Vice-chancellors have warned that universities are suffering from funding "initiative fatigue".
They have told funding chiefs their institutions have been set too many short-term "challenges" involving significant costs.
The Committee of Vice-Chancellors and Principals has said that while it supports the aims of the latest initiative - the Higher Education Funding Council's proposed new cash stream to help universities work closer with business and the community - initial funding is "modest indeed".
In its response to the proposals, the CVCP says that for the Higher Education Reach-out to Business and Community (Heroic) fund to succeed "universities will need to be confident about the sustainability of their initiatives after an initial period of funding".
Hefce plans to earmark Pounds 15 million as its initial contribution. The CVCP says: "The reach-out fund will not become an effective balance to teaching and research until the scale of its funding is significantly increased. We assume that additional funding for the reach-out fund will be sought by Hefce as part of the next comprehensive spending review, a proposition we would expect to support."
The response also stresses the need to keep the application process as simple as possible "to save universities costs and further suffering from initiative fatigue". And it warns that vice-chancellors "would be most concerned if any future development of the reach-out fund were at the expense of funding for teaching or research, neither of which, it is clear, could be allowed to fall below current levels without grave damage to universities".