Scotland's first minister Jack McConnell has ruled out top-up fees north of the border. But, despite welcoming the decision, Scottish higher education institutions warned that without a cash injection by other means they face deteriorating conditions, a brain drain of staff and an influx of English students.
The Scottish Executive will not consider the financial implications of the white paper until after the parliamentary elections in May. But Iain Gray, minister for enterprise, transport and lifelong learning, has provoked widespread dismay and frustration by insisting that any spending gap currently favours Scotland and that England is just catching up.
Direct comparisons were impossible because the Scottish and English systems were funded and organised differently, he said. For example, higher education in Scottish further education colleges was funded through the further education budget. And the English increase included research funds to which Scottish institutions would have access.
But the Association of University Teachers Scotland warned of an £85 million shortfall over the next three years, worsening with the introduction of English top-up fees. David Bleiman, AUT assistant general secretary, said universities were one of Scotland's greatest competitive advantages, attracting quality jobs, developing the knowledge economy and boosting public services. "If Scottish universities are unable to pay the going rate for high-quality staff, all that is in peril."
Universities Scotland said that although Scottish institutions had already delivered on many of the white paper's priorities, they were being set still more ambitious targets by the Scottish Executive. Convener Bill Stevely said: "We face exactly the same funding difficulties that universities in England do, and we are competing in exactly the same domestic and international markets for staff, students and research contracts. Iain Gray must find more money for Scottish higher education."
There are fears that a wave of English applicants trying to escape top-up fees could lead to damaging shifts in cross-border student flow. Sir Graeme Davies, principal of Glasgow University, said he was opposed in principle to a quota system safeguarding places for Scottish students but was conscious of the difficulties of avoiding such measures. "I would not like to see able students in Scotland disadvantaged in any way," he said.
But Mr Bleiman said the idea of quotas was abhorrent. "Instead of speculating about how to keep the English out, we should be concerned about maintaining freedom of movement for students and the danger of top-up fees pricing Scottish students out of English universities," he said.
Bernard King, principal of the University of Abertay Dundee, said the white paper's proposal to focus on research would savage higher education's ability to foster economic development. New universities' commitments to meeting regional and national needs, such as Abertay's research centre for the computer games and digital entertainment industry, were a key economic prop, he said.