University Vice-Chancellors: Pay

Wera Hobhouse Excerpts

Wednesday 11th October 2017 Commons Chamber

[Dr Murrison]

The hon. Gentleman is obviously correct. That is why I am bringing this matter to the Floor of the House. There is an issue with Governments seeking to control pay in that way in the private sector, but not in the public and quasi-public sectors, where things are quite different due to the large sums of public money. It is perfectly legitimate for this place and for Ministers to be involved in some of that, certainly in setting the right environment for the determination of pay settlements. We will be in an unhappy, uncomfortable place if we continue to see the escalation of recent years.

[Wera Hobhouse (Bath) (LD)]

The University of Bath is in my constituency, so I take a great interest in this. A motion raising concerns over the vice-chancellor’s pay was discussed during a meeting of the university court in February this year. The motion was defeated by the votes of the very people who had benefited from decisions on pay, despite the clear conflict of interest, which raises grave concerns about the governance of our universities.

[Dr Murrison]

I absolutely agree. The functioning of remuneration committees in universities needs to be addressed. Ministers have recently set out a vehicle for doing so, and I will come on to discuss the Office for Students and how it might be used to increase transparency about remuneration.

Remuneration committees are, to put it mildly, opaque. How they are constituted and how they operate varies, and their willingness to be open also varies greatly between institutions, as the University and College Union has made clear. Bath is probably not an exceptional example of transparency in the setting of vice-chancellors’ pay, and that lack of transparency means that the quality of those settlements is likely to be diminished. We know that well in this place, because we have been through some of this in our not-too-distant past. Sunlight is the best disinfectant, and the public getting to see what is going on often acts as a restraint on pay and benefits. Any transparency that can be linked to the process and to this part of the quasi-public sector has to be a good thing.

We also need to discuss what has happened to pay more generally within higher education. Much of the disaffection that has been expressed to me since the early summer has come from the academic staff of our universities. They have expressed some frustration that the rewards for institutions achieving great things appear to be accruing to higher management staff and vice-chancellors, whereas they have seen little benefit. They have seen their salaries increase by 3.8% over five years, which is in contrast to the average 17.4% increase for vice-chancellors, and the average pay for a tenured academic is a little over £49,000.

That seems rather strange, particularly in the context of performance-related pay. If we seriously believe in performance-related pay in the public and quasi-public sectors, we cannot simply except the majority of the workforce from that form of remuneration. That makes no sense, particularly since the drivers of quality in universities are clearly those at the chalk face—those at the laboratory bench. They are the drivers of the good-quality student experience and quality research for which this country is renowned and which we must maintain. Those people are being alienated by the egregious awards that they see coming out of remuneration committees to senior people in universities. The demoralising effect must be fully understood. When remuneration committees consider top-level pay and their legitimate need to attract high-quality people to the top of their institution, they must also understand more clearly the effect of such rewards on those who do the work.

[Wera Hobhouse]

Less than a week ago, a group of students came to my surgery telling me that rents on campus are going up by 8%. Is there any wonder that people think that students who are already under huge financial pressure will pay the high salaries of some of the management of the university? The public perception is there and it reflects badly on the reputation of our universities.

[Dr Murrison]

I am particularly concerned about university accommodation, as I said earlier. As I understand it, the position at the University of Bath is that accommodation is ring-fenced, in the sense that receipts from halls of residence are ploughed back into more halls of residence. The position in Bath is slightly unusual and it would certainly not be right, from what I have seen, to suggest that the University of Bath is using accommodation directly as a cash cow. However, it is certainly the case that the university is making a significant profit year on year from the accommodation it provides to its captive audience on the fringes of the city of Bath.