Universities face £4.2bn cut, leak suggests

University bosses have been warned their budgets could be slashed by £4.2 billion in the Government's spending review, it was disclosed today.

In a leaked email to vice-chancellors, Steve Smith, president of the umbrella group Universities UK (UUK), said that figures of potential cuts have been getting "worse and worse."

Figures set out in Lord Browne's review of student funding, published on Tuesday, "confirm our worst fears", Professor Smith said.

His review suggests that the Higher Education Funding Council for England (HEFCE), which distributes public funding to universities, will have funding of £700 million for teaching - this would be a cut of £3.2 billion from the current sum of £3.9 billion.

Prof Smith's email said: "Browne's figures confirm our worst fears."

It added that cuts to research grants of £1 billion have been proposed, bringing the total cut to £4.2 billion.

Figures of this magnitude have already been mooted in UUK's submission to the spending review, which is due next week.

The submission noted that the Treasury has asked government departments to look at cuts of between 25% and 40% by 2015.

If this is the case, universities could see their overall income fall by between £4.1 billion and £6.6 billion in cash terms.

Prof Smith's email, first seen by BBC Online, says: "There remains a terrible danger of the valley of death becoming a reality for all institutions, and avoiding that is our core concern."

Sally Hunt, general secretary of the University and College Union (UCU), said: "It is hard to believe that any government could contemplate making £4.2bn cuts to higher education given that it generates massive economic growth. Cuts of this magnitude will leave many cities and towns without a local university and our students paying the highest public fees in the world."

The Browne review recommended lifting the cap on university tuition fees, which would see students pay back thousands more in loan repayments for their degrees.

The Government would underwrite fee loans up to £6,000, and institutions who decided to charge over this amount would be hit with a levy.

Speaking in the Commons earlier this week, Business Secretary Vince Cable, who has responsibility for higher education, announced the Government was considering doubling the current fee cap from £3,290 to £7,000.

Lord Browne's proposals to lift the cap entirely are also under consideration, he said.