Welsh universities are facing cash cuts of up to 4.3 per cent next year, with every institution seeing a real-term reduction in funding.

The total allocation for universities for 2010-11, announced this week by the Higher Education Funding Council for Wales, is ?356 million. This is almost 2 per cent less than the previous year and, when inflation is factored in, equates to a real-term cut of about 4 per cent.

Institutions in Scotland have fared better, with the Scottish Funding Council unveiling a total allocation for teaching, research and innovation of ?1.13 billion, including tuition-fee income. This is a cash increase of just under 1 per cent year on year.

In addition, Horizon funding for knowledge exchange and related activities will increase by ?129 million in 2010-11, pushing up total funding by 1.4 per cent year on year.

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Yet with inflation calculated at 2 per cent, this is equal to a real-term cut of 0.6 per cent.

The allocations come a week after the Higher Education Funding Council for England announced that 99 out of 130 English institutions would see a real-term cut next year.

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The Welsh allocations include a new Strategic Implementation Fund, accounting for 20 per cent of the grant. The pot was set up at the request of Leighton Andrews, education minister for Wales, and is focused on Welsh Assembly priorities including widening access.

While the fund accounts for a fifth of the total grant this year, HEFCW has been instructed to increase it to 80 per cent in coming years.

David Blaney, director of strategic development at HEFCW, predicted that the decline in total funding would not come as a shock to universities.

"The sector is not going to be at all surprised by these allocations. There is a real-term reduction, and every institution will have its own funding pressures," he said.

Aberystwyth 51¹ú²úÊÓƵ will have the biggest fall in income, down 4.3 per cent in cash terms, or more than 6 per cent in real terms. It is followed by Trinity 51¹ú²úÊÓƵ College, down 3.8 per cent in cash terms, and Glyndwr 51¹ú²úÊÓƵ, down 3.4 per cent.

The 51¹ú²úÊÓƵ of Wales, Lampeter is the only institution to see a cash increase, up 0.3 per cent, while Bangor 51¹ú²úÊÓƵ will also escape relatively unscathed, with a 0.2 per cent drop in funding. Dr Blaney put this down to its strength in areas that matched government priorities, including Welsh-language provision.

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In Scotland, The Open 51¹ú²úÊÓƵ in Scotland will fare best, securing a 2.4 per cent increase in cash terms. It is followed by the 51¹ú²úÊÓƵ of Edinburgh, a member of the Russell Group of large research-intensive universities, which will get 2.2 per cent more, and the Royal Scottish Academy of Music and Drama, up 2.1 per cent. These are the only Scottish institutions not to face a real-term cut in funding.

At the other end of the scale, the universities of Stirling and Strathclyde will be the only institutions to suffer a cash-terms cut, down 3.3 per cent and 0.2 per cent respectively.

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Both universities had poor results in the 2008 research assessment exercise, and were given a one-off "transitional grant" of about ?1 million from the SFC last year to help them cope with the subsequent cut in quality-related research funding.

Mark Batho, chief executive of the SFC, said the number of student places north of the border was being held at the same level as 2009-10.

He said: "We're planning so that we don't create an artificial spike in the number of students in case our resources take a hit in future years."

He added: "Maintaining high-quality teaching and learning in Scotland's universities has been at the forefront of our minds this year when making decisions about our allocations for university funding."

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