The Open University tops the list when it comes to high pay for vice chancellors. In 2017-18, it paid £718,000 for the services for former VC Peter Horrocks, including £255,000 ‘compensation’ for loss of office Image: Chris Valentine/Wikipedia
The newly established Office for Students has published its first statistics on senior management pay in England’s higher education sector. This has led to some strong headlines in the media.
The Guardian reported that six university vice chancellors received more than half a million pounds for the 2017-18 pay year “in salary, bonuses and benefits”. Overall, around half of all vice chancellors received £300,000 or more in that year.
So we took a closer look at the data, to get a clearer view of what can often be a confused picture when it comes to pay and other rewards for senior managers and executives.
Our first chart shows the 10 highest paying universities – or at least those reporting the highest overall remuneration.
This shows that in those 10 highest paying institutions, the amount paid out for a vice chancellor ranged between £718,000 at the Open University and £448,000 at Sheffield. For the statistically minded, that means the median pay among those 10 universities – the middle point of the pay range – is £525,000 a year. The average remuneration was £542,000.
For the sector as a whole, the average total remuneration for vice chancellors and other “heads of higher education providers” as the OfS calls them, is £301,00 a year. The median is £288,000.
One reason average remuneration is so much higher than the middle salary in the range is that £718,000 paid out by the Open University to former vice-chancellor Peter Horrocks. This included £255,000 “compensation for loss of office” – that’s not a bad golden parachute, but it does show one of the problems with figures for total remuneration.
They can mask one-off payments such as this, as well as things like salary in lieu of employers’ pension contributions if the vice chancellor has their own pension arrangements.
Similarly, the figure for the University of East London includes payments over seven months when an acting vice chancellor and an incumbent overlapped.
So what about the figures for basic pay? Let’s have a look at the 10 highest paying universities on that measure.
The highest paying is the University of Bath, whose vice-chancellor was on a salary of £470,000 in the last academic year; 10th highest paying was Oxford, which reported a salary of £360,000 for its vice chancellor – exactly the same as The Open University as it happens.
But even then, five of those 10 universities paid their vice chancellors between £62,000 and £15,000 as pay in lieu of pension contributions.
Across the sector, the average “head’s” salary for 2017-18 was £253,000 – up 3.5% from £245,000 in 2016-17. And that is lower than the medium salary of £257,000.
Which brings us to pay increases.
The chart above shows for the 10 universities who awarded the highest pay increases to vice chancellors. Clicking on the labels at the top will show you their salary in 2017-18, their salary in 2016-17 and how much of a percentage increase there was between the two years.
For comparison, the final tab shows the percentage pay increase for each university’s staff as a whole. Only at AECC University College in Bournemouth are the two percentage increases close: 9.1% for the vice chancellor, 9.2% for staff as a whole.
De Montfort University awarded its vice chancellor a 22.4% pay increase – the largest by far. Though as a footnote, the university also announced earlier this month that the vice chancellor in question, Dominic Shellard, will be leaving his job.
But some higher education institutions did cut their chief officer’s pay (see the chart below). In some cases, this coincided with a change in personnel, but in others the same person was in the job in 2017-18 as in 2016-17.
It’s not all about vice chancellors, masters, heads of school and other chief executives though. The figures from the Office for Students include other senior managers, particularly for staff paid £100,000 or more a year.
Across England, 60% of higher education institutions recorded an increase in the number of staff receiving that amount or more. Overall, there was a 15% increase in senior staff earning at least £100,000 a year.
So we’ve drawn up a chart listing the higher education institutions with 50 or more staff on at least £100,000. To provide some context, the chart also includes the total number of staff at each institution and what percentage of staff the high earners account for.
We’ve also included a column listing each institution’s reported total income for 2017-18, for some financial context.
On the other hand, comparing the OfS data with the Living Wage Foundation’s list of accredited living wage employers shows that 10 of the 50 universities we’ve looked at in these charts are also living wage employers.
- The Open University;
- University of East London;
- London Metropolitan University;
- The London School of Economics and Political Science;
- University of Bath;
- Queen Mary, University of London;
- University of Bristol;
- Anglia Ruskin University Higher Education Corporation;
- University of Oxford;
- some individual Cambridge colleges.
As UNISON head of education Jon Richards commented when the OfS data was released: “The OfS report demonstrates the inequality and injustice at the heart of higher education pay. Many staff struggle to make ends meet yet most vice chancellors are paid more than Theresa May.
“Universities must ensure all staff are properly paid for their contributions to the UK’s world-class university system.”
For most of the period covered by these figures (2016 to 2018) universities and other higher education institutions in England were overseen by the Higher Education Funding Council for England. The Office for Students became the primary regulator for the sector in England from 1 April 2018.
The OfS used data collected through an annual survey returned to the Higher Education Statistics Agency, and corresponding to data disclosed within higher education providers’ audited financial statements, usually in the staff costs note or in the statement of corporate governance.