I write this in the final month of my two-year term as chair of the Universities and Colleges Employers Association, having served on its board for seven years. This has been a challenging era for the sector, yet what higher education faces now will perhaps be its most testing time ever.
In 2002, we were all still grappling with the Bett and Dearing reports, which prompted radical reforms to pay and conditions, including pay equality through job evaluation. The resulting 2004 Framework Agreement established a single national pay spine to underpin locally determined reward structures - enabling the largest human resources initiative ever undertaken in the sector.
Pay increases since 2001 have more than met the recommendations made by Bett and Dearing, with the 2006-09 deal alone giving employees a minimum increase of 15.9 per cent on top of annual increments while the lower paid received even more. The sector continues to provide excellent benefits and pensions.
The sector's rapid expansion and growth in salaries highlighted the need for reliable information, and the 2008 Joint Review of Higher Education Finance and Pay Data established accepted figures to facilitate and inform future pay negotiations. The report showed the improvements in pay and conditions and demonstrated the testing financial positions of institutions seeking sustainability. It also showed what can be accomplished in such a joint forum involving employers and unions.
But progress has been mixed with frustrations and setbacks. The bitter 2006 pay dispute affected many in the sector and beyond. It came close to damaging the futures of students and left many questioning the benefit of national negotiations. The reformed national bargaining machinery was a good step forward, but the problems experienced this year have started to resurrect arguments for local bargaining where "something for something" negotiation may be more achievable.
We are now facing the end of a period of growth. The agenda is shaped by the economic downturn and the actions taken by governments to meet it. The circumstances for public finances have been widely reported, but financial sustainability was an issue for institutions even before the downturn. In the context of reduced funding, the increases in employment costs - the 2008-09 pay award, incremental progression and extra contributions to pensions - are beyond income levels and have pushed affordability to the limits. This is what led Ucea to offer an uplift of 0.5 per cent to the national pay spine that we believe is responsible, realistic and credible.
In addition, Ucea has offered joint working on a range of issues raised by the unions through three joint working groups. We currently await the unions' response. Each is now in consultation.
We all recognise that pensions are a far greater challenge than a decade ago. The sector must address the acute pressures arising from greater longevity, increasing salaries and, recently, the reduction in value of investments. It is essential that our high-quality pension schemes adapt to modern circumstances to ensure their sustainability for current and future staff.
Part of the current context is also a widely shared concern around job security. Higher education staff have some of the best employment frameworks in the UK, and decisions affecting jobs are never taken lightly. The bedrock of this job security has been, and will continue to be, financial sustainability. There is clearly a link between the magnitude of any pay settlement and the number of posts that can be sustained. Most people understand that an unaffordable pay rise would inevitably lead to greater job losses.
I leave Ucea as higher education faces the most testing economic circumstances in recent history. My concerns have always focused on the wellbeing of the institutions, their staff and their students. It is vital that we keep this focus, and I urge employees and trade unions to seek to understand the financial predicaments of their institutions. In the increasingly competitive international context, failure to recognise current challenges, and work together to meet them, could jeopardise the very success of UK higher education in which we all rightly take pride.