Universities could be fined a total of £10 million for enrolling too many undergraduates this September, funding chiefs announced today.

In a circular letter to vice-chancellors, Sir Alan Langlands, chief executive of the ����Vlog Funding Council for England, says: “We have tentatively assumed in our budgeting that we would recover up to £10 million from over-recruitment.”

He adds that discussions with individual institutions about the sums involved are continuing.

The Government warned universities last year not to recruit more students in the 2009-10 academic year than they had in 2008-09. Institutions were threatened with financial penalties if they ignored the cap.

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Lord Mandelson, the First Secretary, later told Hefce to fine universities £3,700 for every student recruited above the permitted level.

Sir Alan’s letter says limits on intakes for 2010-11 “will be clarified to universities shortly”.

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The letter also sets out where the cuts announced by Lord Mandelson in the December 2009 grant letter will fall.

The total Hefce grant for the financial year 2010-11 is £7,291 million – £518 million less than in 2009-10, although capital funding has been brought forward to offset the loss partially.

The main funding decisions made by the Hefce board at its meeting on 28 January, all of which relate to the 2010-11 academic year, were:

• £4,7 million recurrent funding for teaching, representing a 1.6 per cent real- terms decrease on 2009-10 figures

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• £1,603 million recurrent funding for research, equal to a £32 million or 2 per cent increase on the previous year

• £562 million in capital funding, which represents a 14.9 per cent reduction in cash terms on the 2009-10 allocation

• £294 million in special funding for national programmes and initiatives, a 7 per cent cut in cash terms on 2009-10

• £150 million for the ����Vlog Innovation Fund – an 11.9 per cent increase year on year.

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Sir Alan said: “This is a challenging financial settlement, but we are doing all we can to support excellence in teaching and research by keeping across-the-board reductions in core funding to universities and colleges to a minimum.”

melanie.newman@tsleducation.com