The real questions behind Vice Chancellors’ pay

Jul 12, 2017

This morning, Lord Adonis announced on Twitter that he would be entering the ongoing Vice Chancellors’ (VC) pay debate by making a speech on the topic, tomorrow, in the House of Lords. Over the past few years, annual reports — by both the Times Higher Education magazine, and the Universities and College Union — on the extensive salaries of these executives have stoked temporary intrigue and indignation. Beyond that, however, the issue has been relatively easy to shrug off as either an annoying but unavoidable bugbear, or an overly complex ‘tip of the iceberg’ problem.

Now, following a returned focus on tuition fees during the election campaign, and subsequent debate arising about the general costs and benefits of a university education, the rate of VC pay seems neatly emblematic of the pressing questions the Higher Education (HE) sector is facing. Policy Exchange, therefore, is currently undertaking work on this topic, with a report due out in the autumn to coincide with the start of the new academic year.

To assess the value for money that Vice Chancellors offer, we must first decide what we expect from them. At the heart of such decisions must be a view of universities’ societal purpose — what they are, and what they should be. To what extent are universities public institutions, and to what extent should HE be classed as some kind of public good? To answer that involves serious consideration about the past, present, and future provision and consumption of university education.

HE in Britain is at a turning point. Over the second half of the twentieth century, the sector expanded significantly, under governments of all parties. Regardless of any recent decreases, the overall trend for increased student numbers is clear, and expense to the taxpayer remains considerable. Focuses on upping participation have been well intended: university attendance is seen as a key measure of social mobility; more children from disadvantaged backgrounds are entering HE than ever before; it is hard to counter the notion that society benefits as a whole when its citizens’ average standard of education is raised. Yet the participation drive has caused problems, not least with respect to funding.

All but five of Britain’s universities are government regulated, and partly publicly funded. Although these ‘public’ institutions are responsible for their staff (who are not public servants, as is often the case in Europe) and have their own assets, their research and teaching standards are externally regulated, as are their funding and fee-setting arrangements.

Since the 1980s, however — when the Jarratt Report painted universities as businesses, run by chief executives, providing products and services to consumers — there has been growing pressure on students to contribute to payment for their HE. Gradual rises to tuition fees have changed students’ expectations and increased their desire for control over their education, as greater expense has been transferred to them. This initially took the form of an upfront cost, but has subsequently become what is effectively an income-contingent fixed-term tax liability, allowing for university education that is ‘free at the point of delivery’.

These transfers of expense have added to underlying confusion over universities’ purpose — and our understanding of how these institutions might fit into the public-private sphere. Are universities primarily mechanisms for the country’s economic growth, or stimulators of intellectual enquiry for its own intrinsic value and the primary benefit of just those most suited to it? This is complicated by the way in which so many types of institution sit under the umbrella of ‘university’ in Britain: now, the word equates to what other countries tend to call ‘the tertiary education sector’. To what extent is this amalgamation detrimental? Would the country be better served by a more segmented sector?

Such questions come at a time when the prime minister has called for ‘responsible capitalism’ and progressive social reform — and her opponents are claiming that much more needs to be done. Such positioning is unsurprising in the face of real and perceived societal division over access to opportunity and wealth creation. And that resonates with a general obsession about transparency and accountability. That such qualities are demanded, above all else, in those who run our institutions, must lead us to ask: to what extent should universities be accountable to the public?

If the answer is that they should be accountable to a greater extent, then how could they be better regulated? And, most significantly, perhaps, what is it that we know about the people in charge of them? What might all this mean regarding funding, pay, and fees? And what might it mean regarding the sector’s obligations to society, not least in the upholding of British ideals — such as academic excellence, and the freedom of speech and expression.

Our upcoming report shall consider how well the market is ‘working’, regarding pay in the higher education sector. What are the current pay rates for Vice Chancellors, and other senior figures? In order to work out whether they are being paid a reasonable wage for what they are doing and achieving, we need to consider their current roles, and the changing variant nature of those roles. Therefore, we shall include the results of a survey we are undertaking with the aim of learning what it is that Vice Chancellors actually do, and what they think is most important within that.

It is also helpful to compare their pay with those in comparable jobs, to come to conclusions about the ideal amount they should be paid, and also a fair or comparative amount. These comparisons will involve those in the same sector abroad, and in different but similar roles here. There is also a wider economic question that comes from seeing Vice Chancellors as being at the heart of their sector, however: what does the amount they are paid mean in context? We shall compare differentials in the sector, and also with ratios in other sectors — particularly school teaching. What message does the pay rate of Vice Chancellors send, and what economic impact might it have?

Having assessed the situation, we will then be in a position to make recommendations. We will also be able to attempt to answer the big question of what our findings say about the state and future of the HE sector.


Rebecca Lowe

Rebecca Lowe
Fellow, State & Society and Judicial Power Project; Convenor of Research Group on Political Thought Read Full Bio
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