Top-notch universities have lost out to more vulnerable institutions in a share-the-misery exercise applied to funding allocations for 1996/97, announced yesterday.

Institutions which might have suffered unmanageable cuts have been saved by a ration of cash that would otherwise have gone to better-off universities with a successful research track record. The amount of safety net money distributed has dropped and capital "windfalls" have been docked to keep some institutions from suffering up to 50 per cent cuts in capital grant.

The ÖйúAƬ Funding Council for England has tried to cushion the massive cuts brought in by the last Budget. But the result is still an average 5 per cent funding loss across the sector in real terms, with very few winners and some institutions taking a cut of up to 7 per cent.

A funding council spokesman said: "We have tried to save some institutions from unmanageable cuts but because this is a zero-sum game, we have had to set limits on gains as well as losses."

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Big research universities and medical colleges have taken some of the biggest reductions in grant, while many smaller colleges active in areas such as teacher training and art and design, appear as relative winners.

Because the council has nearly Pounds 70 million less than last year to distribute in formula, recurrent and capital funding gains are small and sparse. Some colleges that appear to have gained through restructuring of initial teacher training, which has led to Pounds 2 million flowing from the Teacher Training Agency to HEFCE, will have had a corresponding cut in their TTA grant.

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The biggest percentage reductions in grant has fallen to the University of London's School of Pharmacy, suffering a 4.7 per cent cash cut, and UMIST, with a 4.6 per cent reduction. Others faring badly include Cambridge University, Cranfield University, and many of the University of London's medical schools, all suffering 4.5 per cent cuts. Overall, the University of London's formula grant is down by 4 per cent. Oxford University, Aston University and Imperial College are also significant losers.

Top of the "winners" table are: Chichester Institute, up by 16.6 per cent (just over Pounds 600,000); Bishop Grosseteste College, with a 12.5 per cent increase (an extra Pounds 32,000); Westhill College, up 8.5 per cent (a Pounds 69,000 gain); and Westminster College, Oxford, with 6.8 per cent more (up Pounds 36,000).

HEFCE has set a 35 per cent limit on reductions in formula capital funding, but has had to balance this by imposing a minimum cut of 19.5 per cent. This means some institutions which might have expected windfalls will take cuts to save others which would have lost up to half their formula capital money.

Some institutions have also lost or gained from a programme of narrowing differences in the units of funding for subjects within the three research "families", medicine, science and technology and non-science. And new weightings applied to the head count of postgraduate students mean some of the bigger research institutions will lose some funding. The funding council has also injected an extra Pounds 2 million from its flexibility fund, saved by top-slicing budgets.

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Brian Fender, HEFCE chief executive, said: "Our policy has been to allocate grants equitably so that individual institutions will not be faced with unmanageable changes in their funding."