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Welsh higher education institutions will suffer a real-terms cut in funding next year before the extra ?56 million allocated by the Welsh Assembly this week makes a difference. The draft budget for the Higher Education Funding Council for Wales will rise by ?7 million next year from a baseline of ?375 million. This is a rise of 1.8 per cent. In 2005-06 there will be an extra ?19.7 million, or a 5.1 per cent rise, and in 2007-08 an extra ?29 million rise, or 7.3 per cent. The funding boost does not include financial compensation promised by the Assembly to institutions who defer top-up fees until at least 2007.