Universities in Scotland are worried about a funding gap

Holyrood's enterprise committee has concluded recruitment and retention problems will "worsen" unless there is a "significant" increase in funding.

Its report also criticises the UK Government for a "lack of communication" with Scottish ministers in developing the policy.

The findings are being sent to Scottish MPs before the vote on tuition fees.

Students at all universities are currently charged the same annual fee of �1,125, rising to �1,150 for 2004/05.

Under the new system proposed by the UK Government, universities in England would be able to charge up to a maximum of �3,000.

Our committee is united in its belief that the proposals in the white paper, if implemented in their current form, will have an adverse effect on Scottish higher education Alasdair Morgan Committee convener

The new charges have been dubbed "top-up" fees because they would give universities cash above the flat-rate fee.

Prime Minister Tony Blair wants to introduce the fees to fund an expansion of higher education in England.

In Scotland, the "top-up" fees policy has been ruled out by the Scottish Executive.

The Scottish Parliament committee carried out an inquiry into the impact of the changes north of the border.

Committee convener Alasdair Morgan said members were encouraged that the executive was reviewing the higher education sector.

Adverse effect

But he said: "Much of the detail of the proposed implementation of the white paper is unclear.

"This has made it very difficult for the committee to obtain accurate costings and predicted impacts.

"That said, our committee is united in its belief that the proposals in the white paper, if implemented in their current form, will have an adverse effect on Scottish higher education, particularly on its research sector.

Additional money alone will not help Scottish higher education institutions Jim Wallace

"Our institutions have an excellent reputation for the services they offer, and rightly so. Their contribution to the wider Scottish economy cannot be underestimated nor indeed undermined."

The report said the UK Government should take into account the potential consequences for Scotland of its proposals.

The committee warned that top-up fees would generate extra income for English institutions.

"If higher education in Scotland is to maintain its competitive advantage and avoid becoming competitively disadvantaged in the future, it will be essential to lever additional funds into the sector," said the report.

"While this can in part be achieved by various measures which can be taken by institutions themselves, detailed in their report, we believe that significant executive funding will also be necessary."

Real danger

Scottish National Party education spokeswoman Fiona Hyslop said the report was a "wake-up call" for the executive.

"Most striking of all is the contradiction between the executive's economic strategy of 'Smart, Successful Scotland' and the findings of this report.

"There is a real danger that their own policy will be undermined by their approach to higher education funding."

Deputy First Minister Jim Wallace said many of the report's findings and recommendations reflected the executive's priorities.

Additional funding

He said they would be taken into account during the third phase of the higher education review.

"It is impossible to be certain what the impact of top-up fees in England would be on Scotland given that the precise terms of the package to be presented to the Westminster Parliament is, as yet, unclear," he said.

"I have made it clear that I will argue the case for additional funding for HE during the spending review.