Leader: V-cs' pay hike is asking for trouble

March 10, 2006

Two years ago, with a pay dispute looming, our survey of vice-chancellors'

pay showed the leaders of universities receiving rises roughly twice those awarded to their staff. The contrast inevitably fuelled militancy among union members. Plus ça change ... The figures we publish today are likely to be even more inflammatory. Not only is this year's average rise 8 per cent, but the vice-chancellors' 25 per cent increase over the past three years is very similar to the unions' claim for the next three, when universities will benefit from top-up fees.

The remuneration committees that are responsible for the bumper rises in our survey will argue (rightly) that other pressures are at work in setting vice-chancellors' pay. One is the survey itself: there is no better negotiating tool for those whose universities are lower in the table than committee members might expect. Another is the increasingly rapid turnover at the top of universities - the average tenure is now put at less than five years. Although some vice-chancellors earn less than their predecessors, they are in a minority, as would be the case in any leadership position. The better-paid newcomers eventually drag up the going rate.

A third obvious pressure is the comparison with chief executives in organisations of similar size, some of whom will be members of remuneration committees. Last year's average increase in 350 FTSE companies was 18 per cent and there are said to be more than 1,000 UK directors earning more than Pounds 1 million a year. In the US, the first university presidents have broken through the $1 million (£600,000) barrier and plenty more are close to it. But most vice-chancellors are not subject to the swings that tightly targeted bonuses bring and they are not employed by prosperous Ivy League institutions. A better parallel might be the heads of National Health Service trusts, who averaged less than £120,000 last year.

In the circumstances, the comparisons that really matter are with other university staff. An average of £154,000 a year is not excessive for the leader of a large and complex university, but rises that year after year outstrip those allowed to the rest of the workforce are asking for trouble. Academic pay at all levels is now too complex to base comparisons on the headline figure from national settlements alone. Incremental drift, local bargaining, the Framework Agreement and performance-related increases all inflate the sector average, but even the vice-chancellors' own representatives do not claim that university staff have seen their pay rise by 25 per cent in three years. Until the leaders of higher education show the same restraint that they are demanding from the unions, disputes like the current one are bound to be well supported.

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