SPENDING on Scottish universities will be cut next year, but research funding and college budgets have been protected.

Under the plans, the university teaching budget will drop from £1.062 billion to £1.027 billion while college funding will stay at £530m.

Announcing the Scottish Budget, John Swinney, the Finance Minister, told the Scottish Parliament both sectors were vital to the future of the country's economy.

Pledging to continue to fund free tuition for Scottish university students, Mr Swinney said: "The Scottish Government has placed the principle of higher education based on the ability to learn not the ability to pay at the heart of what we believe.

"I can confirm today that we will continue to fund our commitment to free tuition. And we have backed up our commitment to keeping our universities world class by investing over £4 billion in the higher education sector over the last four years.

"Now we will review this commitment investing a further £1 billion in 2016/17 to support the continued success of our world class universities delivering high quality learning and research excellence.

"But we want to go further. We want to see a new relationship with higher education. A long-term partnership underpinned by ongoing significant investment to support the delivery of key shared priorities."

On research, Mr Swinney said: "This Budget settlement will enable the core research budget for higher education to be protected as a key investment for the future of Scotland."

While no detailed figures are available on research funding, the commitment is likely to apply to the Research Excellence Grant for innovation and the Postgraduate Research Grant.

Mr Swinney said further education budgets, which have seen significant cuts in recent years, would also be protected adding: "In this difficult financial context I have protected college funding delivering the budget stability the further education system needs.

"And we will deliver on our promise to expand the education maintenance allowance and modern apprenticeship programmes to help more young people fulfill their potential and enter positive and rewarding employment."

In school education, Mr Swinney said he would continue to invest the Scottish Government's flagship drive to close the attainment gap between rich and poor.

And he unveiled an £88m funding package to maintain teacher numbers and ensure there were sufficient training places for all probationer teachers requiring one. Free school meals for all children in the first three years of primary school will also continue.

However, because council budgets have been cut education services across Scotland will be under significant pressure.

Mr Swinney said: "We have a good education system, but we are committed to making it better. We must raise attainment for all and close the gap that has existed for decades between children in our most and least deprived areas.

"This Budget makes provision for that commitment with £33m investment in attainment programmes in 2016/17 which will support the four year £100m Scottish Attainment Challenge.

"We also intend to maintain teacher numbers this year and it reaffirms our commitment to improving the wider education system. We will continue to invest in high quality schools and community health facilities through our new Hub programme of revenue financed infrastructure investment."

The Budget was welcomed by Universities Scotland, which represents university principals, as a "good outcome" at a time of severe financial challenges.

Professor Sir Pete Downes, convener of Universities Scotland, said: "We welcome the commitments expressed by Scottish Government to continuing support for an excellent, internationally competitive and widely accessible university sector.

"We are strongly committed to delivering the best possible outcomes for Scotland with the resources proposed in this budget and to working constructively with the Scottish Government and Scottish Funding Council to maximise these outcomes.

"This will be a shared endeavour, matching universities’ commitment to excellence and the common good with government’s support to enable us to achieve that."

Professor Anton Muscatelli, principal of Glasgow University added: "Whilst recognising that any budget cut is a challenge we welcome the strong commitment that the Scottish Government has continued to show in higher education both as an end in itself and as a key driver of the Scottish economy."

However, Vonnie Sandlan, president of student body NUS Scotland, said the Budget had not addressed previous cuts to grants for the poorest students.

She said: "It’s clear that students are in desperate need of fairer funding, and this Budget could go further in addressing that, with no proposals to improve the student support system and cash cuts for universities.

"It’s really good to see a recognition of the importance of our colleges, and continued protection of their budget, but college students are still left with uncertainty of whether they’ll have enough money to live on."

Shona Struthers, chief executive of Colleges Scotland said: "We laid out a clear case for sustainable investment for the sector and it seems that the Scottish Government is recognising the benefits of investing in the impacts we deliver.

“We acknowledge the tight public financial constraints, however there are unavoidable costs facing the college sector which does point to some difficult decisions that need to be made by colleges."  

Mr Swinney also confirmed increased spending on free childcare for three and four-year-olds.

He told Holyrood: "One of our most significant investments in the future of Scotland's economy is the delivery of 600 hours of free high quality early learning and childcare for all three and four-year-olds and vulnerable two-year-olds, but we are going further.

"We are committed to the ambitious plan to almost double free nursery provision during the next parliament to 1140 hours."