HALF of Scotland’s universities are running at a loss compared to just one in eight in England sparking fears over the financial sustainability of the sector.

According to new figures nine of the country’s 18 higher education institutions recorded a deficit in 2016/17 amounting to a total of £25 million.

Institutions running at a loss include Aberdeen, Dundee, Glasgow Caledonian, Heriot-Watt, Queen Margaret, Robert Gordon, Stirling, UHI and the University of the West of Scotland.

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However, overall the sector was in the black by £197m thanks to a very significant operating surplus at Edinburgh University of more than £130m. Glasgow University had a surplus of £56m.

The figures from the Higher Education Statistics Agency come at a time of concern over levels of public funding which have seen real term cuts.

In 2016 a report by Audit Scotland concluded that universities were facing “significant” future challenges because of growing pressures including increasing costs and potential reductions in funding from the public purse and international student fees. The report found public funding had reduced by six per cent in real terms since 2010/11.

Alastair Sim, director of Universities Scotland, which represents principals, said universities were expecting further cost pressures related to pay and pensions in the near future.

He said: “The figures are a snapshot of financial health for the year, so they can sometimes reflect the short-term impact of big programmes of expenditure, but this picture is not a one-off for universities in Scotland, it represents a continuing state of financial pressure.”

Mr Sim said universities had worked hard to make public investment go as far as possible and stressed the sector’s performance was “strong”.

But he added: “There are even bigger pressures ahead. We have a pay deal for staff to fund and several institutions face a major challenge to keep the pension fund sustainable over the long term for their staff.”

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Liz Smith, education spokeswoman for the Scottish Conservatives, said: “If it were not for the very strong performances at Edinburgh and Glasgow universities there would have been an overall decrease in the surplus for the sector as a whole.

“At a time when universities are under huge financial pressures, the extent of which was set out clearly by Audit Scotland, it is a real worry to see half our higher education institutions in the red.”

Iain Gray, education spokesman for the Scottish Labour Party, added: “The Scottish Government has been warned for long enough that their funding of higher education is not sustainable in the long run. We have told them, universities have told them and the auditor general has told them.”

A Scottish Government spokesman said: “We recognise the higher education sector in Scotland is essential in continuing to support Scotland’s economy and we want to maximise the impact of this. That is why we have invested over £1 billion of public money per year since 2012/13. This level of investment allows universities in Scotland to remain internationally competitive and truly excellent in global terms. “This year we will deliver an increase in Scottish Funding Council funding - both Further Education and Higher Education budgets - demonstrating our sustained commitment to the achievement of excellence and equity in education. This very positive settlement will allow enhanced teaching support and drive greater impact from our world-class research and innovation in our universities.

“We are working with the sector to secure greater efficiencies, maintain the high quality of education and ensure core outcomes are met and protected. In the coming months we will be discussing future budgets with the University sector as part of preparing for 19/20 financial year.”

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UK-wide guidance on sustainability levels suggests institutions should run a surplus of 6.5 per cent of total income to cover the full economic cost of teaching and research.

Figures show the largest deficit was £7.5m at Aberdeen University followed by £5.6m at Robert Gordon and £5.2m at Heriot-Watt.