Universities 'side-lined' by creation of new super-ministry

The Prime Minister announced the creation of a new "super-ministry" - the Department for Business, Innovation and Skills - to battle the recession.

Lord Mandelson was named as head of the department following the merger of the Department for Business, Enterprise and Regulatory Reform with the Department for Universities, Innovation and Skills, which was only created two years ago.

But university leaders said it represented a snub for higher education. It follows the announcement of a cap on the number of undergraduates in coming years and warnings of funding shortages.

Sally Hunt, general secretary of the University and Colleges Union, which represents lecturers, said the merger "seems to signal that further and higher education are no longer considered important enough to have a department of their own".

"The fact they have been lumped in with business appears to be a clear signal of how the government views colleges and universities and their main roles in this country," she said. "Education has the power to change people's lives and if we are serious about the important role it can play in helping us out of recession then we need experts in education at the helm, not business interests."

One of Lord Mandelson's first responsibilities will be leading the Government's review of tuition fees later this year. Ministers are already under pressure to lift the existing £3,100-a-year fee cap, despite claims from students that it will leave graduates heavily in debt.

The Million+ group, which represents new universities, said vice-chancellors would be "understandably cautious".

Professor Les Ebdon, the group's chairman, said: "The new department faces immediate challenges, in particular the tens of thousands of potential students who will be turned away because there are no places for them at university this year. If the new department is serious about skills it will find the additional places and funding needed."

Martin Doel, chief executive of the Association of Colleges, said: "In the middle of a recession and with less than a year to run to an election it is unhelpful to introduce this degree of change in terms of ministerial responsibility. When changes like this are made departments are sometimes forced to concentrate on their reorganisation at the expense of a focus on delivery."