Leader: Fees-free Scots show up the rest

Ever since universities in England were promised top-up fees, those in other parts of the UK have been lobbying politicians for a settlement that will allow them to compete on a reasonably level playing field - preferably without a parallel fee regime. Last week, the Scottish Executive appeared to give institutions north of the border just that. Although the promised increase of £125 million by 2007-08 is less than the projected income from top-up fees, it is more certain and will not be eroded by bursaries and fee discounts. No wonder Universities Scotland gave the news an unusually unqualified welcome.

As in all such announcements, the increases are not quite as generous as they seem: substantial sums have been earmarked for overdue capital projects and there is already a gap to close from the previous spending settlements. Spending levels are notoriously difficult to compare, partly because of Scotland's traditionally higher participation rate, but the bald figures showed English universities' increase for the three years from 2003 to be three times that of their neighbours. Everything depends on the base year used for the comparison.

There is no doubt, however, that the budget was much better than many in Scotland had expected and that higher education took a welcome stride up the pecking order of public spending priorities. The fact that the Executive was able to improve the universities' prospects without recourse to fees will be seen as an embarrassing contrast for Labour in England. But that is devolution and, in large part, that is the impact of the Barnett formula, which governs the transfer of funds to Scotland. The more pertinent comparison is with Wales, where decisions still have to be made about the long-term funding of higher education. The Rees review - and subsequently the Welsh Assembly - may find it more difficult to find a way of securing the future of the Principality's universities without top-up fees.