The reduction in funding for 2011-12 was announced in the Budget of 17 November by John Swinney, Cabinet secretary for finance and sustainable growth.

The Scottish Funding Council’s total budget is to fall from about £1.79 billion to about £1.57 billion. Within that, the block grant distributed to universities will fall from £989 million to £926 million.

However, Mr Swinney, the Scottish National Party MSP for North Tayside, said the cut would be made “without detriment for the number of university and college places”.

He added that the government remained committed to not introducing tuition fees.

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The Budget statement, published on the Scottish government’s website, says: “Since 2007, investment in lifelong learning has been a priority. However, the scale of the budget reductions required mean that we have had to take the difficult decision to reduce the overall resources for the further and higher education sectors in Scotland.

“In doing so, we have been clear that our objective, in the current economic climate, is to continue to protect student numbers and…our investment in research.

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“We have asked the further and higher education sectors to extract maximum value from the unprecedented levels of investment they have received over the past four years by managing these reductions through greater efficiency and collaborative working.

“They have responded to this challenge. We have agreed with the sectors that we will work in 2011-12 to preserve core college and university student places.

“In addition, and mirroring the position in England, the SFC’s research budget will also be protected in cash terms.”

Mr Swinney was attacked by opposition MSPs for opting for a single-year Budget. Universities are desperate for “clarity”, they claimed, and the short-term settlement would prevent them from “setting their own budgets and reassuring staff”.

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Responding to the Budget, Universities Scotland said the settlement was “going to be tough but we can live with it for one year. We have agreed to this for one year under extreme circumstances, but it's not something we can sustain beyond that one year."

However, Tony Axon, a researcher at the University and College Union in Scotland, said he feared job losses would follow.

“The cut to higher education is much more severe than the overall cut to the Scottish budget. We're calling on all institutions to take stock and use this as an excuse not to cut jobs but to find savings,” he said.

Meanwhile, higher education funding also took a hit in the Welsh Assembly's Budget, which was also unveiled on 17 November.

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The sector will see its budget cut by £51 million over the next three years so more money can be redirected to schools and skills.

john.gill@tsleducation.com

Read the Scottish Budget statement in full at:

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