University bosses ‘in wrong business’
EDUCATION: If university bosses want the wages of footballers and bankers they are “simply in the wrong business”, Universities Minister Jo Johnson warned as he announced institutions could be hit with fines.
IF UNIVERSITY bosses want the wages of footballers and bankers they are “simply in the wrong business”, a Government Minister has warned.
Universities Minister Jo Johnson launched a fresh attack on spiralling pay as he announced that institutions could be hit with fines if they cannot justify paying their bosses more than the Prime Minister.
In thinly-veiled comments directed partly at Oxford University vice-chancellor Professor Louise Richardson, who earlier this week acknowledged she was highly paid compared to academics but suggested she was not compared to other professions, Mr Johnson said that while universities operate in a competitive market, they still receive government funding.
He told the Universities UK conference at Brunel University: “It is of course true that many of our universities are large and complex organisations, requiring highly skilled individuals to run them effectively.
“Some will be competing for managerial talent in a global market.
“But it is important to remember that universities are generally still charities with a not-for-profit public service mission and that, when it comes to vice-chancellor remuneration, finding the right benchmarks is essential.
“I have heard in recent days one prominent vice-chancellor noting she was paid less than footballers or bankers. If university managers want those kinds of wages, they are simply in the wrong business.”
He added: “While universities do operate in a competitive market, they are unlike most businesses in their dependence on Government for funding.
“No FTSE-350 business enjoys the certainty that the higher education system benefits from in knowing that it has an uncapped flow of new customers coming to it each and every year, bearing £9,000 vouchers from the Government. So that’s why, although universities rightly enjoy autonomy, Government has a legitimate interest in questions around institutional efficiency, both in our role as stewards of the higher education system and as its most significant single funder.”
Earlier this week, Professor Richardson said it was dishonest to suggest that university bosses had used £9,000 tuition fees to boost their own pay packets. Speaking at the Times Higher Education’s World Academic Summit in London, she said: “I think it’s completely mendacious by politicians to suggest that vice-chancellors have used the £9,000 fee to enhance their own salaries.
“We know that the £9,000 fees were a substitute for the withdrawal of government funding. My own salary is £350,000. That’s a very high salary compared to our academics who I think are, junior academics especially, very lowly paid.
“Compared to a footballer, it looks very different, compared to a banker it looks very different.”
Mr Johnson outlined plans to instruct the new regulator, the Office for Students (OfS), to take steps which would be designed to curb pay hikes, including insisting that universities justify any pay over £150,000 – the current salary of Prime Minister Theresa May.
Institutions that fail to do so could face action by the OfS, which will be able use its powers to impose penalties, such as fines.
Universities will also have to publish details of all senior staff earning more than £100,000 a year, and there will be new guidance, covering issues such as the role and independence of university pay committees – who usually decide on leadership salaries.
Universities are still charities with a notfor-profit mission. Jo Johnson, Universities Minister