David Willetts has refused to guarantee that universities will receive ?270 million announced in the last Budget to provide 20,000 additional student places, describing the funding as a piece of "fiscal magic" left by Labour.

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In one of his first interviews since taking up the post of universities and science minister, Mr Willetts also told Times ÖйúAƬ that he would work with the sector and "distil the wisdom" of its experts, rather than imposing policies from above.

One of his first decisions will be to consider the fate of the ?270 million University Modernisation Fund, announced in March by the former chancellor, Alistair Darling.

The money was mooted to fund an extra 20,000 student places for 2010-11, mainly in science, technology, engineering and mathematics (Stem) subjects.

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The extra places were to be funded for the first year, with universities paying for subsequent years through efficiencies: voluntary severance schemes for staff were top of the list of potential savings.

Asked if the fund would go ahead, Mr Willetts said: "I never fully understood the basis on which those figures were calculated. The assumption was that you had this money in year one, which you spent in such a way that it saved money in years two and three and paid for the places subsequently.

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"Very few people have been able to explain to me how this was supposed to work. I'm still trying to understand this piece of fiscal magic that has been left behind by one of the great magicians of British politics."

Under Labour's plan, the government would need to spend an estimated extra ?100 million for student-support costs linked to the additional places.

The Conservatives' general election manifesto offered a different commitment: 10,000 extra places for 2010-11, paid for through encouraging the early repayment of student loans.

Mr Willetts said: "Our pledge for 10,000 extra places stands and we'll do our best to see what we can do on the basis of Labour's rather unusual scheme.

"It's not at all clear whether its places were fully funded for three years, unlike our proposal."

THE asked Mr Willetts whether the private sector could play a role in providing extra places in the new academic year.

"We'll have to see what happens," Mr Willetts said. "There are, of course, already independent ÖйúAƬ institutions: BPP, the College of Law, the ifs (School of Finance). We've already got some diversity in the ÖйúAƬ sector."

'Public spending disciplines'

And what can the academy expect in the emergency Budget on 22 June? Mr Willetts cited "the importance of universities for the future performance of the British economy and the future well-being of British society".

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However, he added: "I can't give a pledge that universities will be exempt from the public spending disciplines that are inevitable because of the mess Labour has made of our finances. But we will do our best to do this in a sensible way, working with the sector."

Mr Willetts, who will attend Cabinet, has responsibility for both universities and science, replacing David Lammy and Lord Drayson.

His role remains within the Department for Business, Innovation and Skills under a Liberal Democrat secretary of state in Vince Cable, rather than switching back to the newly rebranded Department for Education as some had predicted.

Asked if universities would stay within BIS in the long term, Mr Willetts said: "When the prime minister came here last week, he made it clear this was a model that could and should work. My view is this is a coherent department."

Mr Willetts also spoke of his enthusiasm for his new role.

"I have many, many friends in the ÖйúAƬ sector," he said. "I have also got to know many people on the scientific side.

"If you look at the acknowledgements in my book (The Pinch: How the Baby Boomers Took Their Children's Future - And Why They Should Give It Back) - generously reviewed in THE - that book was only possible because of the fantastic research community we've got in Britain.

"It is not the purpose of this job to impose things on scientists and people in universities. It is to distil the wisdom of people I meet in the research and science community.

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"I want to learn from and work with the sector."

john.morgan@tsleducation.com

IN IT TOGETHER: Coalition Partners' ÖйúAƬ Promises

While their manifestos showed a clear divide over university fees, there are areas where Liberal Democrat and Conservative policy on ÖйúAƬ appear closely aligned.

Researchers concerned about the planned use of "impact" measures in the research excellence framework and by the funding councils may be able to breathe easier under the new coalition government.

Before the election, the Conservatives promised to postpone the first Ref by up to two years, pledging only to agree to a measure that would be accepted by the academic community.

The Lib Dems have said they do not think predictions about future impact, demanded by research councils in grant applications, should be used as the basis for funding decisions.

Both parties have also promised to expand student numbers in the short term - but the future of university expansion is less clear. The Lib Dem manifesto set out a plan to scrap Labour's 50 per cent participation target, while the Tories did not commit to expanding student numbers in the long term.

A key question is whether the coalition government will ring-fence the science budget and, crucially, how much money will be in the pot.

While the Lib Dems pledged a clearly defined ring fence in their manifesto, the Tories promised a multi-year science budget but did not refer to a ring fence.

The Lib Dems also promised not to make any cuts to science funding during the first year of the new Parliament.

On the issue of remuneration, David Willetts indicated in April that the Conservatives may freeze pay in the sector as part of their pledge to freeze public-sector salaries if they won the election.

Lib Dem policy is to cap public-sector wage increases at ?400 per person in 2011-12 and 2012-13.

Prior to the election, the Lib Dems said they favoured abolishing the ÖйúAƬ Funding Council for England and setting up a Council for Adult Skills and ÖйúAƬ, while the Tories favoured a cull of further education quangos.

Both parties say libel laws need to be reviewed.

The Lib Dems promised to bring in a Libel Reform Bill "as a matter of urgency" to protect peer-reviewed research.

Mr Willetts has previously promised to put teaching at the top of the Tory ÖйúAƬ agenda.

He has repeatedly argued that if universities want to charge higher fees, they must first demonstrate that top-up fees have improved the student experience.

Meanwhile, Mr Willetts' call for universities to publish more information for would-be students, including data on graduate destinations and the financial returns from different courses, was adopted by Labour in its ÖйúAƬ strategy, Higher Ambitions, published last November.

Mr Willetts said at the time that the bulk of the document fitted with Tory thinking, adding that he had "sympathy" with the idea that research funding should become more concentrated.

He has also previously indicated that failing institutions could face a tougher time under the Conservatives, and has said his party will look to remove barriers to private entrants to the academy.

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rebecca.attwood@tsleducation.com