Small lake surrounds university enclosure (5)
I believe the answer is:
pound
'enclosure' is the definition.
(I know that pound is a type of enclosure)
'small lake surrounds university' is the wordplay.
'small lake' becomes 'pond' (I've seen this before).
'surrounds' means one lot of letters goes inside another.
'university' becomes 'U' (abbreviation for university).
'pond' going around 'u' is 'POUND'.
(Other definitions for pound that I've seen before include "Cars towed to it; hit heavily" , "Beat - poet, d. 1972" , "100 6 [PENNIES]" , "Caged poet" , "UK currency; weight" .)