Image caption Tuition fees will rise in 2012

Universities in England are facing cuts of 12% - before funding changes linked to student fees come in, according to figures from their funding body.

Teaching and research funding is falling on average by 4%, while capital spending is more than halved.

Universities which focus on research do best, while newer ones which do more teaching fare worse.

Universities Minister David Willetts has said universities could have 10% more in cash terms by 2014.

England's 130 universities are learning learning how much they are being allocated in direct government funding, which is given through the Higher Education Funding Council for England (Hefce).

Overall, the grant for teaching has been cut by more than 8% and that for research by nearly 3% compared with last year. Capital spending is down by 58%.

Taking into account some special funding programmes which are ending, and the end of the one-year University Modernisation Fund, this brings the total to a 12.6% cut.

Almost all universities will experience a cut. Just one, the London School of Hygiene and Tropical Medicine, will see a rise in its grant - 4.6% in cash terms, or 2.2% if an inflationary measure of 2.4% is taken into account.

'Challenging settlement'

On average, according to Hefce, universities will experience a cut in their "recurrent grant" (largely teaching and research) of about 4% (cash terms).

Hefce's chief executive Sir Alan Langlands said it was a "challenging settlement" for universities and that the grant had been distributed in a way designed to try to ensure a "smooth transition" to the new funding system being brought in in 2012.

That is when students in England, once they graduate, will have to pay tuition fees of between £6,000 and £9,000 a year.

Then, the government wants funds from the increased fees largely to replace direct government funding of courses.

It has pledged to protect research and science and maths-based subjects.

Exceptional universities that concentrate on teaching and widening participation have been told today that they are being left to scrap it out in an untried market place Sally Hunt , University and College Union

Sir Alan said: "Universities that don't lose out so much are those that benefit from the very modest nature of the cut in research funding, as opposed to the more significant cut in teaching funding."

He added that the university sector was on "fairly strong foundations", with good cash reserves and should be able to withstand the pressure. Universities had been preparing for the changes.

Amongst the biggest losers are Bishop Grossesteste University College, Lincoln, which will see its funding cut by 13.4% in cash terms, and 15.8% in real terms.

City University, London will see its funding reduced by 8.4% in cash terms (10.8% in real terms), while funding at the University for the Creative Arts is down 7.8% (10.2%).

Also seeing high real terms cuts are the Royal Academy of Music (7.9% in cash terms, 10.3% in real terms) and Sunderland University (6.4% in cash terms, 8.8% in real terms ).

Oxford's funding will be cut in real terms by 1%, while Cambridge University's will be cut by 3%.

Overall, only 30% of university income comes from Hefce, with universities raising other funds through research, student fees and their own business ventures.

Hefce also announced a further concentration of research funding on top-rated work.

'Uncertainty'

Professor Steve Smith, president of the vice-chancellors' umbrella group Universities UK, said: "The funding allocations announced today are the result of recent cuts of around £1 billion to universities' public funding, before the new tuition charges even begin to come into play.

"There remains a great a deal of uncertainty about funding over the coming years. The government must now provide more clarity on final plans for the 2012 system as soon as possible."

The University and College Union - which represents university lecturers - says the biggest losers are new city-based universities, with a strong focus on teaching and attracting students from groups which are under-represented in higher education.

UCU general secretary, Sally Hunt, said it could be the "beginning of the end" for some departments and subjects.

"Exceptional universities that concentrate on teaching and widening participation have been told today that they are being left to scrap it out in an untried market place," she said.

"There's a real worry that some universities will not continue to offer excellent courses for the fear that they will not generate enough profit.

"We risk seeing arts and humanities courses and departments shut down and institutions that focus on widening participation being damaged."

Universities Minister David Willettts said: "Next year will be a year of transition to a new funding regime where more teaching funding will follow the choices of students.

"We recognise the vital role that higher education plays, which is why revenue funding for teaching and research in higher education could rise by nearly 10% in cash terms by 2014-15.

"These changes will support a more diverse sector, where the choices of informed students provide a drive towards high quality teaching and efficient use of resources."

Vice-Chancellor of City University, London, Professor Paul Curran said: "We would not welcome a cut, but City has a very low dependency on Hefce. That [overall Hefce funding] accounts for not more than 20% of our income because a third of our students are post graduates."

Professor Elaine Thomas, Vice-Chancellor of the University for the Creative Arts, said she was disappointed. The institution, which has several bases in the south of England, was experiencing "unprecedented high levels of applications", she said.

"As a specialist creative arts university we have been hit disproportionately by the impact of the cuts to university teaching grants. Demand is strong nationally for graduates in creative subjects, " she said.

"Even during the recession, the creative industries have continued to grow."