One thing was already certain, even before Chancellor of the Exchequer Alistair Darling got up to speak yesterday: the chill wind of spending cuts had already begun to blow over this part of the world.

Oxford University’s money from the Higher Education Funding Council for England (HEFCE) Will be less in real terms this year than it was last and the same goes for Oxford Brookes.

Oxford University has seen its HEFCE teaching grant drop by 7.5 per cent for 2010/11. Its overall HEFCE funding increase of one per cent is less than inflation, and therefore a decrease in real terms, at £188.1m.

But authorities at Oxford University seem philosophical about it all — taking it on the chin, at least for the time being. Their statement read: “Our teaching grant has decreased, which was not unexpected given the loss of the old and historic buildings grant (which comes as part of our block teaching grant).”

But wait a moment. Does that mean that an old university like Oxford, as opposed to a new one like Brookes, is now somehow at a disadvantage when it comes to teaching, just because it is saddled with the upkeep of all those old and beautiful buildings?

A spokeman for Oxford University said: “Yes. We are now facing additional costs overall for protecting the nation’s heritage as well as paying for a successful but expensive education system.”

She added: “In 1998 Oxford and Cambridge both lost additional money for funding the unique tutorial system they operate. But to cushion that loss, as it were, the two universities received an old and historic buildings grant — which has now ceased.”

All the same, an undergraduate from a UK home at Oxford University still receives between £5,000 and £6,000 of HEFCE money, compared to only £3,910 in HEFCE funding per year per student at Brookes. But then the cherished teaching methods at Oxford University actually cost about £16,000 a year per undergraduate.

The HEFCE funding announcement comes in the wake of demands from Lord Patten, Oxford University’s chancellor, that universities should be free to charge what they want in fees to make up the shortfall.

His remarks have increased pressure on the Government to raise the current £3,225-a-year cap on university fees.

The statement from Oxford University continued: “Currently, public funding plus student fees only pay for around half the cost of teaching home undergraduates.

“The rest comes from the university’s other sources of income, such as funds from donations and commercialisation of research.

“This means that in order to preserve the excellence of Oxford’s undergraduate teaching, money is being diverted that we need to invest in other areas — including investment in the best facilities and in scholarships for postgraduates.

“Oxford’s world-class teaching, research and heritage assets are an advantage to students, to employers and to the economy.

“The university has so far been able to preserve excellence in all areas despite underfunding, but this cannot continue indefinitely.”

Is that last point ominous? Might it spell loss of jobs among the staff working for Oxford University? After all, staff cuts have been announced at other top universities, for example Bristol, and lecturers at Sussex took strike action to defend their jobs. The official press spokesman, who said that it was not university policy to be named, added: “For the time being there are no such plans.”

Over at Brookes, where HEFCE funding is up 0.6 per cent — well below inflation — at £42.6m, plans to rebuild the campus are scheduled to go ahead and it is the same story regarding staff cuts, with no redundancies planned. But Brookes is planning to turn eight academic schools into just four faculties in a bid to incease efficiency. It is also “studying with interest” Chancellor Alistair Darling’s announcement of a University Modernisation Fund to give a one-off funding boost of £270m in 2010/11 to create 20,000 more university places, starting this September.

John Raftery, one of its Pro Vice-Chancellors, said: “We recognise these are tough times for the economy and the public sector. The increase Brookes has experienced may not be a huge amount but we welcome the recognition of our continued excellence in teaching and learning, reinforced by successful research.

“We have become a success story for higher education — balancing a traditional focus with the need to provide highly skilled graduates prepared for the world of business and enterprise.”

With inflation at about two per cent, 99 universities, or 76 per cent of the total, are facing real-term cuts, sparking concerns that students could face larger class sizes and a further drop in places on offer.

Applications to UK universities are already up 100,000 this year despite there being 6,000 fewer places, and there are fears that tens of thousands of would-be students will miss out.

General secretary of the University and College Union (UCU) Sally Hunt said: “We believe the cuts could lead to thousands of jobs being lost and the staff who survive the cull left with more students to teach and less time to spend on them.”

But the Business Innovation and Skills Secretary Lord Mandelson said: “Public spending alone has increased by 25 per cent in real terms since 1997.

“Against that, we are asking the universities to make very modest savings in their operating budgets. This is manageable. This is absorbable.”

But back to Oxford University: Its statement said: “We are very pleased that the excellence of our research has been recognised with an increased research grant.”

Its spokesman added: “Humanities departments are suffering.”

She said: “To compete with Ivy League universities, we are being forced more and more to raise money ourselves. Only about 4.5 per cent of our revenue comes from endowment returns. More comes, for instance, from external research and from Oxford University Press.”

Lord Mandelson, in his interview with the Press Association, said: “What I think is happening is that some of the vice-chancellors are worried not so much about what we are asking them to do, but about what might come next if there is a change of Government — major cuts coming down the line at them should the Conservatives be elected.

“They are getting their retaliation in first.”

Some might worry about what is coming down the line regardless of who wins on May 6.

One way and another, from next year there will be less public money, in real terms, flowing into the Oxford economy from its traditional source: education.

Here’s hoping academics’ jobs will be safe during the coming decade. And that Oxford’s buildings will be well maintained.