MINISTERS must keep higher education cuts down to 1 per cent in future years, say funding chiefs.
Anything more would have "unacceptable implications for quality and standards".
Responding to Dearing, the Higher Education Funding Council for England says the first priority for extra money should be to address immediate funding shortfalls. Dearing's suggestions for new initiatives will have to wait until resources allow.
In addition, research councils needed more state money, while there should be no further transfer of resources from the funding councils to the research councils.
While HEFCE welcomes a return to growth in higher education, it says this should not be at the price of funding. And it is unsure how far expansion should be concentrated at sub-degree level, as Dearing suggests. Demand for sub-degree study, including the impact of student contributions, needs to be tested.
What evidence does exist suggests that more diploma-level provision leads to demand for more degree-level courses.
"Additional numbers should be aimed more generally at increasing advanced skills in the workforce and widening access to higher education rather than being focused on sub-degree courses," the council says. It disagrees with Dearing on concentrating sub-degree growth in further education.
Extra provision should be "by the most appropriate providers". It has commissioned research into whether further or higher education institutions are cheaper.
But the council promises to explore ways of "dovetailing" policies to widen access to higher education with Further Education Funding Council policies, following Helena Kennedy's report on further education. This will include developing collaborative projects. The council says student demands have become more diverse, which is a trend likely to continue. And it states: "The English higher education system is among the most diverse in the world and we believe it should remain so."
Finally, it opposes suggestions that council grants should depend on institutions carrying out certain actions, such as five-yearly reviews of governing bodies.