Pay boost will come at a price

January 23, 2003

Key points

  • £167 million over two years ring-fenced for rewarding and recruiting staff

  • Pay rises will be linked to staff performance

  • Market supplements to attract the best academics on the international market

Academics' pay rises will be linked explicitly to their performance under the white paper's plans to provide millions more for rewarding and recruiting staff. The government has earmarked an extra £167 million for 2004-05 and 2005-06, but it will release the money only in return for clear "human resource strategies".

Ministers are demanding that institutions commit themselves to "rewarding good performance" and to providing "market supplements" to ensure high-flying staff in both teaching and research are paid enough to stop a brain drain abroad or to industry. Institutions that commit to "modernising" their pay systems in this way will be rewarded with a rise in their block teaching grant from 2007.

The paper accepts there is a serious recruitment problem, with a "worrying" level of unfilled vacancies and "anecdotal reports of a decline in the quality of new applicants for academic jobs". It intends to build on the system already in place, which has seen £330 million specifically earmarked for staff pay handed over since 2001, albeit with strings attached.

The Higher Education Funding Council for England distributed the money to institutions in return for strategies designed to recruit, reward and retain staff, with emphases on equal opportunities, staff development and tackling poor performance. This will continue, with £50 million allocated for 2004-05 and £117 million for 2005-06.

After these two years, money for pay will become incorporated into an institution's block teaching grant, to free them from yet more strings-attached cash, but only if they commit to "modernisation"

"Once individual institutions have human resource strategies that demonstrate to Hefce that they will take steps to move towards market supplements or other differentiated means of recruiting and retaining staff, and commit themselves to rewarding good performance, their earmarked funding will be transferred into the block grant for teaching," the paper says.

Institutions will be encouraged to address pay at the top end of the research field. "Comparing US and UK academic salaries, it is striking that the difference in average salary scales is far smaller than the difference in salaries at the top end for the best researchers," it says.

Lecturers' union Natfhe said it had high hopes for across-the-board pay rises following a positive financial settlement for the sector to 2006, but said it was "deeply disappointed" that money specifically earmarked for pay was so low, and with so many strings attached.

The Association of University Teachers said: "At least the message that university teachers are grossly underpaid has been recognised," but it warned that it would oppose performance-related pay.


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