Vice-chancellors have welcomed future "stability" in university funding after the Government this week said it would maintain student funding levels at least until 2010-11 and will boost the seven research councils' budget above inflation.
Funding for higher education and skills will rise by an average of 2 per cent a year to £16.4 billion in 2010-11, Alastair Darling, the Chancellor, confirmed in his announcement of the three-year Comprehensive Spending Review.
The Department for Innovation, Universities and Skills said that funded student numbers would rise to about 1.2 million by 2010-11, an increase of 50,000.
The Government also confirmed apparently inflation-busting increases for all seven research councils, from 30 per cent over the period (to £2 billion a year) for medical research to 12 per cent for the Arts and Humanities Research Council.
The total spend on the public science base will rise by an average of 2.5 per cent a year in real terms to £6.3 billion by 2010-13.
There will be a boost for knowledge transfer through the Higher Education Innovation Fund, which will receive £150 million a year by 2010-11.
But money for universities to maintain their research infrastructure is set to drop by 28.4 per cent, although the Government says that a new Capital Investment Fund will be created to replace the temporary Science Research Investment Fund, which tackled a historical backlog.
Baroness Diana Warwick, the Universities UK chief executive, said that vice-chancellors awaited more detail on the Government's plans, but that in general "we are encouraged to see that universities can count on some stability in funding".
She added: "In particular, we are pleased the Government has said it is committed to maintaining the unit of funding for teaching."
Sally Hunt, general secretary of the University and College Union, welcomed the commitment, but said that the UK should invest in education at the same levels as key competitor countries or risk being left behind.
Evan Harris, the Liberal Democrat Science Spokesman, said that the 2.5 per cent real terms increase would fall behind the rate of economic growth.