The teaching budget for universities will be cut by £65 million in the next academic year.
The announcement by the Higher Education Funding Council for England follows an order by John Denham, the Universities Secretary, that the sector deliver £180 million in savings in the next financial year, which runs from April 2010 to April 2011.
The demand was made in a letter to Hefce on 6 May, which left the funding council to decide how much of the savings should be delivered in the 2009-10 academic year.
At its board meeting on 7 May, Hefce decided on the £65 million cut.
In a statement, it said: “This represents less than 1.4 per cent of the total teaching budget of £4,782 million announced in March.”
Research allocations will not be cut in the next academic year, but £16 million of savings are likely to be sought from quality-related (QR) research funding in 2010-11.
The final allocations to institutions for 2009-10 will be agreed at Hefce’s board meeting in July.
The funding council added that of 10,000 additional student numbers allocated by Mr Denham for 2010-11, 4,000 have already been committed. Universities have been warned that over-recruitment beyond the allocations will lead to stiff financial penalties.
The Hefce board will review the priorities for allocating the remaining additional student numbers by the end of September 2009.
In his letter of 6 May, Mr Denham said the savings should be spread across teaching and research, but also asked for quality to be protected and for Hefce to “look critically” at funding for bodies not directly delivering either academic pursuit.
Responding to the letter, Rick Trainor, president of Universities UK, said: “Although the Secretary of State’s letter repeats the assurance in the Budget about safeguarding research council expenditure, we note that the more general block grant for research, as well as for teaching, will now be more vulnerable to cuts… We are concerned that there is no explicit commitment to the unit of funding for teaching in the future.
“Since the last Spending Review, this has been a consistent statement from the Department for Innovation, Universities and Skills, so its absence from the… letter is alarming.”
He added: “Whatever additional efficiencies universities can implement in the short time available, some institutions may have no choice but to make real cuts in teaching and research activity during the two years covered by [Mr Denham’s] letter.”