Union calls for universities to use £3.4bn surplus to raise staff pay, or face strikes

Universities should use their £3.4bn surplus to give staff a pay rise to help offset the cost of living crisis – or face the prospect of strikes in the autumn, the University and College Union has warned.

Analysis of universities’ financial data by the trade union found universities had earmarked £4.6bn to spend on new buildings next year, an increase of more than a third on last year, despite giving some staff a below-inflation pay rise of 3%.

The union is calling for an RPI (which stands at 12.3%) plus 2% pay rise. Its calculations estimated that a one-year surplus from Oxford and Cambridge universities, the UK’s wealthiest institutions, could fund a 7.9% pay rise for all university staff.

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The UCU’s general secretary, Jo Grady, said: “The university sector is not only hoarding billions of pounds in cash, but also planning an eye-watering spending spree on shiny new vanity projects – all while holding down staff pay, cutting pensions and plunging thousands into hardship in a cost of living crisis. It is inconceivable and insulting.”

She argued the university sector generates its income through its staff’s work in teaching, research and administration and should “reassess its priorities”.

“Investment in staff is investment in students, and vice-chancellors need to wake up to that fact,” she said.

The union said that 145 universities will be balloted over strike action on pensions, pay and working conditions in early September. As the ballots are nationally aggregated, if more than half of the universities are in favour when they close in early October, every institution will take strike action later in the autumn, which the union said would represent “an unprecedented level of disruption”.

Universities say they need to hold on to their surpluses to weather a tough financial climate ahead, and that overall strong performance conceals variation between institution

Raj Jethwa, chief executive of the Universities and Colleges Employers Association, said: “Each institution has a legal duty to balance its books and the nationally negotiated pay uplift has to be affordable for all 145 institutions. Many higher education institutions are working hard to avoid redundancies, and others are struggling to balance budgets to maintain staffing levels, while delivering this year’s pay uplift into staff pockets.”

He argued that it was disingenuous to cite buildings as an area where universities could find savings as this “accounts for less than 10% of total spending and suffered significant cuts during the pandemic, in order to devote resources to supporting staff and students”.

He noted that, although the current pay offer proposes a minimum increase of 3% for all staff, it provides a 9% rise to the lowest paid staff, who are most affected by inflation.

The union’s research suggested that universities generated record levels of income from tuition fees and other sources, hitting £41.1bn in 2020-21, up from £39.6bn in 2019-20.

During this period, spending on staff increased by £200m, which the union argued was not enough to meet additional demand for teaching and support from increasing student enrolments, meaning that existing staff members have to work harder.

The union said staff have had low pay awards over the past decade, putting pay 25% behind inflation, and estimates that about 90,000 university staff are employed on short-term, insecure contracts.

The union argued that some universities waste money on expensive overseas campuses. In February, it was revealed that just 100 students had graduated from a New York campus of Glasgow Caledonian University since it opened in 2014, despite receiving £21.4m in loans to keep the campus open.

The university said the college had started recruiting students in 2017 and obtained degree-awarding accreditation this March, which a spokesperson said would result in “a rise in the number of students being recruited, and graduating, in the coming months and years”.

In 2019, the University of Reading dramatically reduced its presence in Malaysia after accumulating losses of more than £20m. The university said that the campus is “now in a much stronger financial position” after the restructuring.

Meanwhile, some university bosses have called for tuition fees to be raised in line with inflation to prevent an overreliance on foreign students.

Sir David Bell, vice-chancellor at the University of Sunderland and a former permanent secretary at the Department for Education, told the Sunday Times: “You cannot expect to run universities on a fee level of £9,250 a year, which by 2025 will be worth around £6,000 in real terms because of inflation.

“If you want to keep running universities even at the level we have now, you have to increase the tuition fee at some point.”

Foreign students currently pay £24,000 a year, while the £9,250 tuition fee would now be £12,000 a year if it had kept up pace with inflation.