The funding of universities drops down the priority list when public finances are most tightly stretched.

In Scotland, the current financial crisis coincides with a long-running concern among university principals that they will lose out to English universities, which will gain extra revenue from an anticipated increase in fees. The abolition of student fees in Scotland, while popular, has increased the universities’ financial dependence on the Scottish Government.

The resulting potential for conflict been brought sharply into focus with the establishment of the £110m Horizon Fund to boost innovation, which some principals have criticised as a channelling of funding towards the government’s economic priorities at the expense of academic freedom. The point at issue, that it is not new money but a redistribution of funding, foreshadows the difficulty the Scottish Government will face in fulfilling its commitment to maintain cross-border funding levels in the absence of tuition fees.

Bernard King, the new convener of Universities Scotland and principal of Abertay University, is proposing a tax on all graduates to fund higher education.

This has a number of factors in its favour. Unlike tuition fees paid “upfront”, it should not deter people from poorer backgrounds from becoming students. Recent graduates who have been unable to find jobs commensurate with their qualifications as a result of the recession will dispute the assertion that a degree is the key to greater earning power and, therefore, should require some form of payback. Nevertheless, a tax levied as a proportion of income and only above a minimum threshold would not penalise those who have difficulty gaining a job or who take low-paid work.

The unprecedented rise in applications to Scottish universities is an indication of the continuing belief in the worth of a degree, especially in these recessionary times, but the benefits of higher education are life-enhancing far beyond the commanding of a higher salary.

Only well-funded institutions will attract the best academics and provide the facilities required to pass on that privilege, and a small increase in tax is a price all graduates should be prepared to pay. Mr King’s graduate tax would have to be applied across the UK and does not address how Scottish univer­sities would overcome the funding gap with England. Nevertheless, it should kick-start a re-examination of how we fund higher education in Scotland.