Leader: You get what you pay for, Mr Brown

Off-the-cuff remarks at occasions such as Monday's launch of the Centre for European Reform's report on European universities do not constitute spending commitments. But Gordon Brown's acknowledgement that higher education deserves a more generous share of gross domestic product was nonetheless encouraging - especially in a week when every other sign has pointed towards tighter public spending. The Chancellor's remarks have been taken as a hint that the £3,000 ceiling on top-up fees will be lifted in 2010. And while the Treasury is reluctant to confirm this interpretation, it is hard to see what else it could mean. Government funding is not going to rise by the amounts needed to bring UK higher education's share of GDP from a measly 1.1 per cent closer to the US figure of 2.6 per cent. And for all the exhortations to private and corporate donors that will no doubt accompany the next spending review, the other main contributor will continue to be the graduate.

As the thoughtful report by Richard Lambert and Nick Butler makes clear, both public and private funding will have to grow if European universities are to be internationally competitive. The authors include the European Union among the potential sources of public support, calling for the use of structural funds and loans to help develop the infrastructure of universities that have suffered decades of neglect. However, although UK universities will feel that that description applies to them, the contrast with most Continental institutions is striking to anyone who visits them. It is fair to assume that, beyond the research programmes, EU funds would flow predominantly to other countries.

Universities in the UK have a head start on most of their Continental rivals, despite being funded less generously, and are well placed to lead the European challenge. But the comparisons that matter to Mr Brown are global, not local. His analysis of the sector's funding needs is reassuring; the task for higher education leaders will be to hold him to it. The Treasury's intervention in the debate over the future of the research assessment exercise suggests that higher education is being taken seriously - the cost of expansion, top-up fees notwithstanding, will no doubt ensure that it remains so. But the Chancellor cannot be reminded too regularly that the US universities he so admires derive their success from much greater government support (both state and federal) as well as private largesse.