Government's universities regulator should step in to curb sky-high bosses' pay, say MPs

Posted On: 
5th November 2018

Britain's universities regulator should rein in the "unjustifiably excessive" salaries of vice-chancellors, MPs have said.

Vice-chancellors take an average of £268,103 in salary, bonuses and benefits in 2016-17
Credit: 
PA Images

A report by the the Commons’ Education Committee says independent Office for Students (OfS), which reports to ministers, should be “firmer” and “intervene” where top management figures take home more than eight times the average staff salary.

It follows public anger at the sector for shelling out an average of £268,103 in salaries, bonuses and benefits for vice-chancellors.

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Bath University's Dame Glynis Breakwell was subsequently forced out over her £471,000 pay package.

The OfS, which was set up earlier this year, demands universities publish details of vice-chancellor’s pay, but it has limited powers to dictate their earnings.

It can, however, suspend institutions from the OfS, thereby holding back crucial funding.

From next August it will will also be able to fine those which fail in transparency or to justify the pay of senior staff.

Chief Executive Nicola Dandridge told the committee last December that while universities were autonomous and should sort out the “problem” itself the OfS would intervene if they fail to do so.

MPs say the current system of self-regulation has proven “totally” unacceptable and says the body should publish “strict criteria” on acceptable levels of pay that could be linked to the likes of average staff pay and performance.

“The Office for Students should take a firmer stance on senior management remuneration and not be afraid to intervene, especially when institutions pay their Vice-Chancellor more than eight times the average staff salary,” they say.

They say vice-chancellors should never sit on their own remuneration boards and urge the OfS to enforce that principles.

“Although Nicola Dandridge is right to describe universities as autonomous, it is important to remember that universities are in receipt of both private and public money,” the committee says.

The group of MP's also highlight's the Government’s own written evidence to its inquiry, which points out that the public are “the sector’s most significant single funder” and “there is a legitimate public interest in the efficiency of these providers”, including on staff pay.

Chair of the Education Committee, Robert Halfon, said: “The blunt reality is that too many universities are not providing value for money and that students are not getting good outcomes from the degrees for which so many of them rack up debt.

“Too many institutions are neither meeting our skills needs or providing the means for the disadvantaged to climb the ladder of opportunity.

The Conservative MP added: “Too many institutions exist where Vice-Chancellors and senior management earn excessive amounts that does not represent value for either the student or the tax payer.

“Self-regulation should be out of the question and the Office for Students must enforce strict criteria on acceptable levels of pay that could be linked to average staff pay, performance and other measures."

'UNCONDITIONAL OFFERS'

Elsewhere the report recommends that universities should clamp down on a “steep increase in unconditional offers”, citing them as “detrimental” to students while “undermining” the higher education system.

It comes after Mr Halfon said the more than 17-fold rise in such offers in five years was because universities want the public subsidy from the loans when courses are filled.

“I think that's why they are making these unconditional offers and why they've increased so greatly," he said in February.

The report also calls for universities to be more transparent about graduate prospects, in light of figures which show 49% of recent graduates were working in non-graduate roles.

And it said more should be done to address the "deeply concerning" fall in both part time and mature learners and the impact on those from disadvantaged backgrounds who enter higher education.

“Universities must offer more flexible learning including credit transfer, work placements and pauses in study and move away from the ‘rigid’ traditional three-year undergraduate approach,” they say.