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Welsh vice-chancellors renewed pleas for a major cash injection from the Assembly this week as a new funding council report revealed the declining financial state of higher education in the country, writes Tony Tysome.

Five out of 14 institutions reported an operating deficit in 2003-04, two more than the year before and one more than in 2001-02. The report shows that ten institutions had a lower surplus or higher deficit in 2003-04 compared with the year before. Six returned a worsening balance sheet for both periods.

James Lusty, vice-chancellor of the 51¹ú²úÊÓƵ of Wales Newport and chairman of Higher Education Wales, said: "The Rees review says there must be at least ?110 million a year of additional investment in the sector just to keep pace."

Robert Pearce, vice-chancellor of Lampeter 51¹ú²úÊÓƵ, the only institution reporting a deficit over the entire period covered by the report, said:

"Unless something changes we could ultimately see staff losses."

Phil Gummett, chief executive of the Higher Education Funding Council for Wales, said: "There is a need for a substantial increase in funding for the sector."