Here is another article about changes to university funding.
http://www.lrb.co.uk/v33/n24/keith-thomas/universities-under-attack
It seems to me that the government have a flawed understanding of what universities are about and how collaboration rather than competition is the default and best mindset of academics. There are occasions when competition is appropriate (as when applying for grants) but generosity has been the main attitude I have experienced when communicating with academics from other universities.