In a move welcomed by the University and College Union, John Swinney, the Scottish National Party finance secretary, announce a cash increase of around £75 million for universities in 2012-13, reversing an 8 per cent cut last year.

Mr Swinney also told the Scottish Parliament today that universities could expect increases of £39 million in 2013-14 and £20 million in 2014-15.

This will see the Scottish Funding Council’s higher education budget rise from £926.2 million in 2011-12 to 1,002.2 million in 2012-13, 1,041.5 million in 2013-14, and 1,061.7 million in 2014-15.

This is despite the money received from Westminster shrinking by £3.3 billion - or 11 per cent - in the next three years, Mr Swinney said.

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However, the SFC’s further education budget will fall significantly over the three year period, from £544.7 million in 2011-12 to £506.9 million in 2012-13, £494.7 million in 2013-14 and £470.7 million in 2014-15.

The additional funding for higher education was welcomed by Gordon Watson, president of UCU Scotland, who said last year’s cuts had led to job losses and “threatened Scotland’s ability to compete in the international higher education marketplace”.

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“Given this good news we call on universities to halt redundancy plans across the sector,” he said.

Mary Senior, UCU Scottish official, added: “Considering the pressure on public finances this is a good settlement for universities which will allow staff to concentrate on teaching and innovation, which can only benefit Scotland’s society and economy.”

However, the National Union of Students Scotland said it was “very worried” about the cuts to further education.

“Colleges serve some of the most deprived communities in Scotland, offering an educational lifeline and local access to education to some of the most excluded in our society,” said Robin Parker, president of NUS Scotland.

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“The Scottish government is proposing huge cuts to colleges. They must make sure that no matter what, the number of places at college is at least protected and that quality is maintained.”

Mr Swinney said that the spending review settlement “guarantees that the university sector in Scotland will remain internationally competitive and closes the funding gap with England in full.

"In addition to keeping our manifesto commitments on free access to higher education, we will also introduce a minimum income for the lowest income students, as we promised during the election campaign, of at least £7,000.”

john.gill@tsleducation.com