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Official figures show £940m cuts will target teaching colleges All but five universities in England are to have their funding cut next year, according to official figures, which show that newer universities focused on teaching will be worst affected. A total of £940m is being cut from the budget for teaching, research and buildings for the next academic year, a 12.6% reduction. Universities that can offset teaching losses with their research income emerge most unscathed, as the teaching grant is reduced by 8.2%, compared with 2.8% shaved from the research budget. There will also be a 58.1% cut in cash terms in funding for buildings. Figures published on Thursday by the Higher Education Funding Council for England (Hefce) show that just five universities will see a rise in cash terms in their grant.With inflation of 2.4%, only one institution sees a real-terms rise in income: the London School of Hygiene and Tropical Medicine, where the teaching grant of £3.2m is dwarfed by £17.7m funding for research. Among the 20 least affected universities, seven are members of the research-intensive Russell group: Oxford, Cambridge, LSE, University College London, Imperial, Warwick and Manchester. None of the Russell group universities feature among the 20 worst affected. The 10 institutions where cuts are deepest include Bishop Grosseteste University College in Lincoln, which focuses on degrees relating to education. It will have a 13.4% cut in cash terms. City University, the next hardest hit, will have an 8.4% cut, while the University for the Creative Arts will have a 7.8% cut, and London Metropolitan University will see its budget reduced by 7.6%. The Hefce chief executive, Sir Alan Langlands, said: “Universities that don’t lose out so much are those that benefit from the very modest nature of the cut in research funding, as opposed to the more significant cut in teaching funding.” The universities with least change to their funding are those with high levels of world-leading research, Langlands said, and those with good incomes from business and charities, which often fund scientific research. Further education colleges that teach degree courses are also facing cuts, in some cases by as much as a fifth of their income for higher education. In coming years, universities will expect to get an increasing proportion of their funding from tuition fees. Durham is the latest to announce it will charge £9,000, the maximum allowed, from next year. Les Ebdon, chair of the university thinktank million+ and vice-chancellor of the University of Bedfordshire, criticised the combination of teaching cuts and a freezing of student numbers next year. “The net result is that the wealthiest universities with the most socially exclusive profiles will retain more public funding, while universities which create the most opportunities will receive less funding,” he said. “If there was ever a year when the government needed to be bold and invest in higher education to keep fees down in 2012, this was it. Instead, students and universities are being left to pick up the tab.” Universities have begun preparing for a more spartan public funding environment, cutting back on less successful courses, seeking redundancies and forging closer links with business. David Latchman, master of Birkbeck College, part of the University of London, said he expected to see further growth in the school of business and in courses related to improving job skills, such as arts management. Birkbeck’s strategy will include encouraging firms to subsidise their employees to study part-time and recruiting more foreign students. It will debate a three-tier system of variable fees. “Law can bear a higher fee than English,” Latchman said. Leicester University has shielded itself from the loss in government income through successful philanthropy; commercial activities, including hosting conferences; and raising fees for postgraduate students, as well as cutting costs. Its vice-chancellor, Bob Burgess, said: “A dynamic university will hold its nerve during this period, which is a period of transition. It’s very important to maintain and develop as well as thinking about how you manage cost-cutting exercises.” David Willetts, universities minister, said changes to funding meant more cash would follow student choices through the payment of tuition fees. “These changes will support a more diverse sector, where the choices of informed students provide a drive towards high quality teaching and efficient use of resources,” he said. Gareth Thomas, Labour’s higher education spokesman, said: “At a time when all our major rivals are investing heavily in universities to drive economic growth, cutting by so much the engine room of innovation in our economy seems even more illogical.” A total of £6.5bn is being distributed to universities for the next academic year. The budget cut includes £255m of short-term funding, which was given by the last government to help institutions prepare for spending cuts. If this short-term funding is excluded, the reduction compared with the budget for the current academic year is £685m, or 9.5%. Meanwhile, European students could be charged to come to Scottish universities under proposals to keep higher education free for all Scottish residents. The new measures, coupled with much higher charges for English students, are designed to fend off increasing demands for the Scottish government to drop its long-standing opposition to making Scottish students pay a graduate tax to help increase income for universities. University funding Higher education Tuition fees Students Spending review 2010 Tax and spending Jeevan Vasagar Severin Carrell guardian.co.uk