Universities hit out as budgets face £200m squeeze

University and union leaders condemned the cuts, one saying it was "difficult to see how the Government had a political mandate for cuts of this magnitude".

Business Secretary Vince Cable has written to the Higher Education Funding Council for England (Hefce) setting out the savings the sector must make in 2010-11.

A letter from Hefce to universities confirms cuts of 200m for this year, including 82m from teaching grants. It also confirms that the university modernisation fund (UMF) – through which extra university places will be funded this year – has been cut by 118m.

The Government announced last month that only 10,000 extra places would be available for this autumn, half the number announced in the previous government's last Budget.

Hefce's letter yesterday confirmed that the teaching cost of these places would only be funded for 2010-11, after that universities must make efficiency savings to meet the cost.

The previous government had said that the UMF would be for one year only.

The University and College Union (UCU) said the removal of this funding after one year was the wrong move, coming on top of the funding cuts.

UCU general secretary Sally Hunt said: "Making further cuts to a sector that has already been devastated by cuts is the wrong move at the wrong time.

"The coalition does seem to be on message when it comes to attacking universities as we have seen the Liberal Democrats go from a party supposedly committed to fighting for students and universities to one that is now slashing funding for students and considering abstaining on any vote on tuition fees."

Mr Cable's grant letter says that universities and students will be expected to help the Department for Business, Innovation and Skills find additional savings of 100m in 2010-11.

The chairman of university think tank million+, Prof Les Ebdon, who is also vice-chancellor of Bedfordshire University said: "This creates further uncertainty just weeks before the start of the university academic and financial year. It is not the way to manage one of the most successful sectors of the UK economy which earns over 5bn in foreign exchange earnings each year."

The chief executive of million+, Pam Tatlow, said: "It is difficult to see how the coalition has a political mandate for cuts of this magnitude and evidence is not on their side. The US, France and Germany are all investing billions in higher education and research in spite of deficit reduction programmes."