Fears for UK strength as its institutions slip down top 200

• Table: The world's top 200 universities

The position of UK universities in the 2008 Times Higher Education-QS World University Rankings has deteriorated as the US elite cement their place at the top of the table.

The best-rated institution in the UK is the University of Cambridge, which fell one place to third, while the University of Oxford, which last year shared second place with Cambridge and Yale University, slipped to fourth.

For the fifth consecutive year Harvard University has topped the table, while Yale has broken away from its Oxbridge rivals to claim second place uncontested.

Among other leading UK institutions, Imperial College London fell from fifth to sixth place, while University College London, the last UK institution to make the top ten, rose from ninth to seventh place.

Of the top 100 institutions, 17 are from the UK, two fewer than in 2007 after the University of Leeds fell from 80th to 104th and Cardiff University from 99th to 133rd.

The UK's position across the top 200 also weakened, with the total number of institutions making the cut down from 30 to 29.

Of these, 22 slipped down the rankings, six improved their position and one, the University of Edinburgh, retained the same spot.

The shifting picture has raised questions about the strength of the sector and its funding.

Spending on higher education in the UK, as a proportion of gross domestic product, is below the average for Organisation for Economic Co-operation and Development countries and less than half that of the US.

For Wendy Piatt, director general of the Russell Group of larger research-intensive universities, this raises serious concerns about the sector's ability to maintain its lead over rivals.

"The Times Higher Education league table reflects the growing strength of our major competitors - particularly the US institutions - who benefit from much higher levels of investment than UK universities," she said.

"In terms of GDP, the US invests more than twice as much as the UK in higher education, and its major research-intensive universities are among the largest beneficiaries. For example, the endowment fund of Harvard alone is greater than the total public funding for all universities in England in any given year."

Warning that competition was also fierce from China, India and Germany, France, the Middle East and Australia, she said that "without increased investment there is a real danger that the UK's success will not be sustained".

But Malcolm Grant, chairman of the Russell Group and provost of University College London, said that, despite the ranking fluctuations, there was evidence that the UK got "more bang for its buck" than the US did from its universities.

Chris Patten, Oxford's chancellor, reignited the funding debate last week, ahead of next year's review of student tuition fees, by describing the current £3,145 cap as "intolerably low". Professor Grant argued that raising it would not necessarily improve the UK's position in the world rankings.

He said: "Firstly, there's no prospect of another pound coming in from a lifted cap before 2013, by my calculations, and secondly, the differential for the big research universities is much less than it is for teaching universities."

He said the introduction of £3,000 fees in 2006 added "about 2 per cent" to UCL's total budget - "it is not the valley of sparkling pound notes that vice-chancellors might have expected".

"So if the cap were to be lifted to £5,000, that would be another 2 per cent - welcome, but not funding that would allow us to change our position considerably.

"Where American universities differentiate themselves is in philanthropic gifts, and we are starting to move into that area, although the state of world markets doesn't encourage one to think that is going to be a big opportunity for another two or three years."

Christopher Loss, assistant professor of public policy and higher education at Vanderbilt University, a private research-intensive university in Tennessee, put the strengthening of the US position down to the "market-driven competitiveness" of the sector.

But he added: "There is a downside. US higher education is very, very expensive relative to Europe and elsewhere and institutional wealth is fairly stratified. In both respects it will be interesting to track how the current financial situation, the credit crunch and slowing economy might change things."

With the US and UK dominating the top of the table, the best-rated university from another country is the Australian National University in 16th place.

Mainland Europe's best-rated institution is ETH Zurich, up 18 places to 24th place, and there are also several universities from outside the traditional higher education powerhouses in the top 200, including the University of Cape Town, South Africa, at 179th and the University of Sao Paulo, Brazil, at 196th.

john.gill@tsleducation.com

THE UK'S TOP TEN

3rd: University of Cambridge - Down one place, from second

4th: University of Oxford - Down two places, from second

6th: Imperial College London - Down one place, from fifth

7th: University College London - Up two places, from ninth

22nd: King's College London - Up two places, from 24th

23rd: University of Edinburgh - Stays at 23rd place

29th: University of Manchester - Up one place, from 30th

32nd: University of Bristol - Up five places, from 37th

66th: London School of Economics - Down seven places, from 59th

69th: University of Warwick - Down 12 places, from 57th.