The provost of University College London is to take an immediate pay cut of 10 per cent and extend a pay freeze for other senior managers for another year.

Malcolm Grant said the decision was taken in response to the ¡°acute financial pressures on Britain¡¯s world-class universities¡±, after the sector was informed of further cuts of ?200 million to the 2010-11 higher education budget earlier this week.

His announcement follows remarks by Vince Cable, the business secretary, who told the Daily Telegraph today that he was ¡°taken aback¡± when he found out that vice-chancellors¡¯ pay rose by more than 10 per cent in 2008-09.

Mr Cable said there was ¡°some gap between reality and expectations in some of those institutions¡±, adding that ¡°there has got to be some restraint¡±.

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Steve Smith, president of Universities UK, responded that university heads had shown restraint on pay since the financial crisis struck.

Announcing his decision to take a pay cut today, Professor Grant, who received salary and benefits of ?376,000 in 2008-09, said he had already taken a pay freeze since 2008, and had made significant annual donations to UCL, approaching 10 per cent of his salary.

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He said: ¡°The government has launched a programme of significant cuts in university budgets, and these risk endangering world-class institutions which contribute billions to the nation¡¯s economy. It is going to take a concerted effort to maintain their global competitiveness, including much tighter housekeeping measures.

¡°A significant proportion of our overall funding already comes from non-government sources. I am determined that UCL should continue to be one of the UK¡¯s leading universities through financially turbulent times, and maintain its commitment to outstanding education and research.¡±

Sir Stephen Wall, chair of UCL council, said: ¡°Professor Grant¡¯s salary has always reflected the council¡¯s wish to reward and retain his leadership and dedication. But this is the right thing to do in harsh economic times.¡±

Cuts to the higher education budget announced since last year now total ?1.1 billion.

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john.gill@tsleducation.com