Image caption The Student Opportunity Allocation helps universities to support disadvantaged students

A university group is warning that a fund to help universities recruit and retain poorer students is the most likely target of higher education cuts.

The Million+ group, which represents new universities, says the Student Opportunity Allocation, with planned spending of £364m, is under threat.

Chief executive Pam Tatlow says the fund provides long-term economic benefits by cutting drop-out rates.

The BIS department said no decisions have been reached on savings.

"We are reviewing all BIS spend as part of our preparations for the spending review. Decisions have not yet been taken around further savings," said a spokeswoman for the Business, Innovation and Skills department.

Widening access

But Ms Tatlow, head of the Million+ group of universities, claims that the Student Opportunity Allocation is the most vulnerable to short-term cuts.

It would deliver savings more quickly than changes to loans or grants, which would need a longer time to be phased in.

The Student Opportunity Allocation provides funding for higher education institutions to help them support students from "disadvantaged backgrounds".

The funding is paid directly to universities rather than to students.

For the 2015-16 university year, £364.2m is due to be allocated, with some individual universities likely to receive up to £4m.

The biggest amount of this is targeted at trying to improve retention rates and help students at risk of dropping out. In the current year, this accounted for £279m of the allocation.

A further £68m was spent on trying to widen university access to disadvantaged groups.

And £20m was spent on support for students with disabilities.

Ms Tatlow says that cutting the drop-out rate is a valuable long-term investment, for individuals and for the economy.

She argues that removing the funding would be "punishing success" as it is awarded to universities which have recruited the most diverse and disadvantaged intakes.

There was a campaign last year to protect the funding, after warnings of proposed cuts.

Earlier this month, Chancellor George Osborne announced that the BIS department faced cuts of £450m as part of a drive to bring down public debt.

There were to be "savings in higher education and further education budgets", but areas such as science and apprenticeships were to be protected.

While the schools budget has been protected, there have been no such promises for the higher education budget.

There have been reports that as part of these savings, there will be reductions in the student loan and grants system.

A report from BBC Newsnight last week suggested that student maintenance grants could face cuts.

A spokeswoman for the BIS department said: "We are not going to get drawn into what might or might not be on the table."