Advertisement

Minister vows to focus 'laser-like' on vice-chancellor pay

Sam Gyimah was giving evidence before the education select committee amid mounting concerns about inflated salaries of vice-chancellors.
Sam Gyimah was giving evidence before the education select committee amid mounting concerns about inflated salaries. Photograph: Ken McKay/ITV/REX/Shutterstock

The universities minister, Sam Gyimah, has pledged to focus “laser-like” on the issue of vice-chancellor pay during questioning from MPs.

He was giving evidence to the education select committee as part of its inquiry into value for money in higher education amid mounting concern about the inflated salaries of university leaders and the growing debts burden on graduates.

Gyimah told MPs that steps were being taken to remove university leaders from remuneration committees to prevent them setting their own pay.

“What happened before was that vice-chancellors sat on the remuneration committee and they would obviously recuse themselves when their own pay was being discussed,” he said.

“But even in FTSE 100 companies you can’t sit on a remuneration panel and say: ‘I wasn’t in the room so it’s nothing to do with me.’ They should not be allowed to set their own pay – and that’s action on pay.”

The issue of vice-chancellor pay has been a source of growing irritation for the government, which has been accused of not doing enough to cap excessive salaries by many commentators including Labour’s former education minister Andrew Adonis. Last November, Dame Glynis Breakwell announced her resignation as vice-chancellor of the University of Bath after it emerged she earned £475,000 in salary and benefits last year.

Gyimah told the committee on Tuesday: “I’m not going to defend vice-chancellor pay. What I have said is that personally I’m intensely relaxed about vice-chancellors earning more than I do as the universities minister. I understand that.

“They run large complex organisations and we need people who are capable of doing that. But they are also public institutions. They are in receipt of tax payers’ funds and they should be mindful of that.”

Guardian research shows that vice-chancellor pay far outstrips that of their peers in senior leadership roles in the public sector, including NHS hospital trusts and local authorities.

The £185,000 pay of the chief executive of Birmingham city council – the largest local authority in Europe, with gross annual expenditure of £3bn – was found to be less than half that of the University of Birmingham’s vice-chancellor, Sir David Eastwood, on £378,000.

The minister told the committee the newly established Office for Students had “a real focus” on top pay. He added that universities would in future be required to publish the number of staff earning a basic salary of more than £100,000 as part of their audited financial statements, with details of bonuses, pension contributions and taxable benefits of anyone earning more than £150,000.

“It’s not just transparency in terms of sharing the numbers, we want to see a justification for the total remuneration package for the head of the provider and the provider’s most senior staff, so they’ve got to explain why that person deserves that pay package.”

The committee, including its Conservative chair, Robert Halfon, pressed the minister on continuing deep-seated inequalities in the sector and low graduate salaries.

Gyimah acknowledged there were problems within the system and that these were being looked at in the government’s post-18 review. But he defended the continuing value of a degree and claimed that new figures for graduate salaries show “the graduate premium is still strong and still holds”.

He told MPs that Department for Education statistics published on Tuesday showed that graduate salaries were holding up, increasing by £1,000 to £33,000 over the course of last year.

He also revealed that 65.5% of graduates were in high-skilled employment in 2017 compared with 22.2% of non-graduates, and that graduates earned an average of £10,000 more than non-graduates, while postgraduates earned an average of £6,000 more than graduates.