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This article charts the modernisation of higher education funding during the Thatcher years, and examines trends in funding since 1995–6. It demonstrates that support based on unit costs have been reduced in this period. The 1996 Research Assessment Exercise ( which allocates funding to universities by assessing research performance) resulted in an increasing concentration of funding in high rated departments, with the traditional universities attracting more of the research-based funding and less resources awarded to the central institutions.  The authors also examine the implications for higher education funding of the Government’s Comprehensive Spending Review (CSR). They show that, by maintaining the Conservatives’ spending plans, further real reductions have occurred in 1998-9. Thereafter, the figures show a modest growth in spending but less than implied in Government press statements about the impact of the CSR. The authors conclude that the continuing emphasis on ‘efficiency-based’ savings will lead to increased teaching loads and a further squeeze in the higher education sector.

University Funding in Scotland: Trends and Developments Since 1993