Incentive to deliver its priorities
Scotland's universities claimed this week they had won "more freedom and more influence" as a result of agreement with the Government on the joint future thinking taskforce for the sector.
But Sir Muir Russell, convener of Universities Scotland, acknowledged that "the report hasn't solved the funding issues facing the higher education sector in the coming years, but it has given us an unprecedented opportunity to make our case directly to the heart of government".
The draft report from the taskforce, published on Tuesday, proposes a symbolic shift so that universities are treated by the Government as "the seventh sector" of the economy, in recognition of their contribution to the country's well-being. They will also be given the unique right to take their case directly to a meeting of the Scottish Cabinet.
In return, universities will be expected to demonstrate that they are using government funds to support government policies on economic growth.
These moves will raise a wry smile in other areas of education, particularly among colleges, which always believed universities had more than their fair share of access to the corridors of power. Sir Muir, who is principal of Glasgow University, was formerly head of the civil service in Scotland.
Fiona Hyslop, the Education Secretary, made it clear it was a "something-for-something" deal to make the universities more "effective and responsive". She added: "In future, I will expect the sector to demonstrate more explicitly how the funding it receives contributes towards our purpose of increasing sustained economic growth.
"In return, the sector will strengthen its case to continue to receive public resources at a level which will ensure it is nationally and internationally competitive."
The taskforce was set up amid bitter recriminations following the Government's spending review settlement. It gave them a pound;30 million increase rather than the pound;168 million they wanted. They claimed this risked putting them at a financial disadvantage compared with universities in England once they were able to tap into the additional income from increased tuition fees.
The report states that the teaching grant for universities will rise by 2.7 per cent in the next academic year, and for research by 4.7 per cent. The universities are continuing to press their case to bring funding up to the average for OECD countries over the next 10 years.
There is no agreement on what future funding levels would look like, but the Scottish Funding Council is being asked to draw up a new funding system for universities. A "flexible fund" for mainstream activities would sit alongside a "horizon fund" which would provide incentives to deliver the Government's priorities.
All universities would continue to undertake research, a rejection of the proposal for "teaching-only" universities in England.