Scotland's 21 higher education institutions are facing a cash cut of 0.2 per cent in their grant from the Scottish Higher Education Funding Council.

But funds for the next academic year have fallen by 6 per cent in real terms, and the funding council has protected teaching and research as much as possible through a further nudge towards the Private Finance Initiative, and a drastic reduction in short-term national initiatives.

SHEFC's funding from the Scottish Office came, this year, as a single sum, encompassing both recurrent and capital funding, and the council has cut estates funding by Pounds 3 million, phasing out grants for capital projects.

Its funding for initiatives across the sector, which have included new blood schemes, regional collaboration, and a Scottish information superhighway, has fallen from Pounds 23 million last year to Pounds 7 million.

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Sir John Shaw, SHEFC's chairman, said that in future there would be an annual cap on top-slicing of about 2 per cent, some Pounds 10 million, to support medium to long-term strategic initiatives.

The funding council has removed safety netting for the first time, although it says it is willing to help the worst affected institutions find ways of adjusting.

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The worst hit is St Andrew's College of Education, entirely dependent on fixed teacher-education intakes, whose grant has dropped by 4.6 per cent.

The two other free-standing education colleges, Moray House Institute of Education and Northern College, have respectively suffered cuts of 2.6 per cent and 2.3 per cent, while the Scottish College of Textiles sees its grant fall by 4.4 per cent because of under-enrolment.

The biggest winner, Stirling University, has not even achieved single figures, with an increase of 0.9 per cent.

The main grant for teaching will be Pounds 353 million, down Pounds 5 million on last year in cash terms. The funding council will not be funding any extra student places, but will redistribute around 250 places to science, engineering and technology, some of these clawed back because of under-enrolment, and some stemming from cuts to initial teacher-education courses.

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Research funding is being kept stable, in cash terms, at Pounds 102 million, a reduction of 2.75 per cent in real terms.

More than Pounds 96 million has been allocated on the basis of the research assessment exercise, but SHEFC has already signalled that it is unlikely to fund departments rated 2 in the forthcoming RAE.

The remaining Pounds 5 million is seedcorn-funding for research development.

(Scottish funding council recurrent grant for teaching, research, estates and equipment 1996-1997. Graph NOT available on database)

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