Marketisation is behind rows over v-cs’ pay and other urgent questions

Market forces unleashed on the UK university sector have pushed up senior pay, fuelled the rows over it and posed questions about ‘value for money’ that are shaping the future of universities

February 22, 2018
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Have we passed peak vice-chancellors’ pay in the UK? In terms of the size of pay packets, probably not. The idea that there will be a gradual decline to the £150,000 a year figure proposed for all but the “exceptional” is pure fantasy. But if we’re talking about the gale-force winds of public opprobrium that battered university leaders late last year, then the answer may be “yes”.

Those autumn and winter storms were whipped up by sustained politicking by some and by genuine concern among others; the clouds were swollen by some eye-watering outliers among individual vice-chancellors – including astonishing pay-offs.

But there’s a sense that everything that can be said about v-c pay has been said 10 times over, and what happens next will depend far more on university governing boards than on the regulator.

In our annual cover feature (and pardon the reminder, but we have been covering this issue comprehensively for almost two decades), we run the latest numbers, highlighting how each v-c’s pay and benefits stack up.

The focus of this year’s analysis, however, is on governance: whether and where it has gone wrong, how it might need to change, and how likely it is to do so.

The limitations of university governance have been clear during the debate of the past six months.

There have been specific examples: in the case of the University of Bath, which has played the part of lightning rod, an official inquiry identified “poorly handled and flawed” processes, which allowed the vice-chancellor and members of the remuneration committee to vote down a motion criticising how pay was set.

But look beyond the localised weather, and there can be little doubt that it is marketisation that has driven much of the climate change.

The standard defence of high pay has been to compare running a university to running a multinational company, to suggest implicitly at least that vice-chancellors are now captains of industry and must be paid as such. These comparisons completely miss the point and in many ways diminish universities, which are far more important, and more complex, beasts than purely corporate entities. What that means for pay for those at the top, and whether it is too idealistic to suggest that institutions deserve leadership that is not motivated primarily by money, readers can decide for themselves.

As was pointed out in a blog for Times Higher Education by Stuart Farquhar, an expert on governance at the University of Wolverhampton, it also misses the point in the sense that universities are usually charitable organisations with the tax benefits that this entails.

What’s more, private-sector companies are bound by the Corporate Governance Code, and in Farquhar’s estimation, many universities would likely fail its tests on the setting of executive pay.

So it’s perhaps worth being careful of the comparisons one invites.

The effects of the marketisation of higher education run far deeper than senior staff salaries, of course, and in our second feature this week, an academic examines how “value for money” has become one of the most influential concepts shaping the future of our universities. This is particularly topical in a week in which prime minister Theresa May unveiled the long-trailed review of fees and student finance in England.

Andrew McRae, professor of English and dean of postgraduate research at the University of Exeter, summarises the risks thus: “Nobody, least of all academics, wants universities that are not providing value. But if ‘value for money’ continues to mean radically different things to different people, this…debate is unlikely to lead to a better place.”

Those “three little words”, he says, “isolate the relationship between a buyer and a seller, focused on the quality of a commodity. But degrees are a peculiar kind of commodity.”

He’s right to focus on the words that underpin so much of the change that is taking place in English higher education. If these are now the terms of the debate, they pose a question on pay, too: does a half-million-pound vice-chancellor represent value for money? And for whom?


Print headline: Base currency

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