Greater concentration of research funding would damage the UK's economic health, according to a vice-chancellor who represents a group of new universities.

Speaking at the UK Council for Graduate Education summer conference in Oxford, Les Ebdon, chair of Million+ and vice-chancellor of the University of Bedfordshire, said that the post-1992 universities had many more knowledge-transfer programmes and did much more consultancy for UK businesses than research-intensive universities.

"That is not surprising," he told delegates at the event last week. "There is no point going out and getting industry money if you get lots of (quality-related research) funding."

Professor Ebdon also said that more than half of the UK's professional development courses were run by post-1992 universities, a contribution that he said was "vital to British industry".

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He noted that the proportion of UK gross domestic product spent on research and development was in decline and speculated that this may be because concentration of research funding sent a message that only a few universities were worth working with.

In fact, Professor Ebdon said, 37 per cent of postgraduate students are at post-1992 universities, compared with 29 per cent at Russell Group universities.

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He added that 30 per cent of international postgraduates - and nearly 37 per cent of international taught postgraduates - are at post-1992 universities.

"The UK earns ?5.6 billion from international students," he said. "That is very important to the balance of payments and there is no way a handful of universities could bring that in. Overconcentration of postgraduate and research funding would see a substantial dip."

Having a world-class university system was more important than having a handful of world-class universities, the vice-chancellor argued.

He hit out at the "extraordinary outpouring of grief" that followed the discovery of numerous "islands of excellence" at post-1992 institutions in the 2008 research assessment exercise, which resulted in Million+ universities' share of QR funding rising from 0.9 per cent to 3.1 per cent.

"The fact that we have more world-class researchers in this country than we thought is something to be celebrated," he said.

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Professor Ebdon also claimed that the RAE panel structure reflected "how the world was 20 years ago" and prevented funding flowing to new and evolving disciplines such as those relating to the creative industries.

He pointed to a law of diminishing returns in funding and warned that improving the performance of top institutions would require a "frightening" level of further investment.

"It would impoverish large parts of the research base and destroy the seedbed where young researchers can develop before going to those hothouses," he said.

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Nor do high levels of funding guarantee better performance, Professor Ebdon claimed.

He said that only half of the highest-rated departments in the 2001 RAE had remained in the top echelon in 2008, despite most receiving substantial top-up funding.

Dismissing arguments about the need for a critical mass in research, he said that when the size of his own research group had grown to more that 30 its efficiency had dropped.

"I couldn't come up with enough creative ideas or delineate enough projects that avoided the students stepping on each other's toes," he said.

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paul.jump@tsleducation.com.