Business secretary Peter Mandelson has denied that British universities are "under any kind of threat" following outspoken criticism from figures in higher education over government plans to cut more than £900 million in funding.
But both the University and College Union (UCU) and Russell Group of top universities – including LSE, King's and UCL – have attacked the reductions in public spending which they say are counter to German, French and American investment and could lead to a "meltdown" in the sector and a loss of international competitiveness.
There are fears that cuts over the next three years could eventually total as much as £2.5 billion. Even the confirmed figure is thought to put 30 UK universities at risk of closure, and up to 14,000 jobs at risk.
Michael Arthur and Wendy Piatt, from the Russell Group have asked the government to "seriously consider reversing cuts already proposed", saying that the impact on staff and students would be devastating.
They claimed that "one of the world's greatest education systems" would be brought "to its knees" by the cuts.
But, writing in The Guardian in response, Mandelson said that "the reality is different".
He described the "new constraints" as "very small in the context of overall university income" and said that a decade of investment by Labour had seen state funding increase 25% since 1997.
UCU General Secretary Sally Hunt described herself as "astonished" that Mandelson was "seeking to downplay" the impact of the cuts, declaring that the government was "in complete denial".
"Unless the government heeds these warnings it will be impossible for the UK to remain a major player in the global knowledge economy", she said.
In December the government announced it would be reducing the Higher Education Funding Council's (HEFCE) budget by 6.6%, and also confirmed the £600 million cuts outlined in the pre-budget report.
But Mandelson has argued that teaching and research need not be compromised and that "efficiency savings" can be made on buildings, and by increasing the number of students on part-time courses or 'fast-track' one- and two-year degrees.
He said that the government had "pushed universities to seek new forms of income" besides state funding, such as "commercial engagement with industry", donations and recruiting international students.
He also cited the decision to introduce tuition fees – one key issue currently being examined by Lord Browne's higher education funding review panel. In light of the heavily slashed public funding, many university vice-chancellors will see a rise in top-up fees as increasingly attractive.
Cuts and higher fees are also seen by many as endangering the government's widening participation agenda. Both Mandelson and higher education minister David Lammy have publicly re-stated their commitment to increasing opportunities for young people in recent weeks.
But at the same the government announced that universities who accepted more students than expected could be fined £3,700 per student.
Despite the relative protection afforded to research-intensive universities such as the Russell Group, compared to poorer institutions, both King's and UCL in London have already begun to implement cuts. UCL is looking to save £20 million from an overall operating budget of £350 million. Unions are fighting job cuts in the Information Services Division and Lifes Sciences faculty.
At King's College catering staff and members of Equality and Diversity have been affected. The 'No Cuts at King's' campaign group is opposing compulsory redundancies.
The UCU is calling for students to join staff to protest against the budget cuts on January 26th at parliament square.
On February 6th at UCL students have organised a National Convention Against Fees and Cuts, supported by SOAS and UCL SUs.
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