'Justify huge v-c pay rises'

March 15, 2002

Sir Howard takes institutions to task.

Pay rises awarded to vice-chancellors are being investigated by the English funding council, it emerged this week.

Sir Howard Newby, chief executive of the Higher Education Funding Council for England, has demanded an explanation from the chair of governors at each of the 17 institutions that awarded their vice-chancellors a pay rise of 15 per cent or more in The THES league table.

In a letter to each chair of governors, Sir Howard writes: "It is part of my role to ensure that the public funds we allocate to universities and colleges are not being misused and that normal expectations of efficiency, effectiveness, propriety and value for money are being applied in determining remuneration.

"I should be grateful to know on what basis your institution determined that a remuneration package of that level was appropriate; and for your assurance that the remuneration committee and governing body took full account of the enclosed guidance in reaching their decisions."

Sir Howard's intervention came after higher education minister Margaret Hodge ordered an investigation into vice-chancellors' pay, focusing on severance payments. The funding council issued guidelines on these payments in 1997, based on a report published in 1995 by the Public Accounts Committee on severance payments to senior staff in the publicly funded education sector. The guidance was intended to ensure that governing bodies and remuneration committees reached settlements that could be justified.

The guidelines state: "If the council concludes that there has been a misuse of public funds, it is prepared to use all the powers at its disposal to rectify the situation."

The 17 cases under investigation include seven in which the vice-chancellor has since left: Sir John Daniel, formerly of the Open University; Sir John Kingman, formerly of the University of Bristol; Frank Gould, formerly of the University of East London; Sir William Stubbs, formerly of the London Institute; David VandeLinde, formerly of the University of Bath; Brian Follett, formerly of the University of Warwick; and John Quelch, formerly of the London Business School.

It also includes two where a new vice-chancellor has been taken on. The pay of Sir Richard Sykes, rector of Imperial College, London, could not be deduced from the accounts; but Christopher Edwards of the University of Newcastle got more than his predecessor.

There are also a handful of special cases. Peter Rigby, chief executive of the Institute of Cancer Research, had a 50 per cent pay rise, but until March 2000, he received only half his agreed remuneration while he continued his research for the National Institute for Medical Research. Likewise, Nottingham Trent University vice-chancellor Ray Cowell's earnings included £11,000 in profit-related pay that was deferred from previous years.

Six cases remain, of which Colin Lucas, vice-chancellor of the University of Oxford, got the highest pay rise of 24 per cent. A spokesman said: "The regular triennial review of the salary of the vice-chancellor was carried out two years ago. This took account of changes in the role of the office that would occur when major reforms of the governance were introduced in October 2000. At that time (1999-2000) the vice-chancellor's salary was £94,211 - among the lowest of pre-1992 universities."

The pay rises received by the heads of the Royal Northern College of Music, the Royal Agricultural College, the Kent Institute of Art and Design, City University and Thames Valley University are also under investigation.

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