Staff still unhappy about pay, students alarmed at the prospect of fees and vice chancellors squeezed in the middle. Funding pressure built up at v-cs gathered in London this week to discuss the budget.
Higher education employers are unlikely to improve pay offers despite union threats that failure to do so could lead to serious disruption of admissions and examinations processes.
Early indications from the Universities and Colleges Employers Association, which met yesterday, showed that improvements on the 1.5 per cent increase for academic and 2.5 per cent for manual staff were unlikely.
UCEA chief executive Steve Rouse said: "The financial position next year is not as bad as we thought it might be but, while the Government has withdrawn cuts, it has not added to income in any significant way. It is, therefore, very difficult to see how that creates an ability to give a pay increase, unless institutions are going to make cuts elsewhere."
Representatives of all eight unions involved in the pay dispute lobbied the UCEA meeting in London. The unions were hopeful that the apparent easing of the financial stranglehold might allow employers scope for improved offers.
The Association of University Teachers is already preparing for a second national ballot of members in January over admissions and exams boycotts. It said the ballot would go ahead if nothing came from yesterday's UCEA meeting.
Speaking before the meeting, AUT general secretary David Triesman said: "We want a fair settlement whether by negotiation or binding arbitration. If they have nothing to say after today they are responsible for the consequences."
Natfhe spokeswoman Brenda Kirsch said: "If the response is negative then the unions will be talking about escalating the action and a further strike date has not been ruled out."
Meanwhile, a number of assessment visits have had to be postponed because of an AUT boycott.