Last November, following the SNP government�s first budget, universities and ministers had a very public falling out over levels of funding for higher education.

Background:
Last November, following the SNP government's first budget, universities and ministers had a very public falling out over levels of funding for higher education.

University principals were upset that a demand for significant additional funding was, largely, ignored and said the settlement damaged the ability of universities to deliver government priorities to build future prosperity through innovation and skills.

As talk of a crisis in higher education grew, Fiona Hyslop, the Education Secretary, hit back, pointing out that the sector had received an increase and asking universities if, in a difficult financial climate for everyone, they expected to receive money destined for schools and hospitals.

As the row escalated - threatening to overshadow what had been an otherwise successful first budget for the fledgling administration - both sides realised such a public falling-out served no-one's best interests and a period of more considered private discussion followed, culminating in the setting up of the Future Thinking Taskforce.

In the months that followed, the taskforce, a discussion forum for principals, the government and the Scottish Funding Council, brought the sides closer together.

However, the indications are that, as Anton Muscatelli takes over as convener of Universities Scotland, the umbrella organisation for university principals, tensions over funding are set to move back up the political agenda.

In an interview with The Herald, Mr Muscatelli outlined two key strands of the organisation's policy which he said were vital to the future wellbeing of the sector. The first is to see an increase in participation by school-leavers in higher and further education in Scotland from its current levels to something approaching the international high point of up to 89%, established by some OECD countries.

The second is a corresponding increase in public funding to allow that expansion to happen and to enable universities to invest more in research.

The concept of universities asking for more money is not a new one, and there will be some within government who will see the request as a mechanism to shore up the sector at a time when participation rates are falling and budgets are getting ever tighter in the face of rising pay and pensions and spiralling fuel costs.

However, Universities Scotland argues the very basis for the demand is the Scottish Government's own expressed desire to create one of the world's most advanced knowledge-based economies. Mr Muscatelli argues that universities will be the main driver of that process, but in order to deliver, substantial further investment will have to be made.

Currently, Scotland lies 10th in a league table of participation in higher and further education amongst OECD countries with a participation rate of 59% - a figure which is greater than Scotland's official figures of 47% because it does not just include school-leavers.

New Zealand, Sweden, Iceland, Finland, Poland, Australia, Norway, Hungary and the USA all have higher participation rates than Scotland, and are therefore, according to Mr Muscatelli, better placed to provide the higher levels of skilled graduates required for future economic expansion.

A leading voice in Scottish education
Profile:

Professor Anton Muscatelli has quickly established himself as one of the leading lights in Scottish higher education since his appointment as principal of Heriot-Watt University in February 2007.

Before taking up the post, he was a highly regarded vice-principal at Glasgow University, where he helped oversee the budgetary implications of a strategic review of academic departments.

Previously, he was dean of the faculty of social sciences at Glasgow University, and also held the post of Professor of Economics between 1992 and 1994.

Born in Italy in 1962, his family moved to Holland and then to Scotland after his father, who was head of a shipping company, relocated to Glasgow.

He attended Glasgow High School and was a student at Glasgow University where he graduated with an MA in political economy in 1984 and with a PhD in economics in 1989.

In 2008, he was appointed chair of an independent expert group on the future financing of devolution for the Calman Commission.