Universities minister vows to crack down on vice-chancellor pay

The Universities Minister has vowed to "focus laser-like" on the issue of vice-chancellors' pay as the row over the value for money major institutions provide for students continues.

Sam Gyimah said he wants to see vice-chancellors kicked off remuneration committees to prevent them having a hand in setting their own pay.

Speaking to the Commons Education Committee on Tuesday, Mr Gyimah said: "What happened before was that vice chancellors sat on the remuneration committee and they would obviously recuse themselves when their own pay was being discussed.

"But even in FTSE 100 companies you can't sit on a remuneration panel and say I wasn't in the room so it's nothing to do with me.

Graduate median salary ages 16-64.
Graduate median salary ages 16-64.

"They should not be allowed to set their own pay and that's action on pay, the second thing is that the Office for Students (OFS) has a real focus on top pay within our universities."

The issue of vice-chancellor pay has come under intense scrutiny over the past year, with recent research revealing the average vice-chancellor salary is £268,103 in salary, bonuses and benefits - far outstripping earnings of their public sector peers.

Mr Gyimah said the OFS planned to force universities to publish the number of staff earning a basic salary of more than £100,000 as part of their audited financial statements.

Education institutions would further have to publish full details of total remuneration packages including bonuses, pension contributions and taxable benefits along with the full job title of anyone earning more than £150,000.

He added: "But it's not just transparency in terms of sharing the numbers - we want to see a justification for the total remuneration package for the head of the provider and the provider's most senior staff, so they've got to explain why that person deserves that pay package.

"If you give someone a bonus of £10,000 you should say explicitly what they delivered to get that £10,000."

Graduate median salary ages 21-30
Graduate median salary ages 21-30

He said the OFS was going to "focus laser-like on this to bring it under control".

In November, Dame Glynis Breakwell announced her resignation as vice-chancellor of the University of Bath after it emerged she earned £475,000 in salary and benefits last year.

The row over vice-chancellor pay has fuelled increasing bitterness among both university staff and students.

There have been strikes in 65 universities in recent months following bitter disputes over changes to the pension scheme, while the majority of students are now paying the top rate of tuition fees of more than £9,000 a year.

Over 1,000 students have now joined a class action lawsuit seeking compensation for the disruption - which could cost universities millions in payouts if it is successful.

Mr Gyimah said he was committed to ensuring students had all the information needed to help them decide if they were receiving value for money.

He said: "That's very much part of the OFS remit to ensure that students are getting what they pay for - there's a lot of discussion around teaching intensity and contact hours and recognising that different people learn in different ways and that university is about independent learning and it's not like being at school where you have classroom learning.

University of Bath staff warning
University of Bath staff warning

He added: "The OFS will be looking at these issues to look at the issue of value for money - however it is fair to say that people' understanding of what value they got out of the university experience can change over time - so your experience when you're out of university two years versus five years, that view will change.

"But given the considerable amounts of money that students invest in their education, we want to ensure that their university experience is delivering what it should do and that's a core part of the OFS's remit."

Data published on Tuesday revealed that in 2017, 77.8% of postgraduates and 65.5% of graduate were in high skilled employment compared to just 22.2% of non-graduates.

Graduates earned an average of £10,000 more than non-graduates, while postgraduates earned an average of £6,000 more than graduates.

Over the course of 2017, postgraduates' and graduates' salaries increased by an average of £1,000 to £39,000 and £33,000 respectively.

However, a recent OFS report found only 38% of students felt they were being given value for money.

Mr Gyimah said he wanted to see universities publishing detailed statement documents so students could see exactly where their money was being spent.