Moves towards planning and funding universities on a more regional basis are hindering their development in the market, suggests a report presented to university chiefs this week.
Mounting calls for a more regional dimension to higher education policy in England may be ill-conceived, according to the latest UK-wide annual analysis of trends in the sector.
Sir David Watson, vice-chancellor of Brighton University and chairman of Universities UK's longer-term strategy group, said: "We have a government whose rhetoric is about following the market, yet it has produced a series of proposals that are about bucking the market."
There is little correlation between English regions and the distribution of universities and colleges, concludes the report from education consultant and former Higher Education Statistics Agency chief executive Brian Ramsden, published by UUK.
The report says: "Overall, there appears to be little logical relationship between the regional boundaries and the locality of higher education institutions."
Sir David said Government policies designed to even out funding across the regions ignored the true distribution of institutions and ran counter to trends in the higher education market.
His analysis, presented to UUK's annual conference on Tuesday, reveals that an area in the Southeast that could be defined by drawing an arc from Bournemouth to Norwich amounts to one "super-region". This region accounts for 40 per cent of HE income in the UK and 47 per cent of research income.
It contains 34 per cent of home students and attracts 44 per cent of international students.
"That is the market telling us something about where people are drawn to, and no one seems to have thought through the implications of that," he said.
Professor Ramsden's report shows that, in 2001-02, 86 per cent of students in the UK were studying at institutions within their home or a neighbouring region.
The study reveals shifts in student course choices. From 1994-95 to 2001-02, there was a 92 per cent increase in the number of enrolments on part-time undergraduate courses, and a 43 per cent rise in the number of full-time postgraduate entrants, compared with 33 per cent growth in enrolments overall.
Sir David said: "The earning and learning culture is now bedding in for undergraduates, while general upskilling in the economy and society is leading students to conclude that a first degree is no longer enough to distinguish themselves in the jobs market, and more are progressing to a full-time masters programme."
The report adds to evidence of the increasing "financial precariousness" of institutions and of the growing selectivity of research funding.