The council denies the accusation, saying that the pounds 3.5m it has set aside for expanding universities is compensation for institutions which had planned to expand rapidly and whose future might be threatened by government cuts in tuition fees.
The trouble stems from last September's decision by ministers to halt university expansion for three years and cut tuition fees for arts and social science students, including law, economics and some business studies courses. Peter Knight, vice-chancellor of the University of Central England in Birmingham, which is not one of those receiving compensation, described the decision to pay out the pounds 3.5m as 'academic set-aside'.
'It looks as if the funding council is intending to bribe institutions to have empty places. They will get money providing they don't recruit the students they were planning to recruit. This is not a rational policy when there are well-qualified students seeking places.'
Tuition fees for arts students have been reduced for 1993-94 from pounds 1,855 a year to pounds 1,300. Those for science and engineering students have been frozen at pounds 2,770. The universities which have been offered compensation - all former colleges of higher education or polytechnics - expect to receive money for several hundred students each. One said the sum was the equivalent of pounds 1,000 per student.
Most universities are expected to refuse places to arts and social science students whom they would have taken in previous years because they fail to meet the exact terms of the offers made to them.
They say they will have to reject students who do not achieve the precise terms of their offers, even if they achieve high grades. Legal opinion given to some new universities recently suggests that institutions will have to accept all students who achieve the required grade in each subject though the principle has never been tested in court.
But an applicant for an English course who is asked for an A in English and an A and a B in two other subjects, but who gets a B in English plus two As, can legally be rejected. Students who do better than expected in arts subjects will also have difficulty finding a place. Dr Knight said that some students who failed to meet the precise terms of their offer had been rejected in the past.
The funding council said some universities would have to recruit fewer arts students than planned, but that was not the same as leaving places empty. 'Universities are looking at this in terms of student numbers. We see it as compensation for loss of fee income which they would have expected to receive. It is not linked to the loss of individual students. We don't regard it as a significant issue. We feel obliged to assist them in adjusting to the new fee levels.'