University vice-chancellors are standing defiant as the largest lecturers’ union prepares to stage the largest strikes the sector has ever seen.
In a press conference days before the walkouts begin, university representatives described their dismay and disappointment at the decision by the University and College Union (UCU) to take 14 days of strikes from Thursday 20 February to Friday 13 March.
The sector and the union appear, despite months of talks, to have found themselves in an intractable position. One vice-chancellor described the strikes as “disappointing”, while another said university chiefs were united behind their “fair” offer on pensions and pay.
The UCU responded: “The blame for the disruption to students’ education lays squarely at the door of vice-chancellors”, adding “students were being held to ransom by vice-chancellors who were not even prepared to discuss the issues at the heart of the two disputes.”
University staff are not going to be lectured on austerity or the necessity to hold down pay, worsen conditions and increase pension contributions from out of touch vice-chancellors
– Jo Grady, UCU
The sector was last hit by industrial action in November and December 2019, when UCU members at 60 universities walked out for eight days. Crisis talks which followed those walkouts fell apart on 11 February when the union announced that members at 14 further institutions had voted to join the university strikes. The sector is now braced for four weeks of turmoil, as strikers at 74 HEIs take to picket lines. The union estimates that 1.2m students will be affected.
The industrial discontent centres on two separate disputes; the first on matters of pay, inequality, casualisation and workloads, and the second on contributions to one of the sector’s pension schemes, the Universities Superannuation Scheme (USS). Forty-seven universities are caught up in both disputes, 22 in the row on pay and conditions and five in the struggle over USS.
Despite discussions between employers and UCU earlier this year, the sector is now hours away from strikes.
Pay and conditions
The Universities and Colleges Employers Association (UCEA) acts for 147 university employers in the negotiations on pay and conditions with the union; its chair, Prof Mark Smith, spoke at the press conference. Prof Smith, who is also vice-chancellor of the University of Southampton, told reporters: “We think there was substantial movement on the employer side, particularly because we’ve gone much, much further than the employers as a collective have ever allowed us to go before around casualisation, gender pay and workload.
“The fact that they were rejected as insufficient by the Higher Education Committee (a board within UCU) without taking any input from the root and branch UCU members means we’ve got no idea about whether those gains were valuable or not.”
I wouldn’t want to be as alarmist as to say some would go under, however, you can join the dots up and see where the logical conclusion is
– Prof Mark Smith, University of Southampton
Prof Smith said many universities “were at the edge of the comfort zone” and could not afford to improve their offer. Asked if some providers would be at risk of bankruptcy as a result of the union’s demands, Prof Smith responded: “I wouldn’t want to be as alarmist as to say some would go under, however, you can join the dots up and see where the logical conclusion is.”
He added: “The value we place on our staff is reflected in the fact that institutions pay beyond half of their overall income on pay and additional costs for staff. That shows the value we place on them. Therefore, if your major cost is inflating further, the logical conclusion is those institutions which are under financial pressure will be under increasing financial pressure.”
An increasing number of institutions reported deficits this year, Prof Smith added.
Analysis of data from the Higher Education Statistics Agency (Hesa) revealed that 32 universities were operating deficits in 2017/18, a figure which represents nearly one in four providers. The number in deficit is still below levels reported in 2006/7 and 2008/9 and 14 of those providers reported deficits of less than 2% of their total income.
The Southampton University chief said the average 1.8% pay rise on offer was “a progressive position” because it is above the national inflation rate of 1.4%.
“We went back to all our members and asked them about the position we were proposing to put to the union. At no point have the union gone back to their members, and in a similar way, sought a view from them,” Prof Smith added.
Prof Alistair Fitt, vice-chancellor of Oxford Brookes University and a member of the Employers Pensions Forum (EPF), said the present situation was “unsettling, difficult for students, and could have been avoided”.
The EPF consist of vice-chancellors, finance and HR directors, registrars and chairs of governing bodies for high-level talks on the future direction of sector pension plans.
Prof Fitt suggested the conflict over USS had become unresolvable: “In order to protect the levels of payments and benefits of the scheme, which is a red line for the union, something has to change. Costs are going up, the scheme needs more money, and under pensions law the previous contribution levels must increase to keep the same level of benefits.
“Employers are paying 65% of the increased costs required to maintain the current levels of benefits.”
In total, he said the sector was pledging an extra £250m to shore up USS coffers. He said that 84% of university employers supported the current position and believe it is a fair conclusion to the 2018 pension valuation. UUK consulted its members last week on whether they could change their offer to the union, but declined to do so.
Up until February 11, the pension scheme’s Joint Expert Panel (JEP) had hosted tripartite talks between representatives from UUK, UCU and USS. Statements on the JEP’s website confirmed talks had “continued in a positive spirit, with UCU, UUK and USS each engaging actively in the process” but added “future meetings would consider how to rebuild trust and confidence” between the warring sides.
In the most recent online statement from chair Joanne Segars, the tripartite group had made yet to make progress on a definition of sustainability for the pension scheme on how future valuations might proceed. That lack of progress may be influencing the UCU’s decision to strike.
In an interview with University Business last year, UCU general secretary Jo Grady said this season of strike action was vital because of upcoming valuations: “If we want to influence the 2020 evaluation, which we do, because of the problems we’ve had with evaluation in previous years, now is the time to do it.”
During that interview in November, Ms Grady said speculation of increased contributions and suggestions the defined-benefit scheme might be changed to a collective defined pension (CDC) scheme are “further reasons to ballot now”.
Prof Fitt said universities could not shoulder a greater share of the increased cost of the scheme because it would have far-ranging impacts, including funding being diverted from teaching and research, fewer support facilities and bigger class sizes.
The pension scheme does not just include large employers, like its university members, but also small research institutes and charities that would be “overwhelmed” if they were forced to make higher contributions, the Oxford Brookes chief said, adding: “We’re at stalemate.”
Not taking lectures on austerity
UCU general secretary Jo Grady said today vice-chancellors’ “failings are clear for all to see”.
“It is incredible they can accuse the union of acting in bad faith when they refuse to talk about the pay issue and have spent a whole week failing to come up with an offer on pensions. Worryingly, it looks like the hardline vice-chancellors who wish to prolong this dispute are still pulling the strings at UCAE and UUK.
“University staff are not going to be lectured on austerity or the necessity to hold down pay, worsen conditions and increase pension contributions from out of touch vice-chancellors whose own record on pay and perks has shamed the higher education sector.
“Although vice-chancellors are refusing to budge, UCU remains ready to discuss all elements of the disputes and to work towards a resolution,” Ms Grady added.
What does the future hold?
A UCEA spokesperson said there was now “added concern” that its ongoing consultation with universities participation in the coming 2020/21 pay negotiations would be affected.
“UCU’s planned disruptive actions may also damage the ability to conduct the national multi-employer pay negotiations in JNCHES for pay uplifts from 1 August 2020,” the spokesperson added.
The conflict over pensions is further complicated by a statutory deadline, which imposes a limit of June 2021 for the next set of USS valuations. Tripartite talks need a breakthrough to ensure the scheme can complete its valuations in time for that crucial time limit.
De-risking the scheme is being considered by the tripartite talks, Stuart McLean from UUK confirmed. Mr McLean, who is head of pensions at the association, said the USS scheme was on a “de-risking glide path”.
“The challenge there is, of course, dealing with any potential downside scenarios. USS are predominantly looking after protecting accrued members rights, as they need to under pensions laws and the Pensions Regulator, so we need to be confident that whilst we might think that growth assets is a good place to be, if that happens to go wrong – even if the probability is low – we need to be able to mitigate that and make sure benefits and pension promises are still made,” Mr McLean continued.
Pension de-risking is supported by the Pensions Regulator, who say it can help manage risk and improve member security. There are two options for de-risking a scheme; buy-ins and buyouts. A buy-in scenario is the most likely option under consideration. In that case, responsibility for paying the pension of a member who lives longer than expected falls to an insurer or a bank, not the employer. This operates like an insurance scheme.
Students call for refunds
A change.org petition launched by a student in Manchester has accrued more than 15,000 signatures since it launched. The petition is calling on universities to “sufficiently reimburse students for any contact hours that they miss due to strike action”.
Prof Smith called on students, some of whom have joined lecturers on picket lines, “to look very carefully at the amount of their fee that is going into sorting out this dispute”.
“We would ask students to think about what the exact position is. We offered an average pay rise of 1.8% – with some staff at the lower end of the pay scale getting 3.65% – combined with the increase in the employers’ contributions to USS, with them taking those increases in a two to one ratio roughly. If you look at what we put on the table, they were real genuine offers for progress,” the Southampton vice-chancellor added.
While vice-chancellors maintain they would prefer to avoid university strikes, Prof Fitt cast doubt on their impact on students. According to figures collated by vice-chancellors, only one in three university staff members walked out, and providers reported there being “low or no impact on teaching”, he concluded.
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