Vice chancellor pay

Today, (7 Dec), there has been widespread scrutiny of senior academics’ pay following the departure of the vice chancellor of Bath Spa University, Professor Christina Slade, who received more than £800,000 in an exit package in her final year in the post.

The Today Programme ran a special feature this morning on universities, broadcasting live from Kent University.

The Universities Minister, Jo Johnson has repeatedly called on the sector to exercise restraint in terms of vice chancellor pay. In a speech in July, the Minister said when students and taxpayers invest so heavily in our higher education system, value for money should be guaranteed.

The Department will be issuing new guidance to the Office for Students to address this.

In his July speech, Universities Minister Jo Johnson said:

Another area where I want to see further action to improve value for money is vice chancellor pay. There are vice chancellors earning nearer half a million pounds – in some cases more than three times the Prime Minister.

Swelling vice-chancellor salaries lift those of their deputies and other senior managers, diverting millions from universities’ core mission of teaching and research. There seem to be institutions in which over 100 people are earning more than £100,000.

Each year that I have been in my role, I have used my annual grant letter to the funding council to call on universities and their remuneration committees to exercise restraint on top pay.

I am calling on the sector to put an end to the accelerating upward ratchet in vice chancellor pay. Groups that claim sector leadership, such as the Russell Group, must lead the way.

I do not want or expect the OfS to cap VC pay, let alone to set pay levels. Our universities are autonomous and this is a job for them to undertake in a responsible manner.

Rather I want it to examine senior pay from a value for money perspective and to offer advice on the considerations to be taken into account by remuneration committees.

Performance against benchmarks in the TEF is a potential indicator of value-added that remuneration committees might consider before approving high pay awards.

The essential principle must be that exceptional pay can only be justified by exceptional performance.

Universities must justify the exceptional circumstances for pay awards that exceed the pay of the PM – and where there is no justification, they must exercise greater restraint.

And I can announce that I will be issuing new guidance to the OfS to use its powers to address this problem.

Universities are autonomous when it comes to setting pay, but it’s important this system commands public confidence and delivers value for money.

This is why from next year the new Office for Students will expect transparency and accountability, with justifications required for exceptional levels of pay that exceed £150k.