There is a 'significant doubt' over the future of the University of Aberdeen, as the institution was unable to guarantee it can continue as a going concern.

As reported by The Scotsman the institution, the fifth-oldest university in the UK, has published its annual report and accounts which lay out several "external uncertainties" which could threaten its future.

Those include rising costs, a fall in the number of international students - who support university budgets through the fees they pay - and a cut in funding from the Scottish Government.

The reports said those factors "may cast significant doubt over the ability of the university and group to continue as a going concern".

However, a recovery plan designed to cut costs by £18.5 million should put the University of Aberdeen on a "firm financial footing for the future", the establishment said, and the accounts have been prepared on a going concern basis.

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The accounts state that the intake for international students was "lower than anticipated", leading to a "net shortfall in income" which would mean the university could not meet its debt service obligations for the coming years.

In response, the University of Aberdeen has developed a court-approved financial recovery plan and has agreed a refinancing package with its lenders.

That has incurred initial costs, including the repayment of £30m in bank loans, funded by money earmarked for redevelopment of the King's campus.

The university is also looking to reduce staffing costs by £12m.

The migration policy adopted by the Westminster government was also cited as a reason for the downturn in the number of international students.

Universities can charge up to £9,250 per year for students from the rest of the UK and more for international students, with no cap on the number they can recruit.

A 2023 report by Universities UK International found that international students in the 2021/22 academic year contributed £41.9 billion to the UK economy, around 10 times more than their estimated impact on public services of £4.4bn.

Prime Minister Rishi Sunak is considering curbs to graduate visas, plans opposed by Gillian Keegan, the education secretary, Jeremy Hunt, the chancellor and James Cleverly, the home secretary.

As reported by the Times, foreign secretary David Cameron warned: "One of the consequences of any restrictions on graduate visas is that universities will experience further financial difficulties — leading to job losses, closures and a reduction in research."

A University of Aberdeen spokesperson said: “The Annual Report which we began drafting some months ago, set out the potential risk, if the University of Aberdeen had not taken swift highly effective action to address financial challenges. The University has now reduced costs by a hefty £18.5m and is consequently on a firm financial footing for the future.

“Our financial situation has radically changed because of early retirement, voluntary severance, and operational efficiencies, as well as a major drive to grow and diversify our income.  

“The higher education sector has been impacted by the UK Government's stance on migration, which Universities UK links to the fall of 44% in recruitment of international students at over 70 universities in the 12 months to January this year - with a consequent dramatic fall in income from fees.  

“The Institute of Fiscal Studies highlights that Scottish Universities are also impacted by a fall of 19% over a decade in the value of Scottish Government funding. 

“The University of Aberdeen has been around for over 500 years. We are very confident that with continued agile, effective action we will survive and thrive, whatever the challenges facing the higher education sector.” 

A Scottish Government spokesperson said: “Our universities play a pivotal role in Scotland’s economy and society – and despite facing the most challenging budget since devolution, the Scottish Government will invest over £1 billion on teaching and research, including an increase in funding for research and innovation. This will ensure our universities continue to play a pivotal role in Scotland’s economic growth.”