Students are spurning new universities, provoking a recruitment crisis at several institutions. Over the past seven years, some 22,000 new university places have gone unfilled, 8,000 in 2000-01 alone, while old universities have enrolled more students than their official quotas allow.
The trend endangers Labour's manifesto pledge that 50 per cent of young people should enter higher education by 2010. It also highlights the possibility of mergers in the sector.
The data are revealed in an unpublished report, Supply and Demand in Higher Education , compiled by the Higher Education Funding Council for England. It warns: "There is a danger that the more popular institutions will flourish at the expense of the less popular. There are signs that this might be happening already.
"Some institutions, particularly new universities and colleges, grew rapidly between 1989 and 1994, and have suffered declines over the past few years.
"Other institutions, mainly pre-1992 universities, have experienced a steady growth that has not been interrupted by the recent fall in demand.
"In general, the most vulnerable institutions are the most active in making provision for students from disadvantaged backgrounds, part-time and mature students. These tend to be the students least able or inclined to travel away from home for their higher education, and any weakening of these institutions would be damaging to the interests of such students and limit the ability of the system as a whole to respond to their needs."
Luton, Thames Valley, Lincolnshire and Humberside, Sunderland, Wolverhampton and Anglia Polytechnic universities all saw a gap of 4 per cent or more between recruitment and their maximum student numbers - the figures set by government to control spending - in the seven years to September 2000.
Last year, the University of Luton missed its quota by 22.6 per cent. South Bank University under-recruited by 11 per cent, Sunderland University by 10 per cent, Nottingham Trent University by 9 per cent and the University of East London by 8.2 per cent.
Sir David Watson, director of Brighton University and chairman of Universities UK's longer-term strategy group, said: "We have got institutions choosing students who, in the past, they might not have chosen, and there is a tail-off of recruitment against target. The paradox is that the institutions that attract students from lower socioeconomic groups are the ones that are suffering from the market effect.
"Issues of sector organisation are becoming more intense, especially in conurbations such as London, where the universities with the most progressive social missions are beginning to look like market failures."
Last month, London Guildhall University and the University of North London announced plans to merge, and the University of East London plans to create a "strategic alliance" with these two.
Sir David called on the government, in consultation with the sector, to promote alliances and mergers among higher education institutions through carrot-and-stick funding mechanisms, and to rethink the boundary between further and higher education.
Universities UK's longer-term strategy group will publish a report on the future shape of the sector in September.
Tom Wilson, head of the universities department at lecturers' union Natfhe, called on the government to increase the premium paid to institutions that enrol students from neighbourhoods that have low participation rates from 5 per cent to 20 per cent. Institutions could use the cash to create popular courses, he said.
Baroness Warwick, chief executive of UUK, pointed to the role of student finance. A review of student support is vital if the government is to achieve its 50 per cent participation target, she said.
- Oxford University has announced a £750,000 bursary scheme to ensure that bright students from poor families are not deterred from applying.
With initial support of £1 million from a private donor, the scheme will offer bursaries of at least £2,000 to undergraduates whose tuition fees are paid in full by their local authority. From September 2002, it is expected that about 400 students will be eligible.
Students will receive £1,000 in their first year and £500 for the following two. Students on longer courses may be eligible for another payment.
Vice-chancellor Colin Lucas said: "Oxford is a world-class centre of learning. To maintain this standard, it needs to attract the brightest students."
Cambridge University has been running a similar scheme since 1988, which offers about 500 bursaries of up to £1,000 for each year of an undergraduate course.