The special measure, which is designed to help universities absorb any steep changes in funding, will mean that high- flying institutions, such as Oxford and University College London, will have almost pounds 1m each clawed back from their teaching and research funding.
A total of pounds 12m will be diverted to cushion other universities, including Exeter and Manchester, which are having to cope with funding cuts in 1997- 98 compared with 1996-97. Manchester has suffered because it achieved particularly well in previous years.
The Higher Education Funding Council for England revealed the so-called "moderation" policy yesterday in its announcement of the distribution of pounds 3.4bn in government funding for the next academic year among 209 higher education institutions and further education colleges.
HEFCE aims to protect universities from the effects of a change in the formula used to calculate their funding, which has resulted in more money being channelled towards those with top-class research, to the detriment of those with a below-average performance.
However, even after they have been capped, the high- flying universities are unlikely to be disappointed with their substantial grants.
Oxford, which topped the research league table, will get over pounds 83m, while UCL will receive only slightly less.
Overall, the lump sum which has been allocated by the Government for university funding has been frozen for the next academic year. The increase of 2.8 per cent in cash terms is roughly in line with inflation.
However, university teaching unions and the Committee of Vice-Chancellors and Principals warned that there was still not enough money to go round.
Professor Jack Simmons, the vice-chairman of the Association of University and College Lecturers, said the settlement in effect meant a continuation of last year's cuts, when funding was slashed by 2.3 per cent in cash terms.
He added: "We are disappointed but not surprised by this. This means that university funding will still be 2.5 per cent to 3 per cent down on what it was two years ago. Universities will continue to shed staff."
Professor Gareth Roberts, CVCP chairman, called the overall level of funding "grossly inadequate", although he praised HEFCE's decision to concentrate money "where excellence is highest".
The universities are also having to weather a two-year freeze in the level of tuition fees paid by the Government for each student via the local education authorities.
HEFCE's chief executive, Professor Brian Fender, denied that universities would suffer unduly under the latest funding round, claiming that the latest settlement by the Government, which was an improvement on the previous year, had allowed the funding council to maintain stability by phasing in change.
The distribution revealed a mixed picture, with no clearly distinguished categories of winners and losers.
Under a new initiative being introduced for 1997-98, former polytechnics whose research performance is just too low to attract funding will be encouraged to collaborate with other, more successful, universities to bid for a share of a pounds 16m funding pot.
Oxford University's vice-chancellor, Dr Peter North, said that although Oxford welcomed its substantial grant, the need for a cap on high-achieving universities indicated that the policy of rewarding excellence in research was not working fully.
He said: "It points to the need for better funding overall for higher education."
The universities were pinning their hopes on Sir Ron Dearing's inquiry into higher education, which is due to report in the summer, to win extra money for the sector, he added.
How the cake is cut
Cranfield University 10.3
York University 7.7
Oxford University 7.5
Imperial College London 7.4
London University 7.4
Bath University 7.0
of Economics 6.9
Sheffield University 6.7
Exeter University minus 0.6
Aston University minus 0.5
Queen Mary and
Westfield College minus 0.3
Coventry University minus 0.1
East Anglia minus 0.1
University of Kent minus 0.1
University minus 0.1
University of Hull 0
Liverpool University 0
City University increase 0.1 The table shows the 10 English universities with the highest percentage increase in net grant in 1997-98 compared with 1996-97 and the 10 with the greatest percentage fall or smallest increase. The list excludes colleges and institutes of higher education, and specialist schools and institutions.
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