A key proposal in the Scottish Government’s funding solution for higher education would bring significant benefits to just four of the country’s universities.
Official figures suggest moves to charge higher fees to students from England and elsewhere in the UK would increase income for the universities of Edinburgh, St Andrews, Glasgow and Aberdeen – where 75% of those from south of the Border study.
Many newer universities would not capitalise on the increase to the same extent, raising concerns the policy would create a two-tier system.
And any attempt to rebalance the funding by giving money equally to all universities is likely to be hotly disputed by those institutions that currently benefit most.
The proposed fee rise of between £4500 and £6500 for students from the rest of the UK was part of the Green Paper on higher education funding unveiled by Michael Russell, the Education Secretary, last week.
The move is primarily to stop Scottish higher education becoming a cheap option for students south of the Border who face tuition fees increases of up to £9000 a year.
Increasing tuition costs here does not directly impact on students from Scotland because the Government pays their fees for them, but it would lead to a significant increase in funds coming into Scotland.
However, recent figures from the Higher Education Statistics Agency show the proportion of students from England attending Scottish universities is heavily weighted towards the ancient universities.
Of the 14,500 students from England who went to Scottish universities in 2008-09, 40% went to Edinburgh, 15% to St Andrews and 10% each to Aberdeen and Glasgow.
If the annual fee was increased to £6000 per student – and universities were allowed to keep the money – it could see Edinburgh net a total of £33m.
However, an institution such as Glasgow Caledonian University, which had only 155 students from England, would earn less than £1m.
A spokesman for NUS Scotland said: “Whatever happens in the future, we can’t have a system that favours one type of institution over another. We do have to manage demand for Scottish universities, but this can’t create unintended consequences where the benefit to certain institutions is far greater than to others.”
Des McNulty, education spokesman for the Scottish Labour Party, said: “Mr Russell has trumpeted the increases in fees to students from England as a way of redressing the funding problems our universities now face, but these figures show that most of the higher education institutions in Scotland would benefit very little.”
And a senior university source said there was concern that the policy, while it might benefit universities, would not on its own safeguard the future of higher education here.
A spokeswoman for the Scottish Government responded: “This is one of various issues that we will be looking at as part of the ongoing discussions on the Green Paper.”
The Green Paper states: “We believe that part of the Scottish solution should be ... the sector being allowed to retain the additional income.
“There might also be a move to distribute the extra income more widely across the sector rather than simply allow it to be retained by the universities which traditionally attract greater numbers of these students.”
Meanwhile, Liz Smith, education spokeswoman for the Scottish Conservatives, claimed the Green Paper had not taken “a single step” towards addressing the funding gap.
And Margaret Smith, her counterpart at the Scottish Liberal Democrats, added: “We need a long-term solution to higher education funding in Scotland.
“That’s why Liberal Democrats are committed to working with opposition parties, the Government and university and student representatives to develop the way forward.”


Why is this probably mistaken?

For English students in Scottish universities, the Scottish Funding Council (SFC) makes the assumption that they pay a fee of £1825 each per year. And the teaching grant they give for each of these students is reduced by that amount from an initial baseline that they call "the unit of teaching resource" (UoR): the UoR varies from almost £9000 for engineering students to just over £4000 for social science students (medical students are a slightly special case).
 
If SFC maintained that methodology post-2012 (i.e. reducing the teaching grant for English students by the amount of the increased tuition fee), the English students attracted to St Andrews, Glasgow, Edinburgh and Aberdeen would therefore have a broadly neutral effect on the total teaching income of these 4 universities; the effect on the other 16 HEIs in Scotland might even, other things being equal, be a positive one - as SFC would have less call on its total teaching grant from these 4 universities.
 
This scenario depends on several assumptions about which at present we have no certainty. But it is perhaps as plausible a scenario as the one presented in the Herald of 20 December.
 
Interesting issues.