No promises can be made about Treasury funding for higher education after 2007, Ruth Kelly warned last week, writes Paul Hill.
The Education Secretary's comments will fuel fears that the Government will attempt to claw back money once universities receive extra income from tuition fees.
Ms Kelly told last week's Universities UK conference that "predictability and stability in policy and funding" were essential if institutions were to "plan and innovate with some degree of certainty".
But she added: "We have said that the unit of funding for teaching will be maintained in real terms at least throughout the three-year period of the current spending review. That remains our position. You will understand that, despite my inside knowledge of the Treasury, I cannot make any promises beyond 2007-08."
In 2007, ten years after the current Labour Government first came to power, a comprehensive spending review on all aspects of government finance will be held.
It is also understood that a senior figure at the Department for Education and Skills has privately warned some vice-chancellors that the sector must come forward with positive funding proposals for 2007 - rather than being seen to "whinge".
A vice-chancellor from the 1994 Group of smaller research-intensive universities who heard Ms Kelly's speech - but asked not to be named - was surprised that the Education Secretary had decided to sound a note of caution. "I think what Ruth has done is given us all a helpful early indication that there is going to be a tough fight ahead about the unit of resource," he said. "It is not what she said, but the fact she decided to raise the subject at all that is surprising.
"Her speech seems to be a deliberate move to stress the political reality ahead and to encourage the sector to start thinking about its position now."
Under Treasury plans, higher education funding - including cash for the Higher Education Funding Council for England, student loans and grants - will rise from £7.6 billion in 2005-06 to £8.5 billion in 2006-07 and Pounds 9.1 billion in 2007-08.