Most vice-chancellors can have say in setting their pay

At 95% of universities in the United Kingdom, the vice-chancellor either sits on the committee that sets their pay or is allowed to attend its meetings, according to new research by the University and College Union (UCU).

The findings will add to pressure on universities to rethink how they set pay for their senior staff, which has been building since the controversy at Bath University which saw the UK’s highest-paid vice-chancellor, Dame Glynis Breakwell, step down after the Higher Education Funding Council for England (HEFCE) published a highly critical report into governance relating to remuneration at the university.

Dame Glynis’s pay package of £468,000 (US$661,000), which was revealed only after a freedom of information request by the local newspaper, the Bath Chronicle, triggered a national debate about vice-chancellors’ pay and university governance.

The response to the freedom of information request detailed £20,000 worth of home perks, including that the university employed a housekeeper for her townhouse and paid all her bills, including a £2 claim for a packet of biscuits. Andrew Adonis, the former Labour minister of state for education, called it “the worst case of fat-cat pay” he had seen.

Although it was reported that Dame Glynis sat on the university remuneration committee which set her pay, the university said she withdrew from the meeting by leaving the room when her own remuneration was discussed.

In response to the anger over this situation, the then universities and science minister, Jo Johnson, told a meeting of university leaders, gathered to discuss pay for senior university staff, that universities must change their rules to rein in rises in their pay and they should not be allowed to sit on the committees that set their pay.

In response, Universities UK issued a statement on 13 December saying it was “right to expect that the process for determining pay for senior university staff is rigorous and transparent. As universities receive funding from taxpayers and through student fees, it is reasonable to expect pay decisions to be fair, accountable and justified”.

Later in December the Committee of University Chairs (CUC) published a draft voluntary code for consultation, which included a paragraph on procedural fairness which stated that “no individual can be involved in deciding his or her own remuneration”.

The CUC said: “The CUC recognises that universities can do more to explain the remuneration decisions that they make and ensure that all appropriate governance arrangements are in place.”

However, three-quarters of institutions contacted by UCU in its survey, covering the academic year 2016-17, would not release full minutes of the pay committee’s meeting.

The findings are part of the union’s work looking into pay, perks and transparency at the top of universities. The union sent a freedom of information request to 158 institutions asking about membership of their remuneration committee – the body that sets vice-chancellors’ pay – and asked for a copy of the most recent committee minutes.

When asked about the vice-chancellor's membership of the remuneration committee, 15 universities refused to respond and one said they did not have a remuneration committee. Of those that did respond, and had a committee, almost half (47%) said the vice-chancellor was a member. Of the universities which said the vice-chancellor was not a member of the remuneration committee, just seven said he or she didn't attend its meetings.

Only a quarter of universities (25%) sent unredacted minutes of the latest remuneration committee meeting. Eighty-nine universities (55%) said they would share the minutes, but just 40 of them were prepared to do so without redacting them fully or in part.

The survey found that universities where vice-chancellors sit on the remuneration committee include 10 universities in the Russell Group of elite research universities: Cardiff and Durham universities; the universities of Birmingham, Cambridge, Liverpool, Nottingham, Sheffield and Warwick, and Queen Mary University of London, and University College London.

Upcoming strike action

The findings come as 61 universities are facing 14 days of strike action over Universities UK's proposals to end the defined benefit element of the Universities Superannuation Scheme pension scheme. UCU says this would leave a typical lecturer almost £10,000 a year worse off in retirement than under the current set-up.

Of those 61 universities, just two have vice-chancellors who neither sit on their remuneration committee nor can attend its meetings, UCU said.

The sense of grievance is heightened by the sizable pay rises university vice-chancellors have enjoyed in recent years. The average pay (excluding pensions) for vice-chancellors in 2005-06 was £165,105. Over the next decade it increased by 56.2% to £257,904 (US$364,000) in 2015-16.

During the Bath controversy, unions called on Breakwell to step down as a director of the Universities Superannuation Scheme.

The UCU said there had to be radical change to how senior pay was set and governed in universities. The newly-formed Office for Students has promised to tackle the issue, but previous efforts to rein it in have failed. UCU said it wanted to see students and staff on the remuneration committee and the vice-chancellor removed and barred from attending, with all minutes made public.

UCU General Secretary Sally Hunt said: “It is quite staggering that just seven universities say their vice-chancellor was neither a member of the committee that sets their pay, nor allowed to attend the meetings. For too long universities have got away with painting remuneration committees as independent bodies to deflect attention over senior pay.

“The time has come for proper transparency of senior pay and perks in our universities and that starts with full disclosure of the shadowy remuneration committee. It is scandalous that three-quarters of universities refuse to issue full minutes of these meetings.

“We are pleased the Office for Students has said it wants to tackle the issue but plenty of politicians have tried to address the problem in the past and failed. We need the vice-chancellor to be removed from the remuneration committee and barred from attending its meetings. Staff and students should be given seats at the top table in universities and all minutes should be made public.”

The CUC’s draft code says that the remuneration of the head of an institution must be “separately justified, published and related to the remuneration of all staff within the organisation”. Responses to the draft are to be submitted by 12 March.

Last September Johnson, who has since been replaced, announced that universities will be fined if they fail to justify – via a written explanation to the new higher education watchdog, the Office for Students – paying their vice-chancellors more than the prime minister who takes home £150,000 (US$212,000), a rather modest salary for the level of responsibility.