Time for university fat cats to sup from the “efficiency” bowl

Zain Sardar of the Young Greens looks at the scandal of fat cat university Vice Chancellors.

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By Zain Sardar, Young Green student support officer

Will Hutton published his fair pay report (pdf), commissioned by the government, in March 2011.

Greedy-fat-catLooking into the extent of wage differentials between the highest and lowest paid in the public sector, Hutton recommended there should be a maximum 20:1 ratio in the sector.

The recommendation did not intend to be a panacea to the problems of inequality that blight the sector, but a crucial step in ensuring the much vaster inequalities that characterise the private sector did not slowly creep into the public sector.

The recommendation was routinely dismissed by the government.

The report itself shows quite clearly that by and large the public sector already operates at less than 20:1. In fact, most of the sector is closer to 10:1.

However, one of the most striking things about the graph in the report that charts the average pay differential in different parts of the sector is that only one sector goes dramatically above 10:1- and that is the Higher Education (HE) Sector.

As Chart E shows, at an average 15:1, the HE sector has the highest level of inequality in the public sector.

Chart E:

Public-sector-pay-ratios
The reasons for this have been particularly saliently articulated by the High Pay Commission. There can be no doubt that over last few decades the pernicious and pervasive mentality of the private sector has leaked into the public sector.

While the inequalities in the private sector, as eluded to earlier, dwarfs the public sector, the hunger for excessive pay at the top has been well and truly unleashed. Vice Chancellors and senior management on university campuses are an exemplar of this corrosive attitude to high pay.

 


See also:

Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality 22 Nov 2011

Private sector pay must also be made transparent 15 Mar 2011

It’s time pay inequality became a priority 16 Feb 2011

We cannot address public sector pay without addressing private sector pay 15 Jan 2011

A ratio cap of 20:1 won’t make pay fairer 13 Dec 2010


 

Highly paid senior management positions are unaccountable (like CEOs of banks and corporations) and enjoy little threat of being made redundant unlike ordinary workers.

Secondly, cutting the pay of senior staff is seen as an admission of failure or incompetency on behalf of the institution; conversely, there tends to be an arms race with high salaries seen as a source of credibility – like universities all charging £9,000 as a hallmark of quality – despite the reality of the actual situation.

The arms race in the private sector has been replicated in the public sector under the excuse the public must compete with the private when it comes of senior managerial talent. These arms races are endemic in the private sector and demonstrate the failure of the free market when it comes to high pay, and has been, to some extent, mirrored in the public sector.

It is exactly as a rejection of the opprobrious nature of how the private sector works with regards to pay in large companies and banks that we should take issue with inequalities in the HE sector. VC pay has been increasing over the last decade – average now around £200,000 – while low paid workers still do not earn a Living Wage.

The HE sector is, and should be, a community, and it is community values that need to be expressed through how we remunerate workers throughout the sector.

The campaign for Fair Pay on Campus offers a radical solution to the inequities of the HE sector that no high pay manager should be paid more than 10 times that of the lowest paid worker. This drags the HE sector in line with the rest of the public sector as we look to an incremental lessening of inequalities.

 


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19 Responses to “Time for university fat cats to sup from the “efficiency” bowl”

  1. David Dixon

    The Young Greens have launched their Fair Pay on Campus campaign http://t.co/FslyTRUk

  2. Izaak Wilson

    New #fairpaycampus campaign launched by @YoungGreenParty – HE has highest ratios in public sector http://t.co/0rkHFMhW

  3. Adam Langleben

    @adamlangleben Meanwhile, pay ratios in HE far higher than public sector: http://t.co/GDptDJk5

  4. Michael Edwards

    The Young Greens have launched their Fair Pay on Campus campaign http://t.co/FslyTRUk

  5. Owen Williams

    Time for university fat cats to sup from the “efficiency” bowl, writes @ZainSardar: http://t.co/PHUBJHEH #10to1campus

  6. cim

    It seems rather odd to count universities in with the public sector, to me.
    – on paper, they’re charitable non-profits rather than branches of government
    – university employees do not receive public sector pensions
    – university funding is from a variety of sources, not just the government
    – university management is independent of government

    Yes, they have decent pensions, low executive pay compared with the rest of the private sector, and generally have more concern for employee welfare and stronger unionisation of the workforce than most private sector employers … but that doesn’t actually make them public sector.

  7. Richard Woodward

    The destination for increased fees? 'Time for university fat cats to sup from the “efficiency” bowl http://t.co/Vev0uyc6

  8. Blarg1987

    The vast majority of University funding, comes from the state, so it is fair they be held to the same account as should any organisation who’s primary source of income comes from the public sector, it is a litttle bit hippercritical for some elements of the media to have a go at individuals who set themselves up as self employed working for the state yet not having a go at companies that have large profits at the expense of the tax payer.

    It should either be everyone or no one.

  9. Anonymous

    “like universities all charging £9,000 as a hallmark of quality”

    ????

    University courses, on average, cost something like 7k to run. The economics mean that, since over 6k you need to dedicate amounts to various funding, that if you go over 6k then the best economic situation is straight to 9k.

    There has been no runaway increase in the multiple as there has been in the public sector, and Univerities are huge businesses which are facing increasingly harsh conditions – forcing much of their top talent out is going to lead to many more closures.

    Moreover, Universities are NOT state-run institutions. You’re legislating in the private sector.

  10. Anonymous

    To a rapidly-falling degree – student loans are replacing direct funding, and other funding (like research) is plummeting. There is some interaction on a purely commercial basis.

    Unless you want to insist that every company doing business with the state has to follow those rules. Good luck getting major companies to do business with it!

    All this will do is further devastate the University sector, when the pay multiple is broadly stable, unlike the banks and corporate CEO’s pay.

  11. Birchington

    Frm earlier: Time for university fat cats to sup from the “efficiency” bowl, writes @ZainSardar: http://t.co/PHUBJHEH #10to1campus

  12. Tristram Wyatt

    Frm earlier: Time for university fat cats to sup from the “efficiency” bowl, writes @ZainSardar: http://t.co/PHUBJHEH #10to1campus

  13. BevR

    RT @leftfootfwd: Time for university fat cats to sup from the “efficiency” bowl http://t.co/7zdpJ4T7

  14. Boff

    After childcare and travel costs, I earn nothing going to work, and I am at the top of the lecturer pay scale. Nice to think it’s effectively subsidising a worthy cause like a Vice Chancellor. What an excellent use of my time and talents. Note to self: Be a bloke in my next life, and a clubbable one at that.

  15. Blarg1987

    You can do it in key sectos such as rail franchises etc as part of the agreement for a rail or bus contract pay scales must be shown, as these are heavily subsidised by tax payers, and if they refuse just do it in house, as I think companies wouldd rather make some momey then no money at all, I agree we can;t do it with everything but key areas, we could and progressively over time, it could spread.

  16. Anonymous

    “I think companies wouldd rather make some momey then no money at all”

    Large companies? They’ll just go abroad.

    There’s a VAST difference between 100:1 and 15:1. And trying to force in-house cleaners and the like /really/ isn’t a good idea.

    (Also, I don’t support a private trains sector, we shouldn’t be renewing the TOC’s contracts and re-nationalising it that way)

  17. Chris Baker

    Whilst ever Uni's and FE Colleges are models of inefficiency this is quite appalling – funded from our tuition fees. http://t.co/GlJL5WpI

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