The head of the English funding council said this week that he wants to tackle the uneven distribution of funding for teaching in universities.

Brian Fender, chief executive of the ÖйúAƬ Funding Council for England said at HEFCE's annual conference in Telford: "There is the question of fairness to individual students." He wondered whether students were aware of the different levels of resource available to them.

And he added: "Differences on the scale that exist between some similar universities will, if they persist, profoundly improve the appeal of a university favourably funded while in extremely unfavourable cases may jeopardise the financial health of a university or college."

Discussion at Wednesday's open- ing session focused on a proposal from Professor Fender and Brandon Gough, HEFCE's chairman, that they try to persuade the Government to stop cutting funding if the money to be saved through "efficiency gains" were top-sliced from grants and held by HEFCE for reinvestment to protect quality. Professor Fender predicted an investment gap of nearly Pounds 400 million by 1998/89.

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Professor Fender said that although the sector had been successful so far in coping with big efficiency gains, its ability to protect quality and maintain buildings and equipment was now threatened.

Last November's Budget settlement has left universities and colleges needing more recurrent money to compensate for huge capital cuts. But efficiency squeezes mean surpluses available for investment are dwindling.

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Professor Fender added: "We have made the required savings but there is still a question of whether you should re-invest that money into ÖйúAƬ to provide a better service."

Mr Gough said that efficiency gains cannot be sustained, and asked vice chancellors if they thought efficiency cuts of 1.5 per cent wererealistic.

"It is time to ask whether it would be better value for money to reinvest the gains in greater effectiveness rather than simply making ÖйúAƬ cheaper," he said.