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Minister to threaten universities with fines for excessive salaries
published on : 09-07-2017
Category : Higher Education
Jo Johnson expected to reveal measures to curb vice-chancellors’ pay amid student anxiety over rising tuition fees Universities who pay their vice-chancellors more than £150,000 a year could be fined if they are unable to justify “exceptional” salaries to the regulatory authority, the government is to say. The universities minister, Jo Johnson, is expected to reveal measures on Thursday aimed at curbing spiralling pay among the leaders of the UK’s universities. In a speech at the annual conference of Universities UK (UUK) – the umbrella body representing higher education institutions – the minister will tell vice-chancellors and senior university staff they must “embrace accountability” and take urgent steps to ensure they are offering a good deal for students and taxpayers. “Exceptional pay can only be justified by exceptional performance, which is why I will ask the new Office for Students to take action to ensure value for money and transparency for students and the taxpayer,” Johnson is expected to say, referring to the OfS, the new higher education regulatory body. Among the measures being introduced is a requirement that any university that pays its vice-chancellor in excess of £150,000 a year should have to justify that salary as part of their condition of registration. If an institution is unable to so, the OfS could impose a fine. Leading the way, the OfS chief executive, Nicola Dandridge, has volunteered for an 18% pay cut from £200,000 a year to £165,000, while the OfS chair, Sir Michael Barber, who works two days a week, has agreed to a 10% pay cut from £60,000 to £54,000. Johnson has become increasingly vexed by the pay packets of university vice-chancellors, which sit uncomfortably alongside growing student anxiety about rising tuition fees and mounting individual debt. The government points out that the average basic salary for a vice-chancellor is £234,000 a year. Other prominent politicians, in particular the former education minister Andrew Adonis, have added their voices to the debate. n a push for greater transparency, the minister wants universities to publish details of all senior staff earning more than £100,000 per year and will call for the introduction of a “remuneration code” in each institution, with details of the pay ratio of top to median staff pay, and an explanation for any excessive increases at the top of the scale. Johnson’s speech comes days after a colourful intervention by the vice-chancellor of Oxford University, Prof Louise Richardson whose annual salary is £350,000. She accused “tawdry politicians” and a “mendacious media” of attempting to undermine the higher education sector with claims that increased tuition fees had been used to inflate the pay packets of senior academics. She dismissed any link between the two, and in a subsequent interview agreed about the need for transparency. “I think it’s entirely legitimate we’re questioned on these issues,” she said. Meanwhile, universities in turn have begun to put pressure on the government, calling for a rethink on the costs for poorer students in England. The UUK president, Janet Beer, who is vice-chancellor of Liverpool University, is expected to call on the government to look again at maintenance grants for students most in need of help with living costs when she addresses the UUK conference on Thursday. On vice-chancellor pay, she will say: “It is understandable that high pay is questioned and it is right to expect that the process for determining pay for senior staff is rigorous and the decision-making process is transparent. It is also reasonable to expect that decisions are explained and justified.” Johnson, meanwhile, is expected to tell the audience: “The debate over student finance has, rightly, increased public scrutiny of how universities spend the money they receive from fees. When students and taxpayers invest so heavily in our higher education system, excessive vice-chancellor salaries send a powerful signal to the outside world.” The University and Colleges Union (UCU) welcomed a pledge by the minister to include leadership pay and accountability in a consultation on the new higher education regulation framework later this year. The UCU general secretary, Sally Hunt, said: “Soaring vice-chancellor pay has become a real embarrassment for our higher education sector. Jo Johnson is the latest in a long line of ministers to have seen his previous calls for pay restraint ignored. “Instead, vice-chancellors have hidden behind shadowy remuneration committees when it comes to their pay. Over two-thirds of vice-chancellors sit on their own remuneration committees and three-quarters of universities refuse to publish full minutes of the meetings where leadership pay is decided.”
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Jo Johnson, UUK excessive salaries