Universities in Scotland, Wales and Northern Ireland risk having their autonomy reduced to that of further education colleges because the rejection of England's market approach has come at the cost of increasing government intervention, a report on the impact of devolution on higher education has said.

Universities and Constitutional Change in the UK, a report by the Higher Education Policy Institute published on 19 April, also highlights the impact that England's switch to a system supported primarily by tuition fees rather than direct public funding will have on the devolved nations. The Barnett formula - which assigns planned spending to Scotland, Wales and Northern Ireland on the basis of comparable departmental spending in England - is set to deliver cuts as a result, it warns.

On autonomy, the report says the "social democratic governments in the devolved countries have shown little appetite for the market-based reforms adopted in England and...seem to be moving in some respects in the direction of a more traditional European model of higher education". Universities' relationship to government in those nations "may soon be similar to that of the further education colleges or to the polytechnics in England and Wales before incorporation", it adds.

The Hepi report comes after the Welsh government's radical redistribution of student places led to a cut of more than 20 per cent from new entrant numbers at two universities.

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The report's author, Tony Bruce, former director of policy development at Universities UK, told Times Higher Education that England and the rest of the UK diverged most clearly around government proposals to merge universities.

In Wales, Leighton Andrews, the education minister, told universities in 2010 to "adapt or die". He has threatened to dissolve post-1992 institutions in order to push through mergers and reduce the number of institutions.

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"It's not really the sort of ministerial language you'd expect in higher education," Dr Bruce said of Mr Andrews' "adapt or die" speech.

In Scotland, the government is seeking new powers to allow it to implement mergers if the Scottish Funding Council recommends them.

By contrast, "the approach in England is that it has been a matter for the sector to look at," Dr Bruce said.

The high road or the low road?

The Scottish government's White Paper on post-16 education, released in September 2011, recommends placing a statutory duty on universities to take into account applicants' backgrounds and to produce widening access agreements that could be enforced by fines.

Dr Bruce said that the drift towards a level of autonomy similar to that of colleges was only a "direction of travel" as policies in Scotland and Wales had not yet been confirmed. But if the proposals in the Scottish White Paper were adopted, "then the Scottish would probably be a bit further down this road than anyone else", he said.

Ferdinand von Prondzynski, principal of Robert Gordon University, led a recent review of Scottish university governance whose report recommended that 40 per cent of governing boards should be women and that chairs be elected.

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He called Hepi's conclusion "absurd", because England had taken the lead in the UK in imposing widening access policies using the threat of financial penalties through the Office for Fair Access. But other observers have pointed out that Offa has authority only over applications and has no legal power over university admissions.

Alastair Sim, head of Universities Scotland, called the Hepi report's comments on autonomy "slightly odd" and said Scottish universities enjoyed a "responsible autonomy".

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Welsh get a taste of the margins

On 5 April, the Higher Education Funding Council for Wales confirmed that it would create a "margin" of 53 per cent of new undergraduate and postgraduate certificate of education places in 2013-14. Half will be reallocated according to government priorities such as raising institutions' research and total income, and the other half to universities charging tuition fees of less than ?7,500 a year.

The policy has forced five Welsh universities to reduce their fees and left Aberystwyth University facing a 20.6 per cent cut in new places.

A spokesman for the Welsh government said: "There has been no erosion of autonomy...Wales needs universities with the capacity and critical mass to operate dynamically, effectively and efficiently."

The Hepi report also notes that the "devolved administrations have made their decisions according to national priorities without reference to the Barnett calculations of the proportion of funding that is attributable to higher education expenditure in England".

Devolving higher education has "brought benefits to the devolved countries but there are also significant disadvantages," the report finds. Reforms in England have been made "without adequate consideration of their impact outside England and liaison with the devolved governments is erratic", it adds.

The different fee regimes have brought confusion for students and "significant equity issues to consider with English and Scottish students (for example) being admitted to the same course on radically different terms".

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david.matthews@tsleducation.com.