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FINANCE. Not too many people could have spoken knowledgeably about the Private Finance Initiative this time last year. That is hardly surprising. It was only launched in higher education in March. The then English funding council chief, Graeme Davies, introduced a bewildered looking academic audience to DBFO - design, build, finance and operate.

Now, of course, everyone is talking PFI. The savage capital spending cuts announced in the November Budget mean the money for the all-important laboratory, teaching block or learning resources centre will have to come from elsewhere.

The Government's suggestion is the PFI. Experts, who had sold the PFI idea as the best way of taking care of universities' non-core business, are a little bemused. Universities, which have already attracted Pounds 1.6 billion from private investors, are rightly a little nervous. Getting money for a dazzling sports centre is one thing. But a concrete teaching block? That's quite another.

Some universities are looking to other financial horizons. Lancaster University became the first to sign a long-term multi-million pound bond scheme. Five other universities have been working with fiscal firm European Capital to arrange a Pounds 100 million bond scheme, backed by vice chancellors. Three Birmingham universities have drawn up joint plans for a quoted investment trust to raise Pounds 10 million. Nottingham Trent's law school started a campaign to raise Pounds 1 million on the equity capital markets.

For all the financial worries, 1995 saw a host of new university projects, as local bigwigs and business leaders realised that a modest-sized university can give a Pounds 50 million annual boost to the local economy. There was the Gloucester University project, backed by Sir Christopher Ball, the Lakeland University project, backed by Dale Campbell-Savours, and Suffolk University project, backed by a business consortium of British Telecom and agricultural experts.