Annual savings of more than half a billion pounds could be made by squeezing space on university campuses, the ÖйúAƬ Funding Council for England (Hefce) has said.

In its annual report on the performance of university estates, Hefce says that savings of ?367 million a year could be achieved merely by rationalising staff office space, adding that there are "strong financial and environmental imperatives" to improve efficiency.

It also highlights widening inequality in the elbow room enjoyed by academics and students.

While the space per student has shrunk significantly over the past five years, the average office space allocated to academics has increased over the same period.

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Andrew Smith, head of estates at Hefce, called the disparity a surprise. "Behind the scenes, it may be the case that some constituencies have a stronger political voice than others, so there is an equity issue about whether office space for academics should be increasing as universities are reducing space per student," he said.

Hefce sees the reduction in space per student, which contracted by 12 per cent between 2001-02 and 2005-06, as a positive development. This "marked improvement" in productivity has been achieved as the rise in student numbers has outstripped the growth in university estates.

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Nonetheless, Hefce believes that more can be done, suggesting that more reductions, equal to 2.2 million square metres, could be achieved across the UK.

Mr Smith said: "Although there are, of course, limits to how far that can go, we think there is a lot more potential for space savings at most institutions, which can lead to both capital cost savings and revenue savings, as well as reduced carbon emissions."

Hefce's report also gives a snapshot of estate finances. It notes that over the past five years, institutions' income per square metre rose by almost a third.

This, again, is in part a reflection of the growth in student numbers, and it resulted in the average institution spending 0.7 per cent less of its total income on estates in 2005-06 than it did in 2001-02. This left universities with more money to spend in other areas.

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Despite a slight drop in the proportion of university estate that is in poor condition, there remains a "repair backlog" that is becoming "less affordable", particularly in Scotland and Wales, Hefce said.

Mr Smith said: "There's always an element of repair backlog ... but it is something that is (too often) cut in hard times. Not many people in a university, besides the estate manager, will fight for repairs."

john.gill@tsleducation.com.