Vice-chancellors ‘must come clean’ over grace-and-favour homes

University and College Union calls for regulator to close loophole that allows institutions to omit details of housing perks from annual statements

March 15, 2018
Michael Arthur
Source: UCL
Michael Arthur

UK universities have been urged to reveal the true value of vice-chancellors' housing perks after it emerged that one institution head received rent-free accommodation worth £60,000 a year.

Documents passed to Times Higher Education show that Michael Arthur, president and provost of UCL, was provided with “rent-free accommodation” with an “estimated rental value of £60K per annum” on top of his £366,204 salary and benefits package in 2016-17.

The £60,000 figure was not reported in UCL’s latest financial statements. Under guidance published by the Higher Education Funding Council for England, universities must state the “estimated money value of any other taxable benefits received by the head of institution, other than in cash…in particular…subsidised accommodation”.

However, many universities do not report the value of university-owned housing provided to their vice-chancellor because they regard the accommodation as cost-neutral and having “nil taxable value”.

In a statement, UCL said that the “accommodation provided for the provost is rent-free as UCL owns the property” and that Professor Arthur is “required to occupy the flat as part of [his] contract of employment so that [he] can be available close to campus. It is therefore not a ‘perk’.”

The university had been “asked to put a value on it, which is £60,000 but, as this is only an estimate and rent is not charged, there is no requirement for UCL to include this figure in either its tax submissions or its financial statements”, the statement added.

The disclosure, which was obtained via a Freedom of Information Act request, comes amid demands for greater transparency over non-cash benefits enjoyed by vice-chancellors, which were highlighted by Channel 4’s Dispatches programme last month.

This year’s Times Higher Education survey revealed that vice-chancellors were paid an average of £268,103 in salary, bonuses and benefits in 2016-17, which was £10,180 more than in 2015-16, and amounted to a rise of 3.9 per cent.

Figures obtained by the University and College Union in April 2017 showed that 24 universities provided their leaders with grace-and-favour homes worth at least £28 million – £1.2 million a property.

However, many universities choose not to disclose details of these properties in their financial statements, often citing the “nil taxable value” exemption. In its accounts for 2014-15, the London School of Economics said that the estimated market rent of its director’s housing was £133,000 a year, but it did not make a similar disclosure for 2016-17.

However, the University of Nottingham disclosed that the “accommodation allowance” for its vice-chancellor in 2016-17 was £42,000, which counted towards former vice-chancellor Sir David Greenaway’s overall remuneration of £381,000.

Calling for England’s new higher education regulator to close the “nil taxable value” loophole, Sally Hunt, UCU general secretary, said that the “current set-up is clearly not fit for purpose and the onus is on the Office for Students to actually deliver on proper regulation”.

“Whether it is grace-and-favour homes, a £2 biscuit expense claim, sitting on the committee setting their pay or arranging a bespoke pension deal, vice-chancellors’ pay and perks scandals have been an embarrassment for too long,” said Ms Hunt. “The time has come for proper transparency over the spending of senior staff in our universities.”

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