English policy gives Scotland headache

In the run-up to the Scottish Parliamentary elections on May 1, the BBC commissioned a survey to gauge public opinion about 21 policies that future MSPs might pursue.

The most unpopular proposal was the introduction of top-up fees by universities. This was ranked even less desirable than charging motorists to enter city centres and spending more on the arts. Fortunately for voters, none of the political parties north of the border wants top-up fees and neither do any of the universities.

That the question was asked, however, illustrates the dilemma facing Scottish politicians. They want to point to the distinctive society the parliament can help to create, but they are constrained not only by the amount of money flowing from the Treasury in London but also by the influence of policies devised for England in areas where power remains with Westminster. The pressure on first minister Jack McConnell and his ministers is all the greater because of the influence of the Labour Party on the ruling coalition.

If Scotland resists pressure to introduce top-up fees and if, as looks likely, there is to be more money from 2006 for higher education south of the border than in Scotland, where does that leave Scottish universities, especially those such as Edinburgh, which aspire to be in the international premier league for research? Labour and the Liberal Democrats point to the extra money for higher and further education over the past four years, and both parties promise more, but the issue of relative funding on either side of the border is bound to become pressing in the next four years.

Higher education, excluding research funding, was devolved to Edinburgh in 1999. Flexing their muscles and struggling to honour a coalition-threatening Lib Dem pledge to abolish student tuition fees, MSPs abolished them, to the dismay of the Treasury and the Whitehall education department.

It was not the first time that the Edinburgh Parliament had exercised its autonomy. But the scope of the Scottish Enterprise and Lifelong Learning Department to give the Scottish Higher Education Funding Council the money to tackle the sector's demands is limited. University salaries remain determined at UK level, while at least the highest-ranked English institutions will have access to extra resources denied to their northern counterparts.

The principal opposition in the Holyrood Parliament is the Scottish National Party, led by John Swinney. It alone of the major players in the election has a solution to hand. Independence and exploitation of underdeveloped resources within Scotland - human and financial - would allow Scotland to take its place among the most prosperous of small nations.

Leaving aside the much-argued economic issue of whether an independent Scotland would be richer or poorer, voters have to ask themselves whether an SNP-led executive would be better at funding education and health under the existing devolved system as well as preparing for an independence referendum that even many nationalists think would fail.

Tapping North Sea oil revenues to give students free education is one thing. But promising that extra money for public services, including student support, would be available through four years' planned savings in the bureaucracy of the enterprise network is asking a lot of voters' trust.

The SNP has dismissed the prospect of a coalition with the Conservatives, but the two parties are united in the area of higher education that might influence the electorate - the claim that the abolition of student tuition fees is a myth.

Fees are merely pain deferred because graduates have to start making payments towards their higher education as soon as they earn £10,000 a year. David McLetchie and his fellow Tories have come up with a Saltire Scholarship for all students attaining a minimum standard. This would cover tuition fees even for those Scottish students who choose to study at English universities.

Liberal Democrat Jim Wallace points out that no student now pays fees and that grants have been reintroduced for the less well-off. But, along with Labour, they accept that £10,000 is too low a threshold for starting graduate payments.

The Coalition of Higher Education Students in Scotland is pressing for the graduate endowment, if there has to be one, not to be repaid until earnings reach a level where graduates are truly benefiting from their degree - for example, the Cubie report's recommended £25,000.

"The new threshold of £15,000, scheduled to take effect from April 2005, is a welcome improvement but still does not address the problem," Chess's manifesto says.

The Edinburgh Parliament was born to be consensual, not only in having a voting system that makes coalitions the probable norm but also in giving wide powers to subject committees where MSPs from all parties frequently find common ground. The creation of a ministry embracing enterprise and all forms of post-16 education has proved useful, and promises to be more so in that all parties recognise that the Scottish economy is underperforming and that a "smart successful Scotland" (in the rhetoric of the executive's strategy) depends on innovation and enterprise from further education colleges and universities. Labour restates its intention to merge the funding councils for higher and further education.

The electoral system favours stability. If a party loses a first-past-the-post constituency seat, it may find compensation from the second votes for top-up regional lists. Unless the polls are seriously awry, Labour will remain the largest party but will need a partner, probably the Liberal Democrats again. There are likely to be a few more representatives of smaller parties - such as the Scottish Socialists and the Greens - which, depending on the electoral arithmetic on May 2, might influence the nature of a coalition.

For higher education, the outcome would mean more of the same, and David Caldwell, director of Universities Scotland, has already warned all parties that their manifestoes do not answer the challenges facing higher education, among which the cross-border financial relationship springing from devolution is the most urgent.

Scotland's 21 universities are afraid top-up fees will enable English universities to raid their top research teams. "The executive has the responsibility to find an answer to this problem. Unless it fully funds the sector, we are going to suffer in comparison with the English institutions," Mr Caldwell said.

"Whichever way you present it, the amount of resource it has put into the spending period is not enough," he said.