Scotland's 21 higher education institutions have had their funded student numbers boosted by more than 2 per cent, against an overall funding increase of only 1 per cent from the Scottish Higher Education Funding Council.
John Sizer, the funding council's chief executive, said that the settlement was a tough one given the Government's latest inflation assumption of 3.25 per cent for 1995/96.
A priority in the next year would be to develop sector-wide initiatives to cut costs further while maintaining teaching and research quality, he said.
The council will allocate some Pounds 500 million, with Pounds 358 million for teaching.
This allows for insitutions to bring in an extra 2,500 students, bringing the total number of funded student places to more than 100,000 for the first time.
Most of the extra places will be in the priority subject areas of engineering, science, computing and maths, but 1,100 will be in non-priority areas. Scotland's compliance with the Government's consolidation policy means that the council has never imposed maximum aggregate student numbers.
But it is now trying to ensure a balance between consolidation and maintaining wider access by publishing a summary of total student numbers for each higher education institution, stressing that these can be exceeded by up to 1 per cent.
There will be Pounds 102 million for research, with three-quarters of funds awarded through a formula taking into account numbers of active staff and quality and type of work.
After the next research assessment exercise the council will give priority to higher rated departments, which could mean no resources for departments rated 2. The three colleges of education, whose intakes are fixed by Government, share a Pounds 1.9 million safety net ensuring that they do not suffer a cut of more than 1 per cent.
But they will only get the funds when they produce a plan to eliminate their dependency on the grant. Safety netting is not guaranteed next year.
Queen Margaret College in Edinburgh, which failed to consolidate last session and therefore has no extra funded student numbers, has also been hit by the new research formula. The institution suffers a grant drop of 0.4 per cent.
The biggest winner is the Robert Gordon University which has a high percentage of priority area students. It gets a 4.7 per cent increase.
All institutions with more than 4 per cent gains have boosted student numbers in priority areas, with some also gaining from the research formula.