V-c pay: Are vice-chancellors worth their salaries?


The current fees regime has operated more like a cartel, without any real correlation between cost and quality

It’s a telling, if depressing, insight into just how febrile the clamour around the pay of UK university leaders has become that the old jibes are back. Specimen: What’s the difference between a university vice-chancellor and a supermarket trolley? Answer: You can get more food and drink into a vice-chancellor.

I’ve worked with several vice-chancellors, and all have been energetic, dedicated, professional people. I have no particular view about what a fair wage for them should be, except to say that it can’t just be about the external competition; it also needs to take seriously the impact on internal morale, esteem and collegiality right across an institution. That may be harder to measure, but it’s priceless.

But when it comes to the financial health of the sector, the real problem is not the pay of university leaders. Nor is it high tuition fees or escalating levels of graduate debt. These are symptoms.

The real problem is deeper: it is the failure to deliver the underlying purpose of the reforms proposed by Lord Browne’s 2010 review, which gave birth to the current fees regime. This was to bring sustainable funding and energising competition to a growing and diversifying higher education sector. Instead, the system has operated more like a cartel, without any real correlation between cost and quality.

There’s plenty of blame to go around, and the lion’s share lies with ministers’ desire to have things all ways up. By both allowing fees to rise and imposing a hard ceiling, they in effect invited universities to render stillborn the market they claimed to be trying to create. Much to their apparent surprise and discomfiture, just about everyone went for the £9,000 limit.

At the University of Oxford, where I was director of public affairs, I favoured a lower ticket price of about £8,000, principally because I thought it could help in the unending battle to encourage bright students to view Oxford as affordable and accessible. If the new regime was going to work, some market stimulus was also needed, and where better than Oxford? Perhaps predictably, the government liked the idea; most of my colleagues did not.

Some institutions have done very nicely out of the arrangements, which more than cover their related costs. Whether the surplus should be regarded as gravy that vice-chancellors are spilling down their gowns is another matter.

More worrying is the financial risk-taking the current set-up has allowed and, arguably, encouraged. Largely on the expectation that the fees will continue to roll in, some institutions have indulged in speculative infrastructure projects that they may live to regret – especially if Brexit and visa rules stem the student flow. The flawed implementation of the funding model has also greatly exacerbated the neuralgic issue of student debt. With universities charging maximum fees, the cost to the public purse of up-front student loans has skyrocketed. Speculation about how much of the total amount (increasing by nearly £15 billion a year) will ever be recouped is just that. But the rising interest rates that graduates face on their loans are real enough.

So what’s to be done? Belated government attempts to kick-start competition are less than compelling. Neither trying to peg future fee rises to unconvincing metrics about teaching quality nor opening the sector to more private providers looks like a major game-changer.

Calls for complete abolition of the current set-up have a simplistic appeal. But there’s the small matter of what would take its place. Participation in higher education has increased, and that’s positive. The principle of students making affordable contributions post-graduation is a good and now a necessary one. The idea that it can all be done out of general taxation does not withstand serious scrutiny if we want quality as well as quantity.

No, what we need is more of a market in higher education, not less. That means finally giving effect to the original intent of the reforms. Crucially, it requires less obsession with sticker price and more scrutiny of real value. This should be the regulatory focus.

Institutions should have latitude in setting the price of a course, provided certain conditions are clearly met. These include a transparent estimate of the cost of delivery, an independent assessment of the likely public benefit (to individuals and society), and a guarantee that finance is not a barrier to entry.

The state’s commitment (and the future basis of the student loan book) should be a repayable baseline contribution per undergraduate. This could be incentivised where the nation needed more engineers, say, or philosophers, or linguists. Institutions would take the lead in developing affordable student finance to guarantee needs-blind access to more expensive courses.

Yes, it would take a change of mindset and approach. But whatever the rights and wrongs of vice-chancellors’ pay, we shouldn’t go on pretending to be doing everything we can to provide a responsive, diverse higher education system that favours the student, energises the institution and benefits us all. Too often, that just isn’t true.

Author Bio: Jeremy Harris is founder of The Ruelle Consultancy and is a former director of public affairs at the University of Oxford.