How much is a University Vice chancellor really worth?

Universities are big business but they are also a vital part of the public sector. Why are vice chancellors paid so much more compared to staff in other more demanding parts of the public sector?

I’ve been thinking a lot about public sector pay recently. Two things have brought this thought process on:

Firstly, its because we have seen the Tory view of value when they have set earnings levels as a way of letting people in to our Country or not. In their eyes if you earn more you must be worth more. That may in some contexts be true but it’s not necessarily true for those who work in the public sector.

Take the people who look after my mother-in-law who is suffering from severe dementia. The people who look after her are, apparently, unskilled and therefore earn little more than the minimum wage. Unskilled?! No, it’s not true is it. Looking after someone with dementia is a highly skilled job. True it might not necessarily be a job with high qualification levels although many do have qualifications up to NVQ3 level.

 But the ability to deal with people with severe problems like dementia needs a caring heart, compassion and patience. Why are these cheap skills? Why do we value these skills less than people with skills in, for example, the finance industry? Perhaps it’s because one set of people make lives liveable whilst others make money.

Secondly, I saw some quite obscene figures for the pay levels of University Vice Chancellors. I know that Universities are complex businesses and the University world is highly completive as they chase students and research grants. But the job is nowhere near as complicated as being the Chief Executive of a large council like Liverpool.

A council Chief Executive has to control staff in a wide range of disciplines; with huge cuts in budgets and difficult social decisions. If they and their politicians make mistakes people’s lives can be seriously affected. This can leave to massive reductions in the health opportunities for local people and communities and in extremis, loss of lives.

Council staff do things in the public view. They are criticised in the press. They are visible at public meetings. They can be publicly questioned by councillors and public. Their shareholders, the residents, are also their service users with a huge range of subjects. University Vice chancellors are rarely exposed to public scrutiny.

So why do most University Vice-Chancellors get twice as much salary as the Chief Executives of the cities and towns in which their universities are situated? They are legally private companies but of course are very heavily dependent on taxpayers’ cash.

In the 13 years of the Blair/Brown Governments there were three major reorganisations of the NHS. I watched in amazement as senior staff were made redundant twice with large payoffs and then go almost immediately to another NHS job. Of course, if you were a street sweeper or a refuse collector you wouldn’t have such a luxury if you were made redundant, but the sharp elbowed can always find a way to make money by gaming the system.

But then let’s take the argument still further. Why is money such a huge motivation? Who needs £450,000 a year to live on? I’ve never earned anywhere near as much as a quarter of this but I have a nice house and a nice car and can afford to go away on holiday for a few weeks a year. I consider myself both privileged and lucky and I would not know what to do with more money that I have earned except, of course, give it away some of it in the direction of my grandchildren.

Then we have the discussion about taxation. Why is it that higher earners get a larger percentage tax allowance towards their pensions than lower earners? Why is it that wealthier people pay proportionately less council tax than lower earners because of a grossly unfair tax banding system? Why can’t people over an earnings level of £150,000 a year pay more towards the costs of running the society which enables them to make the high salary?

These are issues which society has to deal with and for which we need to have a huge debate about what is acceptable and is not.  There are some things which we can do:

  1. Set a maximum level of pay within the public sector and quasi-public sector;
  2. Set a maximum level for redundancy pay outs in the public sector
  3. Review entirely our highly complex system of tax rebates and tax levels to have an easier to understand system which acts more fairly in terms of collection of the money which our society needs.
  4. Have an immigration system which recognises value to society in more sophisticated terms than earnings levels.

Sorry if this seems even more of a rant than normal but I increasingly feel that there is plenty of money in this Country but we don’t share it out properly. I don’t believe that we should all get the same amount. I believe that some are financially worth more than others for a whole variety of reasons. The gap between top and low paid should be much smaller if we want to have a more civilised society. The Scandinavian Countries don’t need Anglo-Saxon style hyper salaries for their business or public sectors so why should we?

About richardkemp

Leader of the Liberal Democrats in Liverpool. Deputy Chair and Lib Dem Spokesperson on the LGA Community Wellbeing Board. Married to the lovely Cllr Erica Kemp CBE with three children and four grandchildren.
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