Public Sector Pay Cap

Lord Adonis Excerpts

Thursday 13th July 2017 Lords Chamber

[Lord Adonis (Lab)]

My Lords, I want to ask the Minister two specific questions, of which I have given him prior notice. Do the Government believe that average salaries of £275,000 for England’s vice- chancellors are justified? What do the Government intend to do to cut vice-chancellors’ pay?

I specifically refer to the University of Bath. Bath is a mid-ranking university among the UK’s 130 higher education institutions. It has barely a fifth of the income of the University of Cambridge. A majority of that income comes from tuition fees, and most of the rest from state research grants, so students and the Government have a predominant interest in the university. This year, the university is paying salaries in excess of £100,000 to 67 staff. Of those 67, 13 are paid over £150,000.

Last year, the vice-chancellor earned £406,000. This year, despite the 1.1% cap on pay for non-managerial staff across the higher education sector, the vice-chancellor’s pay rose by 11%, to £451,000. On top of this, the vice-chancellor, Glynis Breakwell, earns £27,000 from three non-executive directorships, which she apparently has time to undertake alongside being a full-time vice-chancellor. She also has a large house in the historic centre of Bath—a benefit in kind worth £20,000 a year. Put all that together, and Glynis Breakwell is paid almost exactly half a million pounds—more than three times the Prime Minister’s salary.

The University of Bath has a remuneration committee and governing bodies to decide these matters and prevent abuse. The problem is that the governing council is mired in controversy over this precise issue. In February, after an intense debate, the university court voted by the narrow margin of 33 votes to 30 not to censure the remuneration committee. However, that majority of three included the vice-chancellor herself and the very members of the remuneration committee whose conduct was in question. I have been contacted by many members of the university, staff and students. One member of the court has written to me, and has given me permission to quote his words to the House. He says:

“I find the failures of governance and unchecked self-serving senior management to be sources of nauseating embarrassment and inevitable reputational harm to a university otherwise comprised of wonderful, hard-working, and dedicated students and staff”.


If this is not a case for HEFCE and the Government to intervene, I do not know what is.

People often say that top pay is only one brick in the wall and it does not make much difference to the whole edifice what people at the top are paid. However, this is to miss the crucial point that top pay is just the apex of the pay structure, and it determines what happens across senior management within an organisation. The fact that the vice-chancellor is paid £500,000 makes possible the pay of more than £100,000 for the 66 others at Bath University whom I mentioned. Take those 67 salaries together, and the total is £8.7 million. That is £8.7 million out of the university’s budget of £283 million—a sizeable chunk. If that £8.7 million were halved, it would save £4.4 million—the budget of many secondary schools.

A final point is that the highly paid should set an example, particularly at a time of pay restraint. The only example the vice-chancellor of the University of Bath is setting to her staff is one of greed. That is not my idea of a university; I doubt it appeals to your Lordships either. So I hope the Minister will tell us what the Government will do to stop it.