Vince Cable has accused the university sector of lacking “realism and self-sacrifice” and urged “restraint” in pay for vice-chancellors and other senior staff.
The business secretary, who has overall responsibility for higher education, said he was “taken aback” when he found out that vice-chancellors’ pay rose by more than 10 per cent in 2008-09. He said it bore “no relation” to the economic problems facing the country.
In a letter jointly signed by David Willetts, the universities and science minister, he also asks the leaders of every college and university to do “more with less”.
Mr Cable told the Daily Telegraph: “I was very taken aback to discover that last year the pay of vice-chancellors rose by over 10 per cent in the middle of a financial crisis.
“There is some gap between reality and expectations in some of those institutions and although it is not our job to control pay – it is an independent mechanism – we want to signal to them that there has got to be some restraint.”
Referring to a recent visit to a struggling car plant where managers were taking a pay cut, the Liberal Democrat minister added: “I just get absolutely no sense in the university sector that there is the same degree of realism and of self-sacrifice that is going to have to happen if we are going to preserve the quality of university education.
“There is clearly salary escalation at the top level that bears no relation to the underlying economics of the country.”
Figures published in Times Higher Education in April show that pay and benefits for the leaders of 152 higher education institutions rose by 10.6 per cent in 2008-09, taking the average vice-chancellor’s salary package to £219,156.
However, the Universities and Colleges Employers Association said at the time that settlements for 2009-10 were much lower, with 70 per cent of heads receiving either no increase at all or only a 0.5 per cent rise.
Steve Smith, president of Universities UK, said Mr Cable was referring to decisions made almost two years ago and that institutions were now showing restraint.
“Obviously vice-chancellors are paid a large amount, but the vast majority will not see pay increases this year or next year, and that seems appropriate in the current economic climate,” he said.
Meanwhile, the annual accounts from the Higher Education Funding Council for England, which have just been published, show that chief executive Sir Alan Langlands earned £230,000 last year.