English higher education regulatory body the Office for Students (OFS) has published new requirements obliging universities to submit details of their vice-chancellors’ total remuneration package, to be published in an annual report.
The new requirements were published on 18 June 2018 as part of the OFS’ accounts direction, which provides guidance to universities on preparing annual financial statements. To comply with these requirements, a university will need to supply information on its head of institution’s total remuneration package, including basic salary, performance-related pay, pension contributions and other taxable and non-taxable benefits. Universities also need to justify this package and demonstrate the relationship between the head of institution’s total remuneration package compared to other employees at the university, expressed as a pay multiple.
Universities that are members of OFS will also be required to disclose the number of employees who have a basic salary over £100,000 a year, broken down into bands of £5,000.
The collected total remuneration details for universities’ senior leadership will then be published by the OFS in an annual report to promote greater transparency around pay.
The audited financial statements, including details of senior pay, are due to be submitted by 3 December 2018. The resulting data around head of institution remuneration will be published from 2019.
The OFS can impose specific conditions, monetary penalties from 1 August 2019 and suspension from the OFS register if universities do not comply with the new requirements. Suspension from the OFS register can affect universities’ ability to access public funding, and the ability of new students to access student tuition fee and maintenance loans.
Nicola Dandridge, chief executive officer at the OFS, said: “Students and taxpayers need to be confident that our university leaders are paid appropriately and deliver value for money. High levels of pay that are out of kilter with pay levels elsewhere and which cannot be justified are unacceptable.
“The Office for Students is setting out our increased expectations around senior pay. Higher education providers will have to give us full details of the total pay package of their vice-chancellor[s]. In addition, they will have to provide detailed justification of this package.
“As part of this, we will be looking at the ratio between the head of institution’s pay and the pay of the other staff at the institution. This will provide additional visibility and transparency, and enable us all to ask tough questions as necessary.
“These disclosures will become part of our regulatory requirements, and if a provider fails to comply with these requirements or fails to provide justification, this may amount to a breach of our regulatory conditions, and we will not hesitate to intervene.”
Sally Hunt, general secretary at trade union the University and College Union (UCU), added: “[While] a focus from the Office for Students on vice-chancellor pay is welcome, much of the information being called for is already available in universities’ accounts or through freedom of information requests. Asking institutions to justify high pay for senior staff is all very well, but they need to do much better than complaining about how they’re being paid less than bankers or footballers. This new guidance seems to allow universities to simply craft excuses for vice-chancellors to hide behind. If university leaders are to be held accountable to students, staff and taxpayers alike, we need proper student and staff representation on the committees which set their pay.”