The ?300 million funding stream that supports the teaching of poorer students, seen as higher education¡¯s equivalent of the pupil premium, is likely to suffer cuts in the government¡¯s spending review.

But Universities UK has sought to defend the funding while offering the coalition the prospect of future savings from the student loan bill, including the possibility of creating privately funded ¡°off-quota¡± places.

Some in the sector believe that the 2015-16 spending review - to be announced on 26 June - boils down to a stark choice for the sector: cuts either to the currently ring-fenced ?4.6 billion science and research budget or to ¡°student opportunity¡± funding to widen access and improve retention.

The latter - which mainly benefits post-1992 universities with higher numbers of disadvantaged students - amounts to ?332 million in 2013-14, which, other than funding for students who started under the lower fees regime, is the biggest chunk of the teaching grant.

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Like all government departments, the Department for Business, Innovation and Skills was required by the Treasury to submit its opening bid in the spending review on 29 April. Reports suggest that the Treasury is seeking outline proposals for 10 per cent reductions to departmental spending limits, which would force a ?1.5 billion cut on BIS.

Within BIS, no guarantees are being offered that the student opportunity fund can be completely protected. But there are concerns within the department that if the funding is cut entirely, it would leave the Higher Education Funding Council for England without levers over many post-92s, which would have no other sources of direct public funding left.

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Sir Alan Langlands, Hefce¡¯s chief executive, highlighted the vulnerability of the student opportunity fund by issuing a direct warning to David Willetts, the universities and science minister, at Hefce¡¯s recent annual conference.

¡°If ministers want [social mobility], they are going to have to pay for it,¡± Sir Alan said. ¡°And cutting the Hefce funding for widening participation in the spending review for 15-16 is not the answer to making the progress [Mr Willetts] wants to make.¡±

However, there are fears that the sector¡¯s defence of its funding could weaken if post-92 and Russell Group institutions protect only the income streams from which they benefit most: student opportunity and research funding, respectively.

UUK covers both bases in its submission to the Treasury. It says that the government should ring-fence science and research investment while also supporting the sector¡¯s efforts to widen participation, improve retention and maximise the supply of highly skilled graduates.

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While stating that making graduates pay more towards their loans would not offer savings for the 2015-16 spending review, UUK adds that ¡°there is value in re-examining the cost and design of the student loan system in the long term¡±.

UUK also says it wants to consider the ¡°potential future blend between public and non-public sources of funding to support undergraduate education (including options for supporting ¡®off quota¡¯ provision)¡±.

john.morgan@tsleducation.com