Universities in Northern Ireland have been warned that funding from the Stormont executive could be cut by up to 15 per cent next year – triggering suggestions that thousands of student places may have to be axed.

Queen’s University Belfast and the University of Ulster have already been forced to make multi-million pound savings during this financial year and now face further reductions because the executive’s failure to strike a deal on implementing welfare reforms continues to cost it dearly.

Grants from Stormont make up about a third of each university’s income and a 15 per cent cut would reportedly cost Queen’s about £14 million next year. Ulster was said to be looking at a shortfall of £17 million over two years.

Alongside fears of job losses, sources have reportedly indicated – according to the - that Ulster is considering a contingency plan to cut its student intake by 3,000 places next year, from 13,500 to 10,500, in order to maintain standards.

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The university is yet to confirm its proposals.

“Ulster University is facing unprecedented cuts, the impact of which is currently being discussed,” a spokeswoman said. “A number of scenarios are being considered but no decisions have yet been made.”

Queen’s, which may also have to review the size of its intake, declined to comment.

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Funding has been slashed for all departments in Northern Ireland apart from health and education – which does not cover universities – because of the impasse over welfare.

The grant Northern Ireland receives from London has been reduced on the assumption that welfare reforms passed by Westminster last year have been implemented, and have achieved savings. But implementation in the province has been blocked by Sinn Fein and the SDLP.

Already this year Queen’s has been told to find £3.9 million of savings while Ulster needs to find £3.15 million, equivalent to 4 per cent of its budget.

A spokesman for the Department for Employment and Learning said: “The higher education institutions have been advised to undertake scenario planning in anticipation of reductions of up to 15 per cent in allocations from the department in 2015-16. 

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“This exercise is to assist the department in its forward financial planning for that year. Final decisions have not been taken on next year’s allocations.”

Mike Larkin, chairman of the Northern Ireland higher education committee of the University and College Union, said the cuts would come as a “massive blow to staff and students”.

“It is hard to imagine anything other than job losses at both institutions,” said Professor Larkin, chair of microbial biochemistry at Queen’s. “UCU will work hard to seek a solution that avoids compulsory redundancies and subject closures.”

Not making higher education a priority “sends out the wrong message to potential investors in the region”, Professor Larkin added.

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chris.havergal@tesglobal.com