Several public universities on Wednesday said they understood the public finance challenges faced by the government, and are fully prepared for a funding cut.

This follows Financial Secretary Paul Chan's announcement in his budget speech that publicly-financed universities will see funding slashed by two percent. The reduction will be compounded over three years.

Chan said the move will result in savings of HK$2.8 billion between 2025-28.

The University Grants Committee also revealed in a subsequent statement that universities need to return HK$4 billion from their General and Development Reserve Fund to the government in a one-off special arrangement.

In response to the development, Chinese University said it understood the need for all sectors to work together during tough times, adding that it will carefully study the potential impact on its operations, and minimise disruption to teaching and research.

The sentiment was shared by City University, which said in a statement that it will actively explore diverse income sources and seek additional research funding.

Polytechnic University also echoed the views, saying it will find ways to optimise its fiscal resources by controlling its expenditure and increasing revenue.

Meanwhile, the University of Hong Kong said it'll work through tough times as part of the society, but hoped the administration will review university funding policies when the economy gradually recovers.