In Defence of Liberty

Driven by data; ridden with liberty.

On the Vice-Chancellor’s Pay

It’s that time of year again. Much like Christmas Carols, the inevitable drone about the Vice-Chancellor’s pay barely changes. A group called ‘Bath Students Support Our Staff’ stated on social media that: “Our VC was struggling to get by on £356k per year so the [University of Bath] just announced a £27k pay rise. No money for staff though”. Open letters to the Students’ Union say tuition fees are “lining the pockets” of the University of Bath’s “increasingly greedy” senior management.

Strikes have divided the University of Bath's student body. (Photo: Unite the Resistance)

Strikes have divided the University of Bath’s student body. (Photo: Unite the Resistance)

According to their 2012 accounts, the university spent £185.7m annually, with £104.1m expended on staff costs, which include wages, National Insurance and pension contributions. That year’s income was £196.6m, where £70.7m came from tuition fees and education contracts. Increased money from tuition fees was completely counterbalanced by HEFCE grant reductions. The 2012 operating surplus was just under £11m, diminished by £6.5m from its 2011 figure. Despite the UCU’s complaints, surpluses serve as an insurance against an uncertain future. Furthermore, these collated funds can be augmented with loans to finance larger projects, like the £5m student centre.

In their recent strikes, the three staff union’s principal concern is that pay has stumbled behind inflation. From 2002 to 2012, overall staff costs swelled – in real terms – by about 25%. If the university were to have kept staff remuneration in lockstep with RPI-inflation from 2008, whilst maintaining current employee numbers, wages and salaries alone would surge upwards by at least £12m, eclipsing the 2012 surplus.

The Vice-Chancellor’s emoluments – her salary with benefits-in-kind – have reached £383,000. These increases have largely been off-set by cuts to the Vice-Chancellor’s pension scheme. Even if our Vice-Chancellor were to be paid nothing, and her emoluments were shared equally with the university’s employees – of whom there are over 2,500 – then each person would receive less than £110. This money would satiate few complaints raised about low pay amongst university staff.

Managerial Guidance

Instead of castigating the senior management as “greedy” for accepting these salaries, it should be considered why such salaries are offered in the first place. Fundamentally, this is a knowledge problem. People are usually unaware of what management does, concluding managers add nothing. It is difficult for outside observers to calculate what managerial guidance is worth. For example, Warren Buffet once sat on the board of the company that publishes the Washington Post, whose director said: “Mr Buffet’s recommendations to management have been worth – no question – billions.” We don’t have enough specific information to deride the Vice-Chancellor’s emoluments as unfair. Our university is clearly succeeding, especially as higher education becomes more globalised in competition and collaboration.

Inconsistently, the open letter contrasts the Vice-Chancellor’s pay to other Vice-Chancellors in Britain, but compares lecturer pay to that of industrial employees, rather than other academics. According to the Times Higher Education, the average staff cost of full-time academics at the University of Bath is £47,808, broadly similar to the UK average of £47,609. Despite insinuations of cronyism, no-one decides their pay-packet: the university’s Remuneration Committee sets all senior officers’ pay. The members of this committee are the Vice-Chancellor, the Council’s Chair, the Treasurer and two other members elected from the university’s Council. The Vice-Chancellor ceases to sit on this committee when it assesses her salary.

There are some admirable and viable campaigns to ameliorate low pay amongst university staff, possibly funded by eroding the surplus. However, this is not a limitless well, and there will remain many difficult trade-offs to be made between pay standards and staff numbers, as well as hard choices over new buildings and academic facilities. Sniping about the Vice-Chancellor’s salary spoils these campaigns and is just cheap.

Advertisements

14 comments on “On the Vice-Chancellor’s Pay

  1. phaseboundary
    January 22, 2014

    I think I can see another way out. If a) university staff numbers have increased [which I believe they have, but you’re the man with the figures to hand] and b) the university cannot afford to keep wages up with real-world inflation, then it’s pretty evident that the university is employing more people than it can afford. Eroding the surplus need not be a short-sighted measure if accompanied by a freeze in the number of staff until the number we have becomes affordable on a decent wage.

    • Anthony Masters
      January 22, 2014

      Naturally, the University of Bath published their 2012-13 accounts not long after I wrote this article.
      http://www.bath.ac.uk/finance/statements/accounts-2012-13.pdf

      It states that, relative to 2011-12: “The average number of staff employed increased by 3.3% to 2,443.” It is plausible that there has been a general increase in staff numbers, but I can’t recall if all the previous versions have FTE staff numbers.

      What you have suggested is another possible trade-off: increasing the pay of staff but restraining staff numbers. Students should wonder whether they want the ratio of staff to students to rise in the long-term. However, I do think this possible trade-off (as well as most of the other trade-offs) have been largely ignored from this debate thus far.

  2. Michael Carley
    February 7, 2014

    An honest assessment of the 25% rise in the pay bill between 2002 and 2012 would have noted the 39% rise in student numbers in that time (from 11128 to 15449).

    • Anthony Masters
      February 8, 2014

      Your insinuation that I am being dishonest is unfounded. The university’s growth is well-known, and the article’s consideration was from the perspective of the university’s income and expenditures.
      Moreover, a 39% increase in student numbers would not necessarily imply a 39% increase in staff costs.

      • Michael Carley
        February 8, 2014

        You don’t give a figure for the change in the university’s income from between 2002 and 2012, only for the change in expenditure. A 39% increase in student numbers should imply a corresponding increase in staff costs, unless such measures as staff-student ratio, or staff time per student, are to worsen.

      • Anthony Masters
        February 8, 2014

        That paragraph was about pay, giving an indication about the trend of overall staff costs.

        It is tautological that, if the staff-student ratio is maintained, the increase in student numbers should imply a corresponding increase in staff members. However, there are economies of scale. For example, improving administrative efficiency can mean the university does not need to employ a corresponding proportion of new administrators.

      • Michael Carley
        February 8, 2014

        The number of administrative staff, and the administrative burden on academics, have increased over the last decade, for example to deal with enforcing immigration rules, so the `economy of scale’ argument does not work.

        As for income and expenditure, would you care to supply figures for university core income in 2002, and 2012?

      • Anthony Masters
        February 8, 2014

        I claimed that the university may not need to “employ a corresponding number”. It irrevocably remains the case that organisations can, and do, provide greater amounts of the same service without corresponding increases in staff numbers. Efficiency matters.

        Given I have linked the two accounts in the article, your request is somewhat surprising. I am not sure what you mean by “core income”, but the university’s total nominal income was £101.25m in 2002 and £196.6m in 2012.

      • Michael Carley
        February 8, 2014

        On your figures, then, the university’s incomes increased by 40% in real terms over the period in question. I asked for the figures because you claimed to have discussed `income and expenditure’, so I assumed you had actually considered income.

        `Core income’ is income less exceptional, or very variable, items. For example, you would not normally consider research grants, and the corresponding research staff, in figures, because both the income and the costs are tied to a project. If the project, so does the funding, but so also do the costs associate with it.

        `Economy of scale’ is a red herring in education, because it corresponds to less staff time per student, i.e. worse education, unless hours increase without pay increase.

      • Anthony Masters
        February 8, 2014

        I had considered the income, which is why I discussed the university’s 2012 income at the beginning of the article. Again, that was a paragraph about pay.

        Universities are an economy of scale. Less staff time per student does not necessarily translate into worse education. Even if we assume the only staff under consideration are academics, my tutor training highlighted what mattered was the outcome — the education of my tutees — and not my input — the hours I worked.

        In my mathematics course, there would be a highly varied amount of students coming to each lecture. The education of each attending student would be almost identical, since we all received the same lecture, but the student:staff ratio was dramatically different.

      • Michael Carley
        February 8, 2014

        You did not consider the change in income from 2002 to 2012, so you made the 25% increase in staff cost in that period look large, when clearly it is smaller than the rise in both student numbers and university income, on your own figures.

        Universities are not an economy of scale. If they were Oxford and Cambridge, with their intensive tutorial systems would give an education no better than Poppleton’s.

        Considering other staffing costs: an increase in student numbers means an increase in accommodation and class space to be cleaned, an increase in laboratory time, an increase in project supervision, an increase in student support, and an increase in the administrative time for student examination and coursework. On your own figures, there has not been an increase in the staffing input to match the increase in demand for services.

        As for the claim that only the `result’ matters, that is what happens in a culture where the only measure of success is a crude, and probably spurious, numerical metric.

      • Anthony Masters
        February 8, 2014

        I reject the charge that I made the increase “look large”. If this was my intention, would I have not stated that figure in nominal terms? I apologise that your reading of my article gave you that impression, but it was not my intention. The sole purpose of my article was to try to illuminate the vast considerations and trade-offs a university of this size necessitates, and to urge people to not cheaply use the Vice-Chancellor’s pay in the consequent discussions. The real discussion is so much bigger than that.

        You keep stating “on your [own] figures”, when these figures have all been supplied by the University of Bath. I think you may have misunderstood my comment about universities being “an economy of scale”. It is simply recognising that universities do not teach their courses on a one-to-one basis, and give lectures to hundreds of students simultaneously. It also shows there is not an inexorable connection between the student:staff ratio and the education of the students. I would suggest that there are other factors at work in the difference between Oxford and Cambridge, and Poppleton’s.

        I’ve actually worked at the university as a cleaner, in one of the construction areas. There is not a huge difference between cleaning up after 9 sets of dirty boots and 10 sets. Marginal increases in service demand do not necessarily require a corresponding increase in either employment or payment. There are some processes for which this does not hold, but most processes can increase in efficiency terms.

        Lastly, education is an outcome, not an input. There are undoubtedly other considerations for a university, or any employer, such as staff workload and happiness.

  3. Michael Carley
    February 8, 2014

    You did make the increase `look large’: you stated the increase in staff cost without giving some reference to compare it to, e.g. student numbers, or university income. The reason the V-C’s pay is an issue is that it has increased out of all proportion to staff pay generally, and to any other measure of performance you can propose.

    The reason I say `your own figures’ is that you are being given the opportunity to supply the data rather than relying on something I might put forward.

    Finally, education is not an `outcome’, it is a process which takes place in a particular culture and community, not a response to some set of inputs. As for other considerations, such as staff workload and happiness, one has increased and the other declined in the last decade.

    • Anthony Masters
      February 8, 2014

      As I said, that was not intention. This is the first time I have heard this criticism of my article. That paragraph was a statement of the current trend, followed by a counter-factual. My article includes links for factual statements, so that readers can verify them. However, I will note this criticism for any further articles I write.

Comments are closed.

Information

This entry was posted on December 13, 2013 by in Student Politics and tagged , , .
%d bloggers like this: