Funding chiefs this week revealed which universities will host England's 22 knowledge exchange centres as part of a £186 million boost for higher education-business links.

The announcement of the knowledge exchange centres was included in the Higher Education Funding Council for England's allocation of its Higher Education Innovation Fund, which aims to improve business links. But there were complaints that competition for this funding had become a "beauty contest" that favoured large, and old, institutions.

Of the 22 new centres, five are led by old universities. The biggest single allocation, just over £10.5 million, went to a centre led by Brunel University in collaboration with Kingston, Thames Valley and Westminster universities along with Royal Holloway, University of London, St George's Hospital Medical School and the University of Surrey Roehampton.

There were 183 applications for HEIF money; 124 succeeded, 46 of them collaborative partnerships involving more than 100 institutions in England.

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Of the 35 institutional bids that were rejected, 20 were from higher education colleges, eight from new universities and seven from old universities. Bristol University secured the biggest single award, nearly £12.9 million, for a collaborative project involving Bath, Surrey and Southampton universities.

The Hefce announcement sparked claims that too much HEIF funding is going to old universities that already win the lion's share of the funding for pure research. Third-stream funding is designed to foster links between universities and local and regional businesses. Any university can bid for it, but it was created as a way of channelling more money to post-1992 universities that get little research cash.

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The knowledge exchange centres were announced in last year's higher education White Paper, in which it was clear that this source of funding was designed to support universities and departments that did not already benefit from significant research funding.

Roger Brown, principal of Southampton Institute, said the allocations displayed a "large degree of arbitrariness". "It makes a mockery of any attempts to create a more diverse sector," he said.

Calling for a big increase in funding for knowledge transfer activities, he said a formula system would work because institutional audits could ensure that the funds were spent effectively.

Dianne Willcocks, chair of the Standing Conference of Principals, said that 31 Scop members had bid for HEIF money but only 12 got funding. She said small institutions found it burdensome to prepare bids for modest sums.

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Philip Graham, executive director of the Association for University Research and Industry Links, said competitive bids should be abandoned in favour of a formula-based system.

Alan Roff, deputy vice-chancellor of the University of Central Lancashire, said his institution won funding to run a knowledge exchange centre focusing on crime while its own bid for HEIF funding was rejected.

Similarly, Salford University was awarded £1 million to host a centre for the construction industry in collaboration with five other universities, but its own bid was dismissed.

VITAL LINKS

Centres for Knowledge Exchange, lead institutions

Brighton £370,000

Brunel £10,575,000

Cambridge £3,045,000

Central England £997,706

Central Lancashire £300,000

De Montfort £1,000,000

East London £1,000,000

Harper Adams Univ College £1,000,000

Hertfordshire £1,000,000

Huddersfield £425,000

Hull £1,000,000

Liverpool John Moores University £500,000

University of the Arts London £850,000

Luton £1,800,000

Nottingham Trent £650,000

Oxford Brookes £367,179

Portsmouth £1,000,000

Salford £1,000,000

Sheffield Hallam £500,000

Sunderland £324,563

Teesside £396,500

West of England £1,000,000