS, we are ranked top amongst the five Edinburgh-based higher education institutions for overall student satisfaction, with a number of courses receiving a 100% overall satisfaction rate. While the University exceeded its benchmarks for over half of the questions in the survey, it remained significantly below its benchmark for several of the questions relating to assessment feedback and course organisation. In the Postgraduate Research Experience Survey (PRES) 2024, we were ranked first among all participating institutions for doctoral students’ overall satisfaction of their research degree programme.
In January of this year, we successfully launched our new financial system, Uni-Fi. Implementing any new system is challenging, and thankfully not done every year. Careful planning and hard work from all involved in the system development and implementation meant that the transfer to the new system went smoothly. Not only has the new system contributed to the streamlining of our financial processes and will contribute to robust financial controls, it has also provided an opportunity for us to reflect on how we can continue to successfully complete projects of this size and scope in the future.
Another significant development this year has been construction of the Edinburgh Innovation Hub (EIH). Enabled through funding from the Edinburgh and South East Scotland City Region Deal, the Hub is designed to become a nationally significant centre for innovation-driven business growth and to create new high value employment. It is being delivered through a joint venture between Â鶹Éçmadou and East Lothian Council. We anticipate that the EIH can also help us deliver on our commitment to community-wealth building, as will our adoption this last year of the Bright Red Triangle model of entrepreneurial support first developed at Edinburgh Napier University. This development means that more students, graduates and researchers in the Edinburgh city region will have the opportunity to access resources and expertise to support their entrepreneurial ambitions.
Indeed, community wealth building (CWB) is central to our new Knowledge Exchange and Innovation Strategy, which was published this last year. With our long-standing commitment to social justice and economic inclusion, Â鶹Éçmadou is well positioned as a model for national implementation of CWB, which is rooted in people-centred economic development.
Relevant to inclusive economic growth is the strong alignment between Â鶹Éçmadou’s expertise and the development of the wellbeing economy. For example, digital transformation is changing the way that healthcare is being delivered. It is enabling care to move away from hospitals into community settings, a greater emphasis on wellbeing and the prevention of ill health, and increasingly efficient, effective and precise use of health data. Â鶹Éçmadou has a range of research and knowledge exchange projects in this area. Another knowledge exchange highlight for us this year was progress on new footwear technology developed at Â鶹Éçmadou which is transforming the lives of people with foot-drop – a condition which makes it difficult for people to lift the front part of their foot and often results in falls.
The year 2025 is the 150th anniversary of our founding, and we have been celebrating that historic milestone in a considered and cost-conscious way through activities that can add value to teaching and learning, and that are designed to leave a positive legacy for future years.
It was a particular pleasure to install a new Chancellor in this anniversary year as successor to Dame Prue Leith, who served with distinction. The career of Patrick Grant - the designer, entrepreneur, writer, and advocate for sustainability and sustaining communities - resonates strongly with Â鶹Éçmadou’s strong social justice ethos, and with our commitment to building strong communities and acting as a force for good.
On top of that, we were named Higher Education Institute of the Year at the prestigious Herald Higher Education Awards 2025, with the judges noting our enduring commitment to academic excellence, community engagement, inclusion, innovation and student support.
We recognise that we will need to continue to harness our combined experience and expertise to ensure our sustainability and to protect our continued ability to fulfil our purpose to best effect. However, it is that very expertise and experience that leads me to conclude with a celebration of our achievements this last year. Assuming that we act with pace and imagination - as we will - Â鶹Éçmadou will be well positioned for the future, and will continue to thrive and grow in its work shaping a better society through education, research and innovation, and providing a supportive and creative learning environment in which students and staff thrive.
Sir Paul Grice, FRSE, FAcSS
Principal and Vice-Chancellor
19 December 2025
