The government’s “very radical” policy to slash direct public funding for teaching in English higher education is seen by the rest of the world as “completely bonkers”, according to the head of England’s funding council.

Sir Alan Langlands, the outgoing chief executive of the ����Vlog Funding Council for England, made the comments at Hefce’s annual conference, held in London on 18 April, directly after a speech by David Willetts, the universities and science minister.

Sir Alan said that the policy changes - under which direct public funding for teaching is being replaced by higher tuition fees - would deliver a £3.4 billion, 64 per cent cut in Hefce teaching grant between 2011 and 2015.

“You shouldn’t underestimate just how radical this is. You go to any other part of the world, they think we’re completely bonkers,” he told the conference.

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Sir Alan, who will become vice-chancellor of the University of Leeds on 1 October, also issued a warning over the rising projected cost of the new student loans system, which is subsidised by the taxpayer.

“If perhaps the Treasury and BIS [the Department for Business, Innovation and Skills] have got their sums wrong on some of this - or some of their underlying assumptions wrong - if that set of issues comes alongside continued difficulties…on student recruitment…that is when the trouble starts,” Sir Alan said. “This is the area we have to be watching very closely.”

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Meanwhile, it is expected that private providers will be among those to benefit from government plans to reallocate student numbers away from English universities with unfilled places - proposals that emerged at the Hefce conference.

Mr Willetts said in his speech that from 2014-15, the year when private providers are brought under student number controls, “flexibility” in the allocation of places would be extended beyond allowing unlimited recruitment of students with top A-level grades. The threshold for this unlimited recruitment will remain at ABB in 2014-15.

The minister added of his newer scheme: “Where student demand is low and institutions significantly under-recruit, then unfilled places will be moved to those with stronger recruitment patterns.”

Mr Willetts also said that he wanted the “further liberalisation” of number controls “to benefit the full range of students and institutions”.

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William Hunt, co-founder and deputy chairman of GSM London, formerly the Greenwich School of Management, said: “If there are places that are not filled, those numbers would normally go to waste. This would be one way of supporting the alternative provider sector without a terrible loss to the publicly funded sector.”

Mr Willetts also said that he plans to write with the Department for Education to “pupils from poorer backgrounds who have done well at their GCSEs” via their headteachers to encourage them to think about applying to university.

But with Michael Gove, the education secretary, a keen backer of the Russell Group, Mr Willetts sought to head off any notion that the letter might solely advocate that the pupils apply to the most selective universities.

john.morgan@tsleducation.com