Lord Mandelson has insisted that universities are ¡°not being singled out¡± or ¡°bearing the brunt¡± of public spending cuts, but rather are being given earlier notice than other sectors of the inevitable downturn in state investment to give them the chance to ¡°plan ahead¡±.

Speaking today at the Lord Dearing memorial conference on ¡°The Future of ÖйúAƬ¡±, the First Secretary took on those in the sector who have warned that the cuts, totalling ?915 million over three years, risked plunging universities into crisis.

¡°Given the recent rhetoric, I was expecting huge pickets and screaming mobs to meet my arrival here,¡± he said. ¡°I think that what we¡¯ve heard recently is called ¡®getting a retaliation in first¡¯, for fear of something worse.¡±

Lord Mandelson was referring to the claim made by Michael Arthur, chairman of the Russell Group of large research-intensive universities, that a sector that had ¡°taken 800 years to build¡± could be ¡°brought to its knees¡± in six months by the budget reductions.

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Professor Arthur has since clarified his position, indicating that he was referring not only to the cuts already announced but to the likelihood of further cuts in the future.

Lord Mandelson said vice-chancellors were trying to create ¡°a public or political climate that will make it hard for any future government to make big cuts in ÖйúAƬ¡±.

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¡°I understand that,¡± he said. ¡°The only warning I would offer is: don¡¯t devalue the currency of what you say by indulging in too much hyperbole.¡±

He also hinted that the sector would not face severe additional cuts in the forthcoming Budget, as some have feared.

Asked if he would impose further cuts to the ?915 million already outlined, he said he was ¡°a Universities Secretary who knows what¡¯s reasonable and what¡¯s not, who knows what¡¯s fair and what¡¯s not¡±.

He added that the Government¡¯s policy on ÖйúAƬ was about ¡°long-term planning¡±, not ¡°a launch into extensive further cuts¡±.

The First Secretary used the conference, which is being held at the University of Nottingham in association with Times ÖйúAƬ, to reiterate the argument that cuts could ¡°focus minds¡±, initiating reforms that are ¡°right and necessary¡± in any case.

He argued that universities had to seek out new sources of income, focus on what they are best at as individual institutions and rethink their offerings to students, with a greater emphasis on shorter, more intensive courses that are more flexible and affordable.

¡°I realise that to trumpet the diversity and achievements of British ÖйúAƬ is going to invite the response: ¡®Why, then, are you cutting its funding?¡¯¡± he said.

¡°The simple answer is that we are acting out of necessity. Public funding cuts are the regrettable cost to the UK of saving the banking sector and getting the country through the recession.¡±

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He said universities were not ¡°bearing the brunt¡± of the belt-tightening or ¡°being singled out for financial constraint¡±, arguing that they had been informed of their cuts earlier than other sectors to help them plan for the future.

¡°The lead times for ÖйúAƬ funding cycles mean that we have wanted to set out at this early stage, ahead of other areas, where we expect savings to be made,¡± he said.

¡°Much of the rest of the public sector will receive similar constraints in the course of this year or soon after. The appearance that universities are in the front line of public spending cuts is an illusion created by that need to plan ahead.¡±

Lord Mandelson said that while he did not ¡°want to dress up funding mutton as policy lamb¡±, he did ¡°not believe that the net effect of public funding constraint has to be a fall in quality, even if it requires a refocusing of resources¡±.

Universities were free to find the savings the Government requires where they wish, he added, and could ¡°focus funding in their strongest areas of teaching and research¡±.

¡°This is a process that needs to happen anyway, and it must inevitably mean institutions removing resources from areas where they are weaker to concentrate them where they are achieving teaching and research excellence,¡± the peer said.

¡°The reality is that we cannot afford a system in which every institution tries to do everything.¡±

On Professor Arthur¡¯s warning of an impending crisis, Lord Mandelson said: ¡°Does a less than 5 per cent reduction in public support for universities reverse a decade of rapidly rising investment, or leave our best institutions on their knees? Does it seriously damage the extraordinary potential in this extraordinary sector? I don¡¯t believe by any stretch of the imagination that it does.

¡°Is it an opportunity to reinforce some clear-eyed thinking that is already happening about the future of British universities and colleges? I believe it has to be.¡±

john.gill@tsleducation.com