Universities are being alarmist, says Mandelson

Relations between the Government and university chiefs were in crisis last night as Lord Mandelson accused them of using "extreme rhetoric" to spread alarmist claims about spending cuts.

Higher education faces a cash squeeze next year, with universities being told to save £449m in 2011-12. The teaching budget is being reduced by 1.6 per cent, while spending on building is being slashed by 15 per cent.

University chiefs have protested that higher education faces meltdown because of the scale of the economies demanded by the Government as it attempts to reduce the nation's debts.

Lord Mandelson, who as Business Secretary is in charge of universities, retorted yesterday that the savings they were being asked to make were "modest". Despite expectations that university applications will hit a record high next year, he denied that student numbers would fall. Lord Mandelson claimed that the universities, as well as the teaching unions, were deliberately exaggerating the position to avoid the need for reform.