UK Vice-Chancellor pay soars to 13 times median wage

Figures released in a report by the higher education regulator, the Office for Students (OfS), have revealed that almost half of all vice-chancellors received more than £300,000 in salary, bonuses and benefits last year – with six universities in England paying their vice-chancellors £500,000 or more.

The report shows that some vice-chancellors are being paid as much as 13 times the median pay of their staff. University of Manchester President and Vice-Chancellor Nancy Rothwell earned “8.24 times the median pay of staff (£31,604)” in the 2017-18 academic year.

While the highest reported salary for anyone in the position was the £70,000 taken home by the vice-chancellor at the University of Bath, the head of the London Business School was paid almost £600,000 with benefits included. In addition to this, 62% of universities in England increased the number of staff paid over £100,00 in the 2017-18 academic year.

The university with the largest increase in vice-chancellor pay was De Montfort University in Leicester, where pay went up from £286,000 to £350,000.

In December, The Mancunion revealed that Professor Dame Nancy Rothwell’s overall pay packet fell by £37,000 to £269,000 in the 17-18 academic year, due to the fact she took less in pension contributions as cash.

The OfS introduced new rules last year stating that universities could face “significant” financial penalties for giving vice-chancellors extremely high salaries.

Some vice-chancellors refused a salary increase and a number of universities reduced the basic pay of their vice-chancellor. The chief executive of the OfS Nicola Dandridge said this was “good to see” but did acknowledged that it can be “difficult to revisit contractual obligations while a vice-chancellor is in post.”

Education Secretary Damian Hinds commented: “We set up the Office for Students to look out for students’ interests and it is absolutely right that the OfS demands greater transparency from universities by requiring them to justify the pay and benefits of their vice-chancellors.”

“Of course salaries need to be competitive – but high pay must be justified by high performance on objectives such as widening participation for disadvantaged groups, low dropout rates, growing export earnings and pioneering innovative research.”

Meanwhile, the i Newspaper has revealed that a ‘raft’ of institutions have announced plans to make staff redundancies in a bid to save cash.

Increasing budget deficits have been blamed for pushing providers into making necessary cuts to services, leaving universities running on depleted levels of resources. It was recently reported that three universities were at risk of bankruptcy, amid The OfS re-affirming that they would not bail out struggling institutions – back in January, it was confirmed that five institutions in London had failed to break even, with Kingston announcing a deficit of over £13 million.

Redundancy announcements are now becoming commonplace across the sector, as universities look to mitigate the effects of overbearing financial pressure.

The University of Cardiff has already confirmed that 350 jobs will be cut across a period of five years, following a £22.8 million deficit, while Kent has also confirmed that jobs will be lost. Likewise, Bangor University will see 60 further jobs lost, just a year after over 100 staff took voluntary redundancies to help deal with £8.5 million budget cutbacks.

Nick Hillman, director of the Higher Education Policy Institute remarked that the current crisis was a result of unprecedented financial uncertainty: “There are some universities that are thriving, but the system is facing something of a perfect storm due to the competitive market, Brexit, dip in the number of 18-year-olds and huge policy changes that have knocked them for six.”

Continued concern persists over the perceived marketisation of Higher Education, as fee-paying students see reductions in the quality of service, alongside pay rises for the highest-ranking across UK universities.

Chris Skidmore, the universities minister spoke of the threat of competition across Higher Education: “There is an expectation that in a small number of cases providers may exit the market altogether as a result of strong competition.”

With fees at an all-time high of £9,250 per year for most degree subjects, that the notion that some institutions are becoming financially unsustainable will difficult for many students to process.

One second-year student, who chose to stay anonymous, said: “It’s difficult to understand the level of difficulty that universities across the country appear to be. Obviously, it is a huge challenge to face the implications of the exit from the EU and keeping a consistently quality service amid rising student numbers, but you expect that to be maintained with the level that we pay to study on an annual basis.”

”If every student at a university is contributing £9,250 a year towards their studies, then there should be ample available to cover the costs of their degree. When there is talk of financial difficulty it is simply hard to believe considering the wages of some of the most senior figures across Higher Education in this country. How can our institutions be struggling while the majority of vice-chancellors sit on a six-figure pay packet?”

A University of Manchester spokesperson said: ”As set out in the University Financial Statements for the year ending 31 July 2018, the President and Vice-Chancellor’s total pay was £260,399 for a third consecutive year, with no bonuses.

“Any increases to this salary must be approved by the independent Remuneration Committee which reports directly to the University’s Board of Governors. The President and Vice-Chancellor is not a member of Remuneration Committee and not present at any Committee discussions relating to their salary.

“When deciding salary there is an evaluation of the President and Vice-Chancellor’s performance which includes an assessment from each member of the Board of Governors and a formal review of individual performance by the Chair of the Board.”