Why Vice-Chancellor pay is not so cut and dried
The issue of pay in universities is complex and the situation is more nuanced than it might seem at face value, says Juliet Taylor
Posted by Julian Owen | November 14, 2017 | Finance, legal, HR
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Results from the Times Higher Education Survey 2017 revealed that the average remuneration for vice-chancellors rose to over £250,000. Set against the backdrop of austerity across most public services, this trend is creating public outrage. In response, Universities’ Minister Jo Johnson recently outlined measures designed to curb the spiralling pay among the leaders of UK universities.

However, the issue of pay in universities is complex and the situation is more nuanced than it might seem at face value. The vice-chancellor’s role has changed considerably and running a university is a much more complex job now than it was five or even two years ago.

Comparing apples with apples

The perception of universities being funded in the same way as traditional public services is somewhat misleading. Whilst universities receive around a quarter of their funding through the government, the vast majority of funding tends to come from a multitude of sources including income from student fees, research grants and private donors. In return universities actually make a significant contribution to the local and national economies. 

In fact, universities operate much like private organisations and run comparable balance sheets. Their funding is directly dependent on ability to attract income from students, research grants, industry, charities and alumni. This adds extra pressure to the role of a leader who must ensure that their university is seen as a prestigious, world-class institution capable of competing with the best. Developing a marketable brand is now essential to generating income and ensuring the future success of a university.

"If our institutions wish to continue delivering the best possible research and student experiences, and remain competitive at a global level, they must attract the best leaders."

Extra responsibilities

The role of a vice-chancellor has expanded and evolved beyond recognition in recent years. Whereas universities were traditionally led by individuals with strong academic backgrounds, the greater demands faced by institutions now necessitate a leader more akin to a private sector CEO.Universities have become complex, multi-faceted organisations with international reputations to maintain. Their leaders must perform a wide range of roles within that organisation from securing funding and managing tight budgets, to building international partnerships, developing a global brand and attracting the best students and staff. As such, vice-chancellors need to be dynamic and have a wide range of skills including people management, financial acumen, media savvy and an understanding of corporate strategy. On top of that, a vice-chancellor role now involves an increased political element. 

Tempting talent

In order to compete on the global stage, UK universities need to attract the best academics from around the world to produce world-class research and education, which in turn attracts the brightest students. This can only be achieved by having the right people in place to deliver exceptional standards of education and research and innovation. In an increasingly competitive international marketplace, the pressure is on to keep attracting world-leading academic talent. University leaders must be proactive to stay ahead of the pack.

Maintaining the integrity of the generally excellent university system requires being able to attract the top talent from around the world and this will only become more difficult as the repercussions of Brexit continue to unfold. Vice-chancellors now have to work harder than ever to ensure that they can make an attractive proposition to leading academics who may be tempted to look further afield than in the past.

UK universities are world-renowned institutions. If our institutions wish to continue delivering the best possible research and student experiences, and remain competitive at a global level, they must attract the best leaders. The broad set of managerial skills now required to lead a university means that institutions must make an offer that can compete with pay packets available in the private sector.

Whilst calls for a review are justified and lavish excesses must be curbed, there is no doubt that vice-chancellors perform an extremely challenging and important job that will only be complicated further by Brexit and business-critical initiatives such as the Research Excellence Framework and the Teaching Excellence Framework. 

Juliet Taylor, Partner and Head of the Education Practice at GatenbySanderson

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