Dismay for university chiefs as they face funding cuts of £449m

Academics warn the drop in funding will lead to a scramble for places on degree courses and could affect the quality of teaching across England.

Universities discovered yesterday that budgets are to be cut by 449m in 2010/11 as the Government attempts to slash public spending to tackle the national debt.

The drop in funding next year will mean more than 1bn is set to be cut from higher education as universities have been told budgets will need to drop by 600m from 2012.

The cuts confirmed yesterday include previous ministerial announcements which had called for savings of 180m and 135m to be made in higher education spending in 2010/11.

The latest announcement from the Higher Education Funding Council for England (HEFCE) includes a 1.6 per cent reduction, 215m, in teaching funding for universities; research budgets remaining the same as last year; a 16.9 per cent cut in capital funding and a seven per cent reduction for funding of special programmes and initiatives.

Bradford University's vice chancellor Professor Mark Cleary said: "We anticipated the reduction in funding and planned for a number of different scenarios. The cuts currently anticipated over the period 2010/11 to 2012/13 are nearer to the disappointing end of our scenario planning.

"The university will continue to seek and generate new income streams and to compensate it will undoubtedly have to exercise effective cost management." He said the university had no plans to cut staff at this stage.

Huddersfield University's deputy vice chancellor Prof Peter Slee said the cuts were taking place as universities faced an increase in the numbers of people applying.

"It is clear the Government has to cope with the public spending crisis. We have been planning for something like this for sometime and we recognise that universities have to bear their fair share of the brunt of public sector spending reductions.

"What we don't want is for the cuts to be so serious that they effect the recovery of the United Kingdom's economy or make our job more difficult than it needs to be. We think we can cope with the cuts identified although they are disappointing."

Prof Slee added that getting a place in higher education would be even tougher for students this year as universities balance falling budgets and increasing applications.

Prof Steve Smith, president of the vice chancellors' group Universities UK said: "These cuts we can take, it's what comes down the path we are worried about. It will not just damage the university sector, it will damage the country."

Wes Streeting, president of the National Union of Students said: "In spite of protestations to the contrary, the cuts being imposed by the Government are going to hit teaching, research and the number of places available at a time of record demand. Singling out universities for cuts of this kind seems to me to be an extraordinary act of self harm by the Government."

But universities Minister David Lammy accused the sector of scaremongering over funding cuts, saying he was confident HEFCE would make reductions that "minimises the impact on teaching and students".

Business Secretary Lord Mandelson added: "I have always said that the universities will need to do their fair share of belt-tightening but no more."