Corby, Crawley and Croydon are bidding to join Cambridge as university towns, it was announced yesterday. Basildon, Basingstoke, Dudley and Stockport are also among 27 areas in England bidding for funding to launch new higher education (HE) centres, said the universities secretary John Denham. They are among the first places to apply to take part in the government's "university challenge" initiative, launched in March.

Denham said the project would help regions hit by the recession by providing education and regeneration in rural areas as well as cities. Opposition MPs accused the government of "knocking up" the idea to compensate areas which had been earmarked for casinos but missed out after the project was scaled back at the beginning of the year.

Partnerships of regional development agencies, local authorities and colleges have put together bids for the universities centres, which will teach a range of degrees but fall short of being standalone universities because they will not have their own degree-awarding powers or privy council approval.

Universities in neighbouring areas will be a crucial element in the partnerships accrediting the degrees. The government wants 20 new higher education centres planned within the next six years. The new centres could provide study places for up to 10,000 students.

Ministers want the centres to open up the chance to study for a degree for people who would not have given much thought to a degree previously. According to economists, every extra job a university creates is matched by another elsewhere in the economy, such as in restaurants and bars, to cater for the student population.

But Martin Freedman, head of pay, conditions and pensions at the Association of Teachers and Lecturers, said: "Some of the 27 towns interested in setting up higher education centres already have successful further education colleges. We don't want these colleges and new universities to compete for students at each other's expense.

"In the light of the government's cap on the number of extra HE students, this proposed university expansion raises questions about how additional universities can function if limits are placed on the number of students?"

Universities are already struggling to fill their places after ministers were forced to cut the numbers funded to go to higher education next year. Last month, Denham froze additional student numbers after admitting the government had botched its estimates for student grants and could no longer afford its support package.

University hopefuls

Areas bidding to run universities: Accrington, Basildon, Basingstoke, Corby/Kettering, Crawley, Croydon, Doncaster, Dudley, Ebbsfleet, Halifax, Havering, Herefordshire, King's Lynn, Milton Keynes, Rochdale, Rotherham, Sandwell, Scarborough, Shropshire, Somerset, Stratford Island, Stockport, Swindon, Thurrock, Wakefield, Wallsend and Wirral

Choosing a location for a new Gypsy site is often just as controversial for the Gypsies themselves as the settled community living in houses nearby.

"Every single site we see today is on some sort of ex-council tip or sewer bed or under pylons, or on some land that no one else would want to live," said Joe Jones, the vice-chairman of the UK Gypsy Council.

Take the long-established Star Hill site, just outside the village of Hartley Wintney in Hampshire. Though surrounded by greenery and immaculately kept, it backs right on to a noisy and sometimes smelly rubbish tip and recycling plant. "When the wind blows the wrong way, we can't open our doors and windows for the smell," said Pauline Bowers, 60, who has lived in a spotless trailer on the site for 18 years.

Star Hill is run by Hampshire council, which has not applied for funds from the £97m pot this year to renovate or expand the site. But the South East Regional Assembly, the body responsible for long-term planning, is running a consultation for local people, asking them for their views on where more than 1,000 new pitches should be located in the region between now and 2016.

Star Hill residents complain they don't have nearly enough space to accommodate their ever-growing families. May Johnson, 53, has lived on the site for seven years, along with her parents, brother and cousin. But there is not room for the whole family. "There are people that are waiting to come on to here but they can't because people are settled. There's not enough pitches."

Joe Jones said the Gypsy community had swelled while the general population dwindled. "We currently have 4.8 children per family, far higher than the national average," he said.

Gypsies are often offered council houses rather than pitches for their caravans. "If I had to live in bricks and mortar I wouldn't be able to stick it," said May Johnson. Pauline Bowers's sister tried it and was back on site "within a couple of weeks", she said.

Many have experienced prejudice and abuse their whole lives. "A lot of people say we're dirty gypsies, we leave rubbish everywhere. But you're in my caravan. Do I look dirty? Smelly?" asked Bowers. "Up to three years ago I used to work and I used to do a lot of cleaning in houses. Some of what I had to clean I refused. It was so messy and dirty I wouldn't touch it."

The problem, said Joe Jones, was that few people made an effort to get to know the gypsy community. "If somebody buys a house next door to you, you open a bottle of wine and have a housewarming party. But when we arrive the reception we get is the police and the council telling us to move on. No one comes out and says 'Hello, how are you?' No one shakes our hand."

Architect Irena Bauman takes the Guardian's northern editor Martin Wainwright for a stroll around Leeds and outlines her manifesto for being a happy architect