Asked by Lord Storey To ask Her Majesty’s Government whether
they plan to bring forward proposals to cap university
vice-chancellors’ pay. Viscount Younger of Leckie (Con)
Universities are autonomous institutions and the Government have no
wish to set a cap on vice-chancellors’ pay. However, given the
investment in our world-class higher...Request free trial
Asked by
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To ask Her Majesty’s Government whether they plan to bring
forward proposals to cap university vice-chancellors’ pay.
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(Con)
Universities are autonomous institutions and the Government
have no wish to set a cap on vice-chancellors’ pay.
However, given the investment in our world-class higher
education system by students and taxpayers, value for money
must be of the utmost priority. Exceptional pay should be
justified by exceptional performance, and that is why the
Minister for Universities has announced that the Office for
Students will act to ensure transparency and justification
of senior staff pay.
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(LD)
I am grateful for the Minister’s reply. The 2017 survey of
vice-chancellors’ pay showed the top eight vice-chancellors
earing over £400,000. Similarly, the salaries of chief
executives of multi-academy trusts can be counted in
hundreds of thousands of pounds. Only today, an education
report from the OECD says that teachers are worse off today
than they were in 2005. Paraphrasing what the Prime
Minister said—that industry fat cats were the unacceptable
face of capitalism—does the Minister not consider that some
vice-chancellors are the unacceptable face of education?
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There is a mood in the country, and there has been a lot of
interest in the press, about vice-chancellors’ pay. That is
an obvious point to make. However, as a result of the work
that we did on the Higher Education and Research Bill,
particularly in this House, we are empowering the new
Office for Students to act to ensure value for money in
focusing on senior staff pay. This is happening in a number
of ways. We are introducing a new condition of
registration, requiring the governing bodies of approved
fee cap providers to publish key figures so that in future
the number of staff paid more than £100,000 per year will
be published, broken down into pay bands of £5,000. Also,
the names of staff paid more than £150,000 per year, along
with the justification for those salaries, will be produced
by the OfS, and I think that that is a good step.
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(Lab)
My Lords, is the noble Viscount confident that that will be
effective? My understanding is that just a handful of
current vice-chancellors earn less than the £150,000
threshold that he has referred to. Can he confirm that the
Government have had a similar scheme in operation for civil
servants, whereby Her Majesty’s Treasury has to give
approval to any salary above a £150,000 threshold? The
figures published by the Government in December 2016 show
hundreds of civil servants earning above the threshold. Can
the Minister really be certain that the measures announced
will be effective?
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We believe that it is absolutely the right course to take.
I say again that universities need to be good stewards of
their resources: they need to manage in a responsible
manner, there needs to be strong leadership, and it is
important that vice-chancellors’ pay is restrained. I
understand that the average salary for 2015-16 was
£234,000. Of course, the salary depends on the size of the
institution and the responsibilities. At the end of the
day, what counts is whether the pay is right for the
responsibilities of the role and the size of the
institution. That is one thing that has to be focused on by
providers and universities.
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(Con)
My Lords, if universities are indeed autonomous—we have in
this country some of the finest in the world and we should
be proud—surely we should be publishing not
naming-and-shaming lists but, rather, lists of those to
whom the whole community owes something for the excellence
they demonstrate. I put it to my noble friend that it is
not the job of government to meddle in these things.
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We do not believe that we are meddling; we are setting down
a framework of how we are encouraging universities to
operate. As this House will know, the Office for Students
is being given extra remits to be able to set the framework
to be sure that universities look at how they operate and
how they manage a prudent operation.
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(Lab)
My Lords, I speak as a former vice-chancellor. Is it not
lamentable that many vice-chancellors use as their defence
a kind of cult of personality, with themselves as global
superstars? This is at a time when the pay of the average
university lecturer has been very poor, to the point that
many of them have difficulties with professional mobility
and housing, and when the unit of resource per student is
going down and many lecturers have been made redundant.
Should we not collectively, irrespective of party in this
House, condemn this kind of approach and remind our
vice-chancellors that universities are a team effort and
that they depend on morale and the inculcation of values in
which everyone can believe?
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The noble Lord makes a number of good points. It is not just
the level of the vice-chancellor’s remuneration that is
important—it is that of senior staff as well. It is important
that the vice-chancellor’s salary does not vastly exceed that
of other staff. The noble Lord alluded to that. I go back to
the responsibilities involved. For example, the University of
Manchester’s annual income for 2015-16 was £987 million. It
runs more than 1,000 degree programmes. There are nearly
40,000 students and 12,000 staff. There are considerable
responsibilities involved. I do not want to defend
vice-chancellors, but our aim is to put enough pressure on
these institutions to ensure that their house is in
order—just as with a private company.
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(LD)
My Lords, I do not wish to disparage our great universities;
they are a source of great pride to the nation. What is the
Government’s view on the pension packages of some
vice-chancellors? Some of them have very large lump sums and
very generous pension payments, as well as additional salary
supplements—all presumably paid for out of public funds. Are
the Government concerned about this in any way?
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There was a Question in the House the other day about pension
schemes, particularly looking at concerns about the deficit.
I hope that I addressed those concerns. We have to look at
the package as a whole. We are focussing on vice-chancellors’
pay, but the package includes a pension scheme. I am not
going to comment as to whether it is generous or not, but it
is a final salary scheme. It is important for universities to
take account of the whole package for vice-chancellors,
including not just the pension but perhaps also the housing
that they are in. This has been in the press as well.
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