Leaders: England's plans test the strength of devolution

Nowhere has the impact of devolution been more obvious than in education - and higher education in particular. Upfront tuition fees have been abolished, school league tables abandoned and initiatives championed in Whitehall quietly ignored. At times it has seemed that debates in Cardiff and Edinburgh start from the premise that the English approach is ruled out. But the higher education white paper is demonstrating the limits of Celtic freedom, even though its remit does not stretch beyond England.

In important areas, Scotland and Wales are ahead of the agenda set by education secretary Charles Clarke. The Welsh are more advanced on institutional reorganisation, with two mergers progressing in the past fortnight, while the Scots have led the way in widening participation and reforming student support. Ministers in Westminster, who agonise over the interface between further and higher education, need look no further than north of the border for a system that has helped deliver 50 per cent participation already. They will also be aware of the surge in applications that followed the Cubie-inspired switch from conventional fees to graduate contributions. But on the key question of a future funding model, roles may well be reversed. Unlike those in Wales, universities in Scotland have been enjoying better funding levels than their counterparts elsewhere in the UK, and yesterday's budget announcements will keep them ahead for the moment. Although their 5 per cent increase is less than in England, they start from a higher base and no institution faces a real-terms cut. But all bets will be off when top-up fees arrive in England. Celtic academics and politicians are united in their opposition to higher charges, but neither group will want to see their universities lose their competitive edge.

The dilemma will test the commitment to education of which the Scots and Welsh are rightly proud. At a time when Scotland's generous public spending is under pressure, it is hard to see the executive opting for higher taxation to bail out the universities. But, if top-up fees remain beyond the pale, the alternative will be an uncomfortable combination of growing popularity and declining resources. The question may not arise in Cardiff, where confusion still reigns over the assembly's future powers. The maintenance of fee levels until 2007 will show the effect on UK student demand of the availability of cut-price three-year courses, but it may be no more than a one-year experiment.