Justify paying bosses more than PM or face fines, universities told
UNIVERSITIES will be fined if they are unable to provide justification for paying their bosses more than the Prime Minister, the Government will say today.
The universities minister Jo Johnson is due to announce the crackdown in response to a growing outcry over the lavish salaries enjoyed by many vice-chancellors.
Last year they earned an average of £277,834 including benefits, although the highest paid, Dame Glynis Breakwell, made £450,000 in her role at Bath University.
Many vice-chancellors also live in luxurious grace-and-favour homes and enjoy business-class travel – with some even having their household bills paid.
Critics say it is inappropriate for vicechancellors to be paid so generously when student fees are rising again this month from £9,000 to £9,250.
Mr Johnson has repeatedly called for an end to the ‘upwards ratchet’ of senior pay, but many universities have taken no notice.
But today he is expected to announce measures to stop remuneration boards awarding generous pay rises unless they are genuinely deserved.
A newly formed regulator, the Office for Students (OfS), will insist all universities justify any vice-chancellor pay over £150,000 – the salary of Theresa May – as part of their condition of registration. If an institution fails to do so, the OfS will take action – which may include imposing a fine.
Mr Johnson will tell the Universities UK annual conference: ‘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. Exceptional pay can only be justified by exceptional performance.’
The OfS will also issue require universities to publish details of all senior staff earning over £100,000 per year.
The crackdown comes after Oxford’s vice chancellor Louise Richardson sought to fend off criticism of her £350,000 salary by claiming it is about maintaining gender equality.
Her predecessor Andrew Hamilton had a salary of £346,000.
When challenged on Radio 4’s Today programme, she said: ‘The vice chancellor of Oxford’s salary has not changed in the past few years, and so I wouldn’t have thought the BBC would want to argue that I should be paid less than my male predecessor.’ .’
But former education minister Lord Adonis said: ‘The issue isn’t sexism but greed. The fact that her predecessor was wildly overpaid is no reason for her to be so too.’
As part of the crackdown on pay, the OfS chief executive Nicola Dandridge and chairman Sir Michael Barber have announced they will voluntarily cut their own annual salaries to set an example to the sector. Their pay packets have been reduced by 18 and 10 per cent respectively – a combined reduction of more than £65,000.
Last night Robert Halfon, Conservative chair of the education select committee, said of the announcement: ‘This is an important step forward.
‘Vice-chancellors’ pay must be fair to students and fair to the taxpayer.
‘Rises should be based on the performance of universities.’