Drama provision at Scotland’s arts conservatoire, the Royal Scottish Academy of Music and Drama, seems secure following the First Minister’s intervention last week to reassure some of its most famous alumni and students of his support.

Alex Salmond made public a letter he had written to James McAvoy, the Drumchapel-born star of films Atonement and The Last King of Scotland, underlining the Scottish Government’s commitment to maintaining world-class drama provision in Scotland.

He stressed that the Government could not and would not intervene in plans by the RSAMD’s management team to cut staffing as part of a restructuring plan to make the institution more financially viable.

These plans, announced earlier this year, will involve making some staff redundant and move others to part-time posts. They coincided with the embarrassment of one of the RSAMD’s productions, Eugene Onegin, making a loss of pound;100,000 when it was staged at the Theatre Royal in Glasgow.

The academy is seeking to save pound;600,000 through its restructuring. Its management team’s intention had been to phase in a nationally-agreed pay rise for staff, but the academy’s board insisted it award the increase in full and re-evaluate its finances. The resultant restructuring proposal has caused consternation among staff and current and former students, including Mr McAvoy and fellow actors Bill Paterson, Brian Cox, David Tennant, Billy Boyd and Alan Cumming.

The Scottish Funding Council will now undertake a review of the funding of drama provision across Scotland, which traditionally has been at a much lower level than south of the border. Should the formula change as a result of this review, any extra money will not come on stream until 2009-10.

That review will also consider whether the scale, location and type of drama and related provision in Scotland is right and what impact there will be from the decision by Queen Margaret University in Edinburgh to stop accepting drama students. That decision was also prompted by the funding formula for drama - QMU principal Anthony Cohen said his institution did not receive funding equivalent to drama schools elsewhere in the UK.

Mr Salmond said: “The council’s primary concern will be to ensure future generation of Scots have access to high-quality drama provision. As part of their initial work, the council has already met student representatives from the RSAMD to hear their views first hand. I cannot anticipate the outcome of that review but I am sure you will be pleased that the issue of conservatoire status of drama is now being addressed after 16 years.”

It seems unlikely the Scottish Government will bail out the RSAMD in the same way it intervened in the funding problems facing Glasgow University’s Crichton campus.

Fiona Hyslop, the Education and Lifelong Learning Secretary, had received an assurance from John Wallace, principal of the RSAMD, that the academy was in a stable financial position, Mr Salmond said.

RSAMD students told the SFC their main concerns were that:

- the restructuring plans will impact on the level of academic support available to drama and music students;

- the majority of staff put in “goodwill hours” pro bono - a reason for maintaining their full-time contracts;

- the RSAMD’s world-class reputation contributes directly to students’ employability; this was already suffering as a result of the planned restructuring. Some students were already considering transferring to other institutions; prospective students were reconsidering their applications to the academy, and one costume-maker has already moved to work for a national supermarket;

- Reductions in staffing would have an effect on the level and quality of outreach work and the appraisal of academic work;

- Any change to the availability of industry work experience would be detrimental to students’ employability.