We recognise that reductions on this scale and suddenness are likely to cause difficulties for institutions," the chief executive of the ³ÉÈËVRÊÓƵ Funding Council for England has said.

The seriousness of the financial problems following the 1995 Budget cuts and the consequent funding allocations by the HEFC and the Teacher Training Agency is unquestionable. The gory detail was set out in last week's THES, but cuts in capital funding of 29 per cent and in revenue funding of 2-3 per cent in cash terms (5 per cent or more in real terms) will lead to painful and uncomfortable decisions. The welcome review of the nature, shape, size and funding of higher education in the next millennium to be conducted by Sir Ron Dearing must not be allowed to detract from the need to address the short-term funding problems: you can't revive a corpse!

For many universities with a substantial research and teaching base in medicine, science and technology, the abrupt and savage reduction in capital funding, and for capital read equipment, will hugely exacerbate their already seriously inadequate provision. How can a country that needs to develop and strengthen its knowledge-based industries deny to future employees the scientific equipment needed to maintain learning and research of international quality? We are already into a five or six-year cycle before equipment is replaced: these cuts will extend that to eight to nine years. The Private Finance Initiative, whatever relevance it has to buildings, has virtually no relevance whatsoever to equipment needs. The problem is compounded by the growing demand for computer equipment from most social science, arts and humanities departments.

While cuts in capital budgets are disastrous, the 3 per cent cut in revenue funding (12 per cent in the teaching training area) are no less serious. Student numbers have grown faster than funding in recent years. This has resulted in a reduction in funding per student of some 28 per cent in real terms over the past six years; next year's reductions will take that to 33 per cent with a further 5 per cent cut over the following two years.

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The rapid growth in the number of students was largely a response to the need to replace the cash losses of the Government's imposed efficiency gains. Now growth is totally constrained by the imposition of "Maximum Aggregate Student Numbers", so that the reductions in cash cannot be recovered.

The impact at institution level will be drastic and immediate: staff budgets will be cut, resulting in non-renewal of short-term contracts, more early retirements, and some compulsory redundancies. Staff pay rises will be heavily constrained, or yet more jobs will be lost. Overcrowded and under-resourced libraries and overloaded computer facilities will be even more pressurised, and this at a time when ever rising student/staff ratios (now around 20:1) necessitate much more student-centred learning. Backlog maintenance (estimated by universities at over Pounds 1 billion) will grow.

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New health and safety requirements (estimated to cost over Pounds 100 million next year) cannot be met. Building projects will be postponed or delayed: PFI or not, the interest and capital charges would still have to be met. Adaptation of laboratory and teaching space needed to teach larger student groups efficiently cannot be financed. Recommendations arising from the HEFCE teaching assessment exercise and requiring additional spending (such as laboratory equipment, language facilities) will be at risk. The squeeze on revenue budgets coupled with the greater uncertainty and volatility of the future will make private finance more difficulty to obtain, or obtainable only at a higher price.

I could continue. The point is that universities, having responded magnificently to the Government's request to move from an elite to a mass system, have little room to become more efficient. Of course we can "manage" with less money, but the price will be a fall in quality and standards, the very features which made British higher education the envy of the world.

The outcome of the next public expenditure round, the November 1996 budget, will be awaited with great interest and anxiety by the universities. If the capital cuts are not halted and addressed, if efficiency gains are not limited to say 1 per cent, then universities will have to give serious thought to the unthinkable: the imposition of supplementary fees on an already impoverished student body. Does someone out there care?

John Bull is vice chancellor, University of Plymouth.

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The alternative is a rapid decline in academic standards, reduction in research capacity, and the demolition of a once enviable system of higher education.