HE bill won't affect Scots' drive

January 23, 2004

Scotland's higher education minister Jim Wallace tells Olga Wojtas that Scots universities have the edge over their southern counterparts

If top-up fees bite the dust in the House of Commons next Tuesday, the last thing to be heard from north of the border will surely be a collective sigh of relief on the grounds that nothing needs to be done.

"That's not the case. We've got to be continually on the alert. It's not only that we want to maintain competitiveness vis-a-vis the rest of the UK, but we're in a competitive international market," Jim Wallace, Scotland's deputy first minister and enterprise and lifelong learning minister, said.

"We have a higher education system in which we can take legitimate pride, but there's a challenge to maintain it. We're not being complacent in assuming that because it has had a reputation for excellence in the past that will simply continue."

So what is the price tag for maintaining competitiveness? Universities Scotland, the Association of University Teachers Scotland and the National Union of Students Scotland believe it is at least an extra £100 million. Mr Wallace's response, at a recent Universities Scotland conference, that their call for greater public funding was "unimaginative", provoked much disquiet.

He conceded that the universities perhaps felt he had not sufficiently acknowledged innovative moves, for example, towards collaborative centres of advanced research that could challenge the research elite south of the border.

"I recognise the value of what they are doing. I think they can bring together a critical mass of internationally renowned and competitive research," he said.

He stressed that he would fight for a good settlement in Scotland's forthcoming spending review. He said Scotland's higher education had had a 6.9 per cent increase in real terms in the present spending review.

"The important role our universities play in Scotland's economic growth has been increasingly recognised. We have challenges to retain our competitive edge and there should be appropriate funding, but I can't commit any sum ahead of the review," he said.

Underpinning his bid will be the report from the third phase of Scotland's higher education review, which will examine the impact of potential funding changes south of the border if the bill introducing top-up fees is passed.

There would be no kneejerk Scottish reaction should the bill go through, Mr Wallace said. If England introduced top-up fees, he said it remained unclear whether cash would flow north via the Barnett formula, which aims to ensure that an increase in public funding in England is reflected in a proportionate rise for Scotland.

"The Department for Education and Skills has suggested that funding for the improved student-support package is coming from its existing budget. If that's the case, there wouldn't be any Barnett consequentials," he said.

But it will take time for graduate repayments to be recouped through taxation, making the system closer to self-financing. Until such time, the Treasury will have to cover the cost of the higher fees charged by English universities, amounting to an increase in public funding that could well be reflected in the Barnett formula.

Mr Wallace said: "Therefore, it's not fanciful to think there might have to be some upfront and ongoing public subsidy. That is obviously something we've not had confirmation of, but if additional funding is available, we would expect there to be consequentials for the Scottish budget."

He refused to speculate on the amount and would not say if he thought extra Barnett cash should be earmarked for Scottish higher education. Mr Wallace said he intended to make the case for the sector's funding on its merits, rather than being hamstrung by specific sums that may or may not be forthcoming.

He warned that given the different higher education systems north and south of the border, it was difficult to make direct funding comparisons. But he believes Scotland is in the lead, and does not see the white paper eroding this as badly as has been suggested. Scotland, for example, has already achieved a 50 per cent participation rate.

"There must be a fairly significant element of additional funding in England for raising (its) participation rate to bring it closer to ours," he said. "I think Scottish students will still be materially better off, even before we address the (Scottish Executive) partnership commitment to look at the level of student bursaries and the eligibility threshold."

Scottish undergraduates pay no tuition fees, there is a sliding scale of bursaries for the less well off and many are exempt from the £2,030 graduate endowment payment.

Mr Wallace said: "In England, fees will have to be paid. It will remain the case that English students will come out of university with higher levels of debt than Scottish students."

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