Pay rise in doubt as cash crisis bites

Financially stretched institutions may seek to delay 2008-09 increase. Chloe Stothart reports

May 29, 2008

Many academics may not receive the pay increase agreed for 2008-09 as some universities plan to defer the rise in the face of growing inflation.

At least 20 to 30 institutions are said to be seriously considering putting off the pay rise, which was agreed as the final part of a three-year deal.

Under the agreement for 2008-09, university staff will get an increase of either 2.5 per cent or the retail price index measure of inflation for September 2008, whichever is greater.

RPI inflation is currently running at 4.2 per cent, and is likely to be higher still in September. It was far lower when the deal was signed after an industrial dispute by academics in 2006. Institutions facing financial trouble are allowed to defer pay rises for 11 months.

The three-year deal gave academics 10.4 per cent rises in the first two years, with the increases coming against a background of higher pension costs, bigger pay bills from the modernisation of pay structures under the 2004 framework agreement and only limited growth in teaching funding.

Les Ebdon, vice-chancellor of the University of Bedfordshire and chair of the Million+ group, representing post-1992 institutions, said: "Certainly, 20 to 30 (institutions) have told me they are looking at deferring; there is a lot of uncertainty." He said Bedfordshire would be able to meet the pay rise, but he has already blamed spiralling pay costs for 30 redundancies at his university in 2008.

Philip Harding, chair of the British Universities Finance Directors Group and finance director at the University of Westminster, said some heads of finance were looking at deferring.

"None have said definitely that they won't pay it, but I know that a number of finance directors are looking at it very seriously. It would not surprise me if some institutions decide to defer it on the grounds that it is unaffordable," he said.

Westminster, he added, would honour the 2008-09 pay increase.

He said the implementation of the framework agreement and higher pension contributions are increasing pay costs by about 8 per cent a year, and the pay deal was an additional expense.

The Universities and Colleges Employers Association said some institutions may struggle to meet a 4 per cent pay rise (for 2008-09) in addition to this month's 3 per cent rise, agreed under the 2006 deal.

A spokesman said: "Employers have emphasised from the outset of the 2006-09 pay agreement that the deal ... was at the absolute limit of affordability.

"This pay offer is in addition to increases under the framework agreement, regular increments and excellent pension provision, which is an important and valued part of the remuneration package in higher education.

"Making RPI predictions for October ... remains a little premature, but it is important to note that employers have honoured all elements of this excellent pay deal thus far," the Ucea spokesman said.

Sally Hunt, general secretary of the University and College Union, said: "The bottom line is that we negotiated a good pay settlement and the employers have to honour the agreement. Any institution that seeks to unilaterally defer the 2008-09 award negotiated by the UCU in good faith will face the full force of the national union.

"Employers have had two years to plan and budget for this award and excuses now are simply not acceptable," Ms Hunt said.

- The University of Plymouth has announced that it will cut its spending by £10 million in 2008-09 as part of a major restructuring initiative.

It plans to cut 10 per cent from its pay bill and save at least £2 million from other areas, such as the closure of the Exmouth campus and reductions in utility bills, under reforms designed to clear a financial deficit that is predicted to hit £3 million this year.

Plymouth will invest in a range of popular subjects, including creative disciplines and marine, health and biomedical sciences. In addition, it will cease to offer some subjects, with plans to be outlined in a more detailed consultation in July.

"If we do lose some posts, we would wish to do that through voluntary means," said Mary Watkins, the deputy vice-chancellor.


International issues such as the call to consider a boycott of Israeli universities must not be allowed to dominate the University and College Union's agenda, Sally Hunt, the union's general secretary, was due to tell delegates at the UCU annual congress this week.

Ms Hunt (right) stressed the union's opposition to any future increase in tuition fees and said: "Further major reforms of further and higher education to make them increasingly demand led, employer dominated and market driven are under way. Our system, once the envy of the world, is now the most privatised in Europe."

She asked delegates to help shape "an alternative vision of education", warning that it would not be achieved "by overworking and underpaying the life-changers at the heart of education - the staff."

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