Are Universities UK (UUK) really justified in changing staff pension schemes?

Universities UK has justified changing the USS pensions scheme for university staff by stating that the pension scheme is running a £6 billion deficit. If this deficit is not addressed, UUK’s concern is that spending will have to be cut elsewhere and that redundancies may even be necessary. These changes are at the bottom of the industrial action that is currently being undertaken across the country.

If correct, UUK may well be right in looking to cut costs on pension schemes. Yet, strikers at the UCU strike outside of King’s College London Strand Campus on Tuesday 27th made it  clear that although the pension changes proposed by Universities UK were the most dominant issue, there were a number of other grievances which had added to a feeling of anger and resentment at management.

Joe Attard,a striking graduate teaching assistant in film studies at King’s College London, member of the local UCU executive and secretary of the Marxist society, made it clear that the changing of pensions was unacceptable when taken in tandem with vice-chancellors receiving such high salaries, and major capital investments by the universities, and showed that these institutions had the funds to maintain current pension schemes.

Upon further research, Mr Attard seems right  in drawing attention to high-spending by King’s College London. After all, the vice-chancellor of King’s College, Edward Byrne, was paid £419,000 in 2017. Meanwhile, the cost of a recent acquisition of a lease for the former BBC studio, Bush House, though undisclosed, cannot have been cheap. That universities, such as King’s College London, are able to undertake such costs does not seem indicative of institutions facing financial problems.

However, not all universities have undertaken major capital investments such as that of King’s College London, and large-scale moves like this are arguably not part of the average university budget annually. Therefore, it is perhaps best to put this argument aside.

Do vice-chancellors pay make the pension scheme change inappropriate?

The debate around vice-chancellors pay however, has been nationwide and warrants greater discussion. So, are vice-chancellors paid too much?

In 2017, the average remuneration for a vice-chancellor at a British university was £257,904. Whilst these salaries are undoubtedly high, they do not at first appear inappropriate when compared to the salaries for those employed as CEOs of charities in the UK, British universities are after-all registered charities.

For the top 100 British charities, the average CEO salary in 2017 was £255,000. This figure is remarkably similar to the UK-wide average vice-chancellor pay of £257,904. The consistency between the average vice-chancellors’ salary and the average charity’s CEO salary seem to show that vice-chancellor’s salaries are appropriate.

However, many of London’s vice-chancellors are markedly more well-paid than the average vice-chancellor in the country.

 

Institution Vice Chancellor  Salary Avg. Salary at the university
KCL £419,000 £52,021
LSE £413,000 £65,177
UCL £364,773 £49,211
City £357,000 £64,219
SOAS £260,583 £55,361

Source

 

In defending London’s vice-chancellor’s salaries, it could be argued that because the largest of London universities are significantly bigger institutions than most British universities, it makes sense that their vice-chancellors are paid more. Equally, it could be argued that because many of these universities rank highly, many are part of the Russell Group for instance, their vice-chancellors are deserving of greater pay.

However, with British charities in consideration, it is notable that many of Britain’s biggest and most well-known charities pay their CEOs less than the average salary for British charities.

According to the ThirdSector charity study:

“One of the more surprising elements is the number of well-known household charities that have not made this year’s top 100. Oxfam, which has an income of almost £415m, paid it highest earner between £120,000 and £129,000, so came 126th in the list. Other well-known charities, including the RSPCA, Unicef UK, WaterAid and WWF-UK, don’t feature in the top 100 because they paid less than £140,000.” 

This raises an important question. If some of the biggest and most well-known British charities have decided to lead the way in paying their executives less, then why can’t British universities do the same?

One answer may lie in the Times’ shocking revelation thatMost vice-chancellors sit on their universities’ remuneration committees or are allowed to attend their meetings” (Times 3). Indeed, two thirds of Vice-Chancellors were member of pay committees in 2017. That Vice-Chancellors are both paid such high salaries and sit on the remuneration committees which set their salaries at the same time, appears highly questionable.

Vice-chancellors’ salaries are inappropriate for the error in judgement they reveal

On one hand, the endowments of London’s universities number into hundreds of millions of pounds. Therefore, on a practical note, the vice-chancellor’s pay do not pose a noteworthy cost to the budgets of these universities.

However, this is not the point. It remains symbolically wrong and revealing of a major error of judgement that London’s vice-chancellors are paid so much.

This inappropriateness stems from the fact that so many of London’s vice-chancellors are paid  much more than the average vice-chancellor. This is reinforced when the salaries of vice-chancellors are considered in comparison to charities’ CEOs. A larger issue is that so many vice-chancellors sit on remuneration committees, which shows poor judgement and raises questions about the level of due-process at the management level of universities.

Consequently, one cannot help but to see similarities between the vice-chancellors’ pay and the BBC pay scandal last year. Both vice-chancellors and BBC presenters are people who receive very high salaries at institutions which are publicly funded.

Even if the number of individuals receiving these salaries is small, the point is that it is London’s vice-chancellors have been taking salaries far higher than the average-salaries of similar positions nationwide and similar positions in the broader charities sector.

As such, one can only conclude that it is no wonder that strikers are critical of management when they have displayed such hubiristic salary blindness.


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