KFJECH General Assembly Hall and New College, The University of Edinburgh on the Mound hill in Edinburgh, Scotland, UK
KFJECH General Assembly Hall and New College, The University of Edinburgh on the Mound hill in Edinburgh, Scotland, UK
KFJECH General Assembly Hall and New College, The University of Edinburgh on the Mound hill in Edinburgh, Scotland, UK
KFJECH General Assembly Hall and New College, The University of Edinburgh on the Mound hill in Edinburgh, Scotland, UK

No-deal Brexit prospect sends tremors through Scottish universities


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Scottish universities are concerned there could be an exodus of foreign students and academics after Brexit.

Scotland’s government has called for a European student exchange programme to continue even if no withdrawal agreement is reached with the EU.

Scotland’s higher education minister Richard Lochhead and his Welsh counterpart Kirsty Williams are seeking assurances over the future of the Erasmus+ scheme, which allows students from EU countries to temporarily study in another state in the bloc as part of their university course.

It is estimated that more than 15,000 students and staff from Scotland took part in the EU-led scheme between 2014 and 2018.

The ministers said it was unacceptable that with 12 weeks to go until the UK government plans to take the UK out of the EU, the future of the programme remains uncertain.

"Thousands of Scottish students benefit from Erasmus+ yearly, proportionally more than from any other country in the UK,” Mr Lochhead wrote in a letter to the UK government.

"The Scottish and Welsh Governments are clear that we must remain a full participant in Erasmus+.”

The Department for Education said that it was exploring alternatives to take over the scheme.

"The UK Government has also repeatedly made clear that it values international exchange and collaboration in education, which is why we are exploring participation in the successor scheme and preparing for a range of potential outcomes," a spokeswoman said.

The future of the Erasmus scheme is just one of many concerns Scottish educators have about the UK’s impending exit from the EU, currently scheduled for October 31.

As it stands, Scotland has a reputation as having one of the best higher education systems in the world.

The University of Edinburgh is consistently ranked in the top 50 in the QS World University Rankings, while Edinburgh-based Heriot Watt university, named International University of the Year in 2018, was the first campus of an overseas university to open in Dubai International Academic City.

Heriot-Watt University Dubai. Alamy
Heriot-Watt University Dubai. Alamy

Alongside its reputation for academic excellence, Scotland is an attractive destination for EU students looking to study in the UK because tuition fees, subsidised by the Scottish government, are free or much lower than at universities in England, Wales and Northern Ireland.

Around 7.9 per cent of the undergraduates at Scottish universities are EU nationals, while around a fifth of teaching staff are from the EU, according to figures from the Scottish Funding Council (SFC).

However, after Brexit, EU students are likely to lose the subsidies and pay the same rate as international students from outside of Europe.

The Scottish government has extended the guarantee of free tuition for eligible EU nationals starting in the 2019-2020 academic year but the future is unclear after that.

Another problem affecting Scottish universities is uncertainty over visa rules. If there is a no withdrawal agreement agreed with the EU, then a university student will by default receive only a three-year visa. Courses in England are usually three years compared to four in Scotland.

Dr Esther Mijers, senior lecturer in Scottish History at the University of Edinburgh, said the continued uncertainty for students and questions over access to European research funding, could put off prospective students and academics.

"I think the students that were already keen to come will still come but possibly their younger brothers and sisters will consider other opportunities," Dr Mijers told The National.

“On top of that, we could start losing international staff - they don’t have to come to the UK. People have choices and that is going to make universities more inward looking, which goes directly against what they should stand for,” she added.

A recent study found that there was an 11 per cent rise in the number of EU academics leaving the Russell Group, an elite group of universities in the UK, between 2015/2016 and 2016/2017. However, it is not possible to say whether this is a result of the EU referendum result in 2016.

British prime minister Boris Johnson, who has promised to take the UK out of the EU with or without a deal, has sought to allay some concerns by introducing fast-track visas for the world’s top scientists, engineers and mathematicians.

Dominic Cummings, former special adviser for Britain's Prime Minister Boris Johnson. Reuters
Dominic Cummings, former special adviser for Britain's Prime Minister Boris Johnson. Reuters

He sent top government aide and Brexiteer campaigner Dominic Cummings to relay his message to top scientists. Mr Cummings wrote an essay in 2013 saying the UK should seek to reinvent itself as “the leading country for education and science” in an effort to find its “post-imperial role”.

However, the news was met with some scepticism by those in the meeting, including developmental neurologist Dorothy Bishop, who told Politico she felt that Mr Cummings lacked an understanding of the importance of the UK's scientific links with the EU.

Dr Stuart Fancey, director of research and innovation at the SFC – a body which funds universities and colleges in Scotland, said it was imperative that EU students and academics feel welcome in the UK.

"In some disciplines, EU nationals make up a really large fraction of the research effort. Therefore, part of why Scotland and by extension the UK is well considered overseas is because we have a diverse and cosmopolitan research community," he told The National.

“We want that to continue so we will always make the argument that Scotland is an attractive place to study, work and make a life.”

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Timeline

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May 2017

The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts

September 2021

Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act

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Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence 

December 2024

Petrofac enters into comprehensive restructuring to strengthen the financial position of the group

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The High Court of England and Wales approves the company’s restructuring plan

July 2025

The Court of Appeal issues a judgment challenging parts of the restructuring plan

August 2025

Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”