Short-term goals will damage our long-term health and strength

Whatever rhetoric it may use about higher education, the Department for Business, Innovation and Skills is determined to use universities as instruments to help mitigate the effects of the recession.

Taken in isolation, this is a laudable aim, but to achieve it the Government will inevitably move money around an ever-decreasing higher education pot. We already had a taste of this under the old Department for Innovation, Universities and Skills last year as it shifted £100 million from equivalent or lower-level qualification (ELQ) students to employer engagement.

The problem with such crude initiatives is that there are unintended consequences. For example, the ELQ decision has in effect halted the reskilling of many individuals seeking to change careers - so important in a recession - and has severely reduced The Open University's offering.

Universities do not need such brutal encouragement to work closely with business. For most, it is already written in their DNA to achieve higher levels of graduate employment, develop curriculums with professional recognition, obtain leverage in research and consultancy contracts, or quite simply attract students.

When the Higher Education Funding Council for England was set up in 1992, one of its first policy initiatives was to provide as far as possible an equivalent student experience in different universities through standard units of funding. Previously, the polytechnics had been used to bidding for additional student numbers by price, which created significant variances in average units of funding.

The kneejerk initiatives from the BIS, within days of its coming into being, to resolve unmet demand that emerged as a consequence of capped student numbers present again the prospect of the average unit resource being insidiously differentiated between universities - either by allowing some to recruit students on fees only or, more divisively, by encouraging students from disadvantaged backgrounds to "stay local" and not pay fees in return for forfeiting their student loans or support.

The problem is that there has been no well-researched, intellectual or pragmatic debate about these matters. In fact, there has been no unfettered, apolitical debate about higher education and the "idea of the university" since 1997 and the review of the sector conducted by the late Lord Dearing.

Universities are pivotal and complex elements of society. Political instrumentalism can only damage their long-term viability for perceived short-term gain.

There is a fear, now openly articulated by Hefce, that the scale of cuts in public funding will result in a number of higher education institutions disappearing through merger or bankruptcy. But my argument is not about the level of funding: it is about the way funding is manipulated to achieve short-term political objectives. This is more regressive and potentially damaging to the sustainability of higher education than absolute levels of funding. As vice-chancellors we have been seduced into trading our independence for short-term and divisive funding pots - even when they simply constitute a rebranding of the same resources.

Universities are creative, self-sustaining bodies that, if left to their own devices, will work their way through the recession and come out of it stronger. Those that fail as a consequence of irresponsible "sub-prime" investments should neither enjoy the independence they currently have nor hold the responsibility for the future of society in their hands.

The University of Lincoln has developed over the past ten years with maximum support but minimal exceptional funding from Hefce, local or central government. It is financially viable and has made dramatic progress in developing its academic credentials. Most importantly, it is now an intrinsic part of the economic and cultural life of the community it serves.

Lincoln is playing a vital role with local partners to work through the recession, not by thinking up short-term palliatives but by building on a subtly different model of engagement. For example, our Holbeach campus, based in the heart of Lincolnshire's food industry, is wholly responsive to its training and development needs. Its National Centre for Food Manufacturing is a test-bed factory that trains apprentices, is used for product testing, and carries out undergraduate and postgraduate programmes and research. That model is applied to other sectors, including through a new Siemens engineering school.

The most significant impediment to universities surviving the recession and making a major contribution to economic recovery is not the 10 per cent cut in public funds, but ever-more constrained funding streams and selective, kneejerk initiatives.