The government is convinced that there is no funding crisis in higher education after examining the findings of the Taylor report on future funding options and considering the responses of vice-chancellors to the report.
The refusal of vice-chancellors to select and fight for one of the eight funding options presented in the report, including top-up fees, has led ministers to deduce that it is acceptable to continue with the status quo.
The THES has learned that ministers, already unimpressed by arguments in favour of top-up fees, ruled out that option when there was no consensus to back it, even among Russell Group vice-chancellors.
The decision by Universities UK two weeks ago not to select any of the Taylor options has led 10 Downing Street to conclude that extra funding already pledged in the last comprehensive spending review, along with the possibility of more in the next, is enough to meet the needs of the sector.
University chiefs responded angrily to news of the government's attitude. Some attacked UUK's handling of the Taylor report, while others condemned the government for ignoring the one consensus among vice-chancellors: that higher education was facing a £900 million a year funding gap.
David Greenaway, pro vice-chancellor of Nottingham University and co-author of a Russell Group-commissioned report that recommended the introduction of top-up fees, described the Taylor report as "both politically correct and politically naive".
He said: "The report was never going to give the government any problems. UUK's approach was to set out a range of options. It took the line of: 'For goodness sake let's not make any decisions, let's just ask for more money.' "The report set the funding gap at the minimum possible, presumably to increase the chance of getting more money without rocking the boat. The result was predictable. It would have been better if UUK had never published the report. It now has nowhere to go as a lobby."
Peter Knight, vice-chancellor of the University of Central England, said he saw "no realistic prospect of UUK agreeing on any strategy in terms of a way forward", partly because "at the end of the day, it is a political decision and always has been". The Taylor report, he said, showed that "we have not been able to agree on anything other than the need for more money for teaching".
But he said the biggest problem that the sector faced, which ministers were ignoring, was the level of "grinding poverty" among students. He was shocked to learn recently that ministers believed students could live on student loans and needed to work only to afford luxuries.
"If anyone asked me where the government should spend an extra £100 million, I would say put it into student support first," Mr Knight said.
Maxwell Irvine, vice-chancellor of Birmingham University, said vice-chancellors had been told at their meeting in Newcastle two weeks ago that the government "did not wish to see universities and higher education as a contentious issue before the general election".
But he added: "The government is ignoring the consensus among vice-chancellors that there is a funding gap in higher education. The Taylor report shows that the unit of resource has continued to fall throughout the life of this government. If that carries on, the quality of academic leadership in higher education will gradually decline because we will not be able to attract the top people."
David Packham, secretary and registrar of Aston University, which had to shelve plans for top-up fees last month when education secretary David Blunkett ruled them out for the next parliament, described the Taylor report as "a useful contribution to the debate", but added: "Publishing it just before a general election may not have been the best timing."
He said he was not convinced that the prospect of top-up fees had completely disappeared. "The Taylor report shows there is still a case for increased funding for higher education, from whatever source it comes," he said.
Sir Howard Newby, president of UUK and incoming head of the Higher Education Funding Council for England, said Mr Blunkett had told UUK: "The Taylor report is an important contribution to the debate on higher education that I called for at Greenwich."
Sir Howard added: "We are convinced the Taylor report makes a good case for more funds and it will be a powerful tool with which we can fight our future funding campaigns with the government.
"We believe that all options for future funding of higher education must remain on the table for future discussions. The review was never intended to simply address the so-called top-up fees solution and we make no apologies for that."