Vice-chancellors appear to have been given the green light to channel an extra £330 million into lecturers' pay packets over the next three years.
Higher education minister Baroness Blackstone told vice-chancellors and academics last week that the £330 million, allocated in November last year for staff pay structures and development over the next three years, is to be distributed as universities see fit. There will be £50 million in 2001-02, rising to £110 million in 2002-03 and £170 million in total in 2003-04.
Lady Blackstone, who gave the keynote address to last Thursday's Universities UK conference on higher education funding, was responding to a question from Robert Curtis, head of the School of Mathematics and Statistics at Birmingham University.
Professor Curtis asked what the extra money would mean for academic pay.
Lady Blackstone replied: "It is up to you. It is not up to government to decide how universities want to distribute the money they have for pay."
The minister's message confused some vice-chancellors at the conference. They had understood that the money was ringfenced for strategies aimed at improving universities' human resource structures rather than being earmarked for lecturers' pay packets.
One vice-chancellor said: "The minister's answer tends to contradict the situation as many of us understood it."
When he announced the additional funding, education secretary David Blunkett indicated that he expected the money to be used to "support academic pay".
But he said that it was a something-for-something reform to help institutions recruit and retain staff and to modernise management and reward systems "on top of any pay increase which universities negotiate".
This was followed by a consultation by the Higher Education Funding Council for England and the publication of bidding criteria for the additional money. Hefce said that the additional funding would be released to institutions only on submission and approval of human resource strategies.
Hefce has identified priority areas for strategies. Vice-chancellors had understood that the bulk of the money would be directed to meeting priorities, which include training, equal opportunities and annual performance reviews.
But priority areas also include recruitment and retention, which could be interpreted as the need to raise academic salaries generally.
A Hefce spokesman said: "The consultation document makes it clear what the priority areas are. We do not want to speculate on how individual institutions will allocate their funds.
Even if all of the £50 million was to go into pay packets, with 300,000 employees in the sector, individuals could look forward only to an extra £166 next year.