The final five Spanish regions have taken over financial and political responsibility for universities from central government. Effective from the end of 1995, the move completed a process of decentralisation underway since 1985.

Under the scheme, Spain's 17 regional governments are handed a lump sum by central government to allocate as they see fit. This brand of pragmatic federalism stems from the need to satisfy the demands of the country's historic nationalities after the return to democracy in 1975. In the case of universities, the Law of University of Reform of 1983 provides a framework, with pay and conditions for the roughly 50 per cent of lecturers with permanent jobs being set nationally. Regional governments, however, hold the purse-strings and therefore wield a good deal of power.

Decentralisation has meant increased internal financial autonomy for universities. In the old days an individual institution's spending would be centrally planned down to the last detail. Not only were waste and corruption rife, but the constraints of bureaucracy meant creative accounting was often used. "A member of staff might say: 'I am a cupboard, as my money comes from such and such'," recalls Guillermo Lusa, lecturer in maths at the Polytechnic University of Catalonia, the UPC.

While today's system undeniably offers more flexibility, some voices, such as the Economic Circle Foundation, a Barcelona think tank, are calling for still greater accountability and transparency in universities' financial affairs.

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A second change has been the growing diversity between the regions, as higher education funding begins to reflect regional government priorities. Thus the Andalucia administration in the south has concentrated on defining criteria for allocating money for research. The Valencian government has published a financial plan for its three universities, setting out how funding will be allocated according to the numbers of staff and students. The government of the Canary Islands, meanwhile, has increased numbers of teaching staff and regularised the position of those on temporary contracts.

Political complexions are also beginning to show through. The Basque government, ruled by a conservative nationalist coalition, has introduced pay supplements for lecturers as part of a wider campaign to project itself as a more attractive employer than central government. The Catalan government, also ruled by right-wing nationalists, has been criticised for using funding to promote a smaller, more elitist model of university by the back door, at the expense of older, larger institutions. In 1995, Barcelona's newest university, the Pompeu y Fabre, received more than 2.5 times more funds per student than the neighbouring University of Barcelona.

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The amount of money Spanish universities receive has long been the subject of fierce debate. Most people agree that while conditions and standards have greatly improved, more cash is needed. Universities have expanded rapidly in recent years, with 1989's total of 502,453 students rising to 672,236 by 1995. Funding grew at a faster rate than student numbers until 1992, when the onset of recession and a burgeoning state deficit led central government to rein in spending sharply. Today, average spending per student at 226,844 pesetas (Pounds 1,200) is actually lower than 1992's total of 254,080 pesetas per head. A complete overhaul of curricula and the introduction of new degrees has been carried out since 1992, meaning increased workloads but no new resources.

In 1994, the Madrid government released a draft for reforming university financing, involving boosting higher education spending from its current level of 0.9 per cent of gross national product to 1.5 per cent, the European average, by the year 2003. Other ideas included raising tuition fees and student grants, encouraging universities to increase their private sector funding and allocating resources according to quality assessments and success in building links with industry, thus introducing an element of competition hitherto absent. With elections looming, these fairly modest proposals have been put on ice. But inside universities the debate rumbles on.

Josep Ferrer, union spokesman and head of maths at the UPC, says that little of the proposed increase would benefit universities, as most is earmarked for expanding Spain's embryonic vocational training. He is against universities competing for students and funding or increasing reliance on private sector money as he says this would exacerbate regional inequalities and favour science-based institutions over more generalist ones. "Getting funding through links with industry is much easier in a developed region than in an area where little or no industry exists," he says.

Andreu Morillas, director of both the ECF and the private Ramon Llull University's Foundation in Barcelona, believes universities should generate more cash as "the public purse cannot take all the strain". Finally, he thinks that while all universities will improve, some will stand out. For him, excellence will depend not just on good research ratings and attracting funding, but also on introducing efficient management structures. within universities.

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believes that tuition fees should be raised and students made aware that fees only pay for a small proportion of the total cost of their education, currently around 15 per cent.