It is not surprising that UUK is ducking out of a fight with the government over funding. Vice-chancellors, like much of British academe, lack a crucial weapon in any contest: the willingness to embrace private funding as an alternative.
Private funding is equated with crass, commercially driven research. This would surprise liberal arts colleges in the US, which find that financial independence insulates them from commercial pressures.
This attitude has to change. It is the government, not business, that is forcing us to transform universities into finishing schools for future managers. It was the Treasury that came up with highly regressive funding arrangements. It is government policies that force universities into relationships with the private sector from a position of weakness, not of strength.
The government has no incentive to deal with universities properly as long as British academics remain opposed to privatisation as a matter of principle. Better state funding hinges on the ability to develop - and execute - private-sector alternatives.