Figures released by the Higher Education Funding Council for Wales on 31 March reveal that the Welsh university sector is facing a 5.1 per cent cut in funding in 2011-12.
The council has allocated a total of £377 million to universities and colleges, with £257 million for teaching and £76 million for research.
However, despite an overall cut in funding of more than 5 per cent, funding for Welsh Assembly priorities has increased, with cash for widening access almost trebling from £2 million to £5.6 million.
Funding for Welsh medium teaching has also more than doubled from £2 million to £4.4 million. This increase is against the grain of an overall cut to the teaching budget of 6.5 per cent, from £5 million in 2010-11 to £257 million in 2011-12.
Funding for research overall remained static, while quality-related (QR) funding slightly increased in cash terms from £70.9 million to £71.1 million, which is a real-terms cut.
The cuts to teaching funding mean that post-1992 institutions have been hit hardest. The University of Wales Trinity St David suffered an 8.8 per cent cut in recurrent funding, mainly as a result of a reduction in cash for teacher training.
Most institutions face a cut of between 3 and 8 per cent, with Cardiff University faring better than most with a reduction of 2.9 per cent next year.
David Blaney, director of strategic development at HEFCW, said universities were prepared for the reduction: "They knew there was going to be pressure on the funding. On the basis of what (the government) has told us, we are fairly comfortable that (universities) have been making sensible preparations for reductions of this level."
However, institutions already working towards Assembly priorities did well out of the settlement. The Open University in Wales bene-fited from the increase in funds for widening access and a premium for part-time students, securing an overall increase of 2 per cent.
And the Centre for Advanced Welsh and Celtic Studies, a small research institution that benefited from the focus on QR funding, pocketed an additional 16 per cent.
Philip Gummett, chief executive of HEFCW, said: "The public spending context makes this, unavoidably, a challenging settlement.
"We have worked to allocate funding fairly, but also robustly in terms of institutional performance against key objectives. We have focused on supporting the priorities that impact most upon social justice and the economy in Wales."