A few thoughts on VC Pay.

I expect Lord Adonis cracked open a bottle or two on 28 November. Not an early Christmas celebration, but because of one of his apparent goals, seeing the VC of the University of Bath, Glynis Breakwell depart from her institution, was achieved. Once HEFCE produced their report into the governance of Bath – this outcome seemed inevitable.

Lord Adonis (or the Mail and the Sun et al, or dare I add even the Office for Students) were never going to leave it there. Prof Breakwell, apparently the most highly paid of the mainstream university VCs was only target one. In the flurry of barbed attacks on Higher Education (HE) since the spring hers is not the only name and salary highlighted by Lord Adonis and others. Additionally, ‘loss of office’ payments, including to the former VC of Bath Spa University made headlines too.

Whilst Lord A would have liked him to say more, Jo Johnson has commented on the pay issue. It was no surprise to see the Office for Students framework consultation refer to it. The new regulator may not be able to direct institutions on what a fair salary is for an individual Vice Chancellor but they will be keen to pounce on any governing body who do not satisfy Sir Michael Barber, Nicola Dandridge et al that the amount is ‘appropriate’.

Attacking senior staff pay is one of the many negative strands politicians and media commentators are hurling at the sector. The subject of money touches almost everyone. VC pay is put directly in the context of tuition fees, levels of student debt, and value for money for both students and taxpayers. I suspect an element of distraction tactics is at play as the Government is under strong pressure, the economy is not doing well, and Brexit continues to drive wedges almost everywhere. Pointing the finger at ‘out of touch’ universities that are deemed to serve the world – but not local communities or UK employers – and their ‘fat cat’ sector leaders deflects tension. It has been lapped up and added to by the media.

Vice Chancellors are business leaders – academic businesses, true, but still businesses. Larger universities turn over many multi-millions of pounds a year, employ thousands of staff, educate very large numbers of student at different levels, generate research that impacts on all of us, and deliver on contracts with businesses and work in partnership with other institutions and organisations at home and overseas. Benefits to the economy can be clearly evidenced. When recruiting a leader the salary needs to be sufficient to secure the right calibre of person.

HE is one of a handful of sectors in the UK which can lay claim to be world leading. Universities are ‘anchor institutions’ in their localities but they do not simply sit in a national market – they are internationally facing and the connections they require are both local, national and international. As such, it is at the least arguable that the salary of the executive head of a world-renowned institution should be benchmarked not amongst UK competitors but international ones. Alistair Jarvis has written one of the few balanced pieces on this.

Having said all of the above, transparency in governance is essential and remuneration committees cannot be kept hidden in the depths, and there always has to be due accountability for the use of public funds (including student loan finance). Although, it should be noted that many institutions have diverse income streams not just the public ones.

Lord Adonis says he’s happy to run a university for a month. I could run a university for a month. My learning disabled son could run a university for a month. The strength of the leadership and management teams, and the operating systems and structures would see to that.. But try running one for 18 months, a year perhaps, because that’s when the chickens really come home to roost. At the same time some even within the sector, including Sir Anthony Seldon, feel that the escalation in interest on VC pay could have been prevented had there been a robust response earlier on. In his view the “sector has not reacted well. We have lost the public argument and we should have responded earlier when it first came up.”

My closing observation is that any organisation that in part (some would argue wholly) operates for the ‘public good’, and especially if a pay and/or a job’s squeeze is applied to other staff, the ability of leaders to listen is surely important. It’s not incumbent on the executive head to accept a remuneration committee recommendation for an enhanced level of pay increase / bonus payment. Indeed and as a few have demonstrated they need not accept one at all. Also for any leader in any sector a touch of humility on occasion does not, I think, go amiss.