Exquisite Life, the Research Fortnight blog, has done some modelling of the effect that 15% cuts will have on the sector. It's not good. It models three different scenarios: the Cable, the Willetts and the Universities UK (UUK).
The Cable one spreads the pain most widely, cutting funding to 2* and some 3* research. The Willetts concentrates funding on the bigger, broadly strong departments, maintaining critical mass across the system but at the expense of smaller, sometimes higher quality departments. So, a loss of diversity. A spreadsheet showing the effect of this is available here. The UUK suggests that departments have to cross a quality threshold (based on the last RAE) before they can receive funding.
All choices are awful, but some cuts are inevitable. However, the blog's author, William Cullerne Bown, thinks that 'bad as they may be, all three scenarios are, in my book, better than the Russell Group’s preferred Option 4 - limiting QR to the top 30 or so universities. At least these scenarios all leave some dynamism, some competition in the system.'