University leaders are to be required to provide full details of their pay package and justification for it under new rules aimed at increasing transparency and addressing disquiet about excessive vice-chancellor pay.
The new universities’ regulator, the Office for Students, plans to publish full details of VCs’ pay in an annual report starting next year, including basic salary, performance-related pay, pension contributions and other taxable and non-taxable benefits.
The OfS also wants to look at the ratio between the head of institution’s pay and that of all other staff, as well as the number of senior staff paid more than £100,000.
The new requirement to provide justification for a VC’s salary must include a “detailed” explanation of the value they have delivered to the institution and the process by which their performance was judged.
The University and College Union (UCU), which represents higher education staff, criticised the new measures as inadequate, saying they failed to address the shortcomings of the university remuneration committees which set VC pay and still lack accountability.
Sally Hunt, the UCU general secretary, said: “Whilst a focus from the OfS on vice-chancellor pay is welcome, much of the information being called for is already available in universities’ accounts or through freedom of information requests. If university leaders are to be held genuinely accountable to students, staff and taxpayers alike, we need proper student and staff representation on the committees which set their pay.”
The issue of soaring VC pay has become increasingly controversial, with widespread discomfort among politicians at the spectacle of students weighed down with debt as VCs pay themselves exorbitant salaries.
The universities minister Sam Gyimah and his predecessor Jo Johnson have made no secret of their impatience with excessive VC pay, but concerns remain about whether the OfS has sufficient powers to rein in universities.
The OfS conceded that decisions about senior pay were up to individual universities: “The OfS has no powers to set pay for providers. But the OfS can and will intervene if there is evidence that a provider’s poor management and governance is leading to a lack of transparency about the setting of senior pay, or where the pay is not justified.”
Where required, the OfS says it can impose fines and can suspend a provider from its register, which would inhibit access to public funding and student access to tuition fee and maintenance loans.
Nicola Dandridge, the OfS chief executive, said: “The OfS is today setting out our increased expectations around senior pay. Higher education providers will have to give us full details of the total pay package of their vice chancellor. In addition, they will have to provide detailed justification of this package.
“These disclosures will become part of our regulatory requirements. If a provider fails to comply with these requirements or fails to provide justification this may amount to a breach of our regulatory conditions, and we will not hesitate to intervene.”