Recruitment failures lose out on £35m

English universities and colleges that have failed to attract enough students will lose £35 million next year, funding chiefs announced today. While institutions will have a chance to reclaim some of the money in the next academic year, £17 million has gone for good.

The lost £17 million is more than Reading University's research block grant and would pay the salaries of up to 1,000 lecturers or provide a bursary of more than £1,000 for every student at the University of North London.

Cash will be withheld from 53 higher education institutions, three of which will each lose more than £1 million. The holdback recognises under-recruitment in existing provision and the inability to fill extra student places.

There is no obvious explanation of why some institutions have failed to attract students. World-class research institutions, civic universities, former polytechnics and specialist colleges are all affected.

Sir Brian Fender, chief executive of the Higher Education Funding Council for England, said: "Some institutions are having to work hard to fill their places, but overall demand is still rising."

Sir Brian added that variations in applications were unsurprising. "We have an increasingly well-informed student population and we would expect variations between institutions and subjects," he said.

While the number of people entering higher education has increased, targets are ambitious. In particular, people are not taking up all the part-time places on offer. Just 7,000 more students have enrolled on part-time courses this year, against a target of ,000.

Tony Bruce, director of policy at Universities UK, said: "It is clear there has been a considerable fluctuation in demand, both by institutions and by subjects. The overall picture is positive and demand is increasing, but it is at a slower rate than in previous years. The signs are that we are coming close to but slightly short of projected growth targets." Mr Bruce conceded that there was a shortfall in the head count for part-time students.

Liberal Democrat higher education spokesman Evan Harris said: "The priorities should be to properly fund and fill existing places, expand only in shortage areas and to increase access for poorer students."

Shadow education secretary Theresa May said: "Clawback on this scale puts universities in an increasingly difficult position. No matter how hard some universities are trying to expand, if students are not coming forward, then it is not going to work."

Union leaders had earlier complained that new universities were more likely to have funds withheld because students who had accepted places were subsequently being offered places at old institutions. However, new universities do not appear to be any worse off than any other part of the sector.

Imperial College, London, is hardest hit. Some £1.9 million will be withheld from its teaching grant for next year. The college had been given £1.5 million extra the previous year to expand its student numbers but had failed to fill the additional places. For next year, it has been allocated £200,000 for expansion.

Some £1.4 million will be withheld from the University of Teesside. But thanks to a two-year funding deal, this loss will be more than offset by an extra £2.1 million for teaching students it plans to recruit next year. Any cuts will not bite until the following year.

Harper Adams University College will also have more than £1 million withheld from its teaching grant but, because of extra money for additional places next year, its income will rise.

At the other end of the scale, 16 institutions will receive extra funding for expansion. They include Southampton, Brunel and Central Lancashire universities and the Arts Institute at Bournemouth.

There were narrow escapes for ten universities and higher education colleges that were due to have substantial funds withheld. To help maintain stability, the funding council moderates its allocations to ensure that no institution will receive an overall funding cut of more than 2 per cent in real terms.

Luton University and the University of Lincolnshire and Humberside were among those whose grants were topped up to ensure that cuts were limited to 2 per cent.

Tom Wilson, head of universities at lecturers' union Natfhe, said: "Natfhe is glad that the funding council has recognised the need to moderate clawback, which means many universities currently threatening redundancies should think again."

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