Universities and other higher education institutions are still struggling - and in 36 cases, failing - to make ends meet, according to figures from the Higher Education Funding Council for England.
In three years' time, more than 50 institutions expect to be in debt, a growth of more than one third between now and 2001. The numbers are based on the 1998 financial forecasts provided by institutions last July.
The figures also reveal that institutions do not have the cash to invest for the future. This year, they are expected to have an operating margin of 1.7 per cent, according to the funding council. It recommends that this figure be at least 3 per cent. A spokesperson said: "If the operating margin falls below this level, they have no provision for reinvestment."
However, the data hides wide variations between institutions. Fewer than ten institutions hold more than half of the sector's net cash balances.
The financial forecasts will be reassessed when the funding position for 1999-2000 is announced later this year.