Lord Dearing's idea of a compact between universities and the government is under threat as the government has made it clear that cuts will continue until at least the next general election.
The Committee of Vice-Chancellors and Principals is worried that much of the extra Pounds 280 million for higher education in 1999-2000, announced last week as part of the government's comprehensive spending review, could be used to fund higher education courses in further education colleges.
The CVCP said that this could jeopardise the deal offered to government by the Dearing report, which was published a year ago. It says universities believed that in return for further efficiency gains government would boost cash for teaching and infrastructure.
CVCP policy director Tony Bruce said that the Pounds 280 million, which includes Pounds 50 million for research, would mean universities cutting costs by 1 per cent or Pounds 100 million in 1999-2000. This averages Pounds 700,000 for every English higher education institution. The government has confirmed that higher and further education face efficiency savings in 2000-01 and 2001-02.
Mr Bruce said: "Dearing saw the 1 per cent efficiency gain as part of a package that included one-off pots of money for infrastructure. The 1 per cent cut stabilises things where we are now. It does not provide the wherewithal to maximise the benefits from new teaching technologies."
Mr Bruce said that it was clear that a proportion of the estimated 35,000 extra higher education students will go into further education colleges in 1999-2000. If a large proportion opts for higher education courses in colleges it would not affect universities' unit of funding. It would, however, limit their financial flexibility.
Lord Dearing, speaking on the first anniversary of the report, was worried that cuts in 2000-01 and 2001-02 could mean parts of his report being shelved until the money was available. He was due to meet higher education minister Baroness Blackstone today to seek further details.
"My main concern is what happens in years two and three. If the 1 per cent efficiency gain holds in these years then I will be happy. But this will still be insufficient to implement all my recommendations," he said. "The government assures me that the Pounds 280 million is on top of this year's Pounds 165 million extra. This is a better deal ... but until I know the details I cannot say if it still falls somewhat short. I cannot say if they have upheld their side of the bargain until I see the minister."
* Opinion 13, 15
* Blunkett letter 15
* Interview 17
* Details 4-5