Welsh universities and colleges have suffered an overall real-terms cut of 2 per cent in their funding allocations for 1996/97, and some have taken reductions of over 5 per cent.
Figures released this week by the Welsh funding councils show that institutions running a lot of teacher training and part-time courses have been hardest hit.
But the losses are not nearly as severe as those incurred by English institutions, with just one Welsh higher education college qualifying for safety-net funding by taking a cut in grant of 3 per cent compared with 1995/96.
The blow of last November's budget settlement has been softened by the Welsh Office, which has called for less radical cuts in capital funding for 1996/97 than have been applied in England. Capital funding has been reduced by 2.1 per cent, from Pounds 24.2 million to Pounds 23.7 million. Recurrent funding - a much bigger pot of money at over Pounds 219 million - has been increased by 1.37 per cent. Meanwhile, research allocations have been frozen. The overall effect is a 0.78 per cent increase, or a real terms cut of about 2 per cent.
Institutions have also been saved from the kind of "share the misery" exercise applied to capital funding in England because the Welsh funding council has merged its capital and recurrent funding formulae.
Some institutions have particularly benefitted from the move to a single funding formula, such as St David's University College Lampeter, which has a 5.87 per cent increase in grant. Others may have lost out because under the old formula, potential gains in capital for institutions like Lampeter were being capped to help limit losses for other colleges. This cap and safety net have now been removed.
The biggest losses have been incurred by institutions with a lot of primary initial teacher training provision, where target student numbers have been driven down by the Government. Higher education colleges that offer a lot of part-time courses have also had recruitment problems affecting funding.
Of the total grant made available, Pounds 41.3 million is being distributed for research, which has been given a high priority in Wales.
John Andrews, the Welsh Funding Council's chief executive, said: "The council has allocated significant sums of money over the last four years in order to secure an improvement in the quality of research. It is our expectation that this investment will bear fruit in the results of this year's Research Assessment Exercise."
The council is holding back just over Pounds 2 million to distribute to institutions early in 1997 on the basis of the outcomes of the RAE.