More universities have launched reviews of their development programmes after the government announced that it would cut capital funding to the sector by more than half this year

Business secretary Lord Mandelson wrote to the Higher Education Funding Council for England (HEFCE), the body which disburses public money to universities, on 22 December to say there would be a drop of £543m in capital funding for 2010/11.

The cuts mean universities will receive £404m, compared with £938m last year.

Universities including Imperial College, London and Bristol have already scaled back future programmes by as much as 40% in anticipation of the cuts.

This week, Nottingham university said it was planning to cut back, and Reading university, which has a £250m pipeline of projects, said it was in the process of “reviewing funding arrangements” for future work. Bournemouth university also said it was reviewing its strategy.

The HEFCE usually funds about one-third of universities’ £3bn a year construction spend, with the universities paying for the rest themselves.

Some universities are looking to combat the cuts by raising more private money. Cambridge university this week revealed plans for a bond issue, while University College London said it was working on a long-term plan.