The government is expected to announce the first cuts to university budgets, withdrawing funding before the revenue from the increased tuition fees comes in.
Despite lobbying from Universities UK, which is calling for the cuts to be delayed until April 2012, the government will set out a timetable that will see universities bear some of the load in the interim.
The universities minister, David Willetts, is expected to announce that the cuts, which government sources acknowledge could be up to £400m – 6% of the universities budget – will begin next April, 12 months before the new fees regime begins.
By not synchronising the timing of the cuts and the introduction of fees, the government appears to be opening another front in its battle to reform higher education. Some universities have warned they might have to declare bankruptcy because of the cuts, as many would be unlikely to be able to charge the kind of fees that would recoup the money they will no longer receive from the government. There are also questions about the quality of the courses on offer as universities struggle to operate with less income.
The Tory-led government has risked a rift with the Liberal Democrats by slashing 40% from the universities budget and making an 80% cut to the teaching budget.
By raising fees at the same time as cutting budgets the government has been charged with making students foot some of the bill for the deficit reduction plan, and the argument has moved from being one purely about the principles of funding in higher education.
The government does not resile from the accusation that it seeks to withdraw state funding from the university sector. It believes higher education will flourish when a market is introduced that places greater emphasis on private involvement. It recognises that successful establishments that attract more students will help balance the books.
Willetts told the Sunday Times: "This will be challenging for universities.
"We expect them to make serious efficiency savings, but the £400m is proportionately far less than most areas of government are spending. The more competitive they can become, the better they will be able to attract students in the following year."
The opposition spokesman for higher education, Gareth Thomas, said: "Just when we thought things couldn't get worse for students, the government is cutting funding to universities.
"Inevitably it will have an impact on the quality of courses and on lecturers and it is further bad news for universities.
"On the basis of conversations I have had with vice-chancellors, it is difficult to see how they could not cut courses and staff. So I am afraid student choice will suffer and the quality of their experience at university could be badly affected."
