In reply to Offwidth:
...back on topic then.
Part 3 of my postings: the employers' response to the pay demand and my view on its applicability and honesty.
The UCEA website is here:
http://www.ucea.ac.uk/en/empres/paynegs/current/
The latest detail here is the early statement produced in March (despite their protestations to be willing to discuss and engage) it contains the following views (in quotes … with my responses after):
" The 2013-14 JNCHES pay negotiations take place against a very uncertain background, both in terms of the HE sector and the wider economy. The impact of the funding changes in 2012-13 in England on individual institutions is only now starting to emerge and the differences in HE funding and fee policies between the four jurisdictions of the United Kingdom are leading to significantly different funding contexts. In England the situation is still very uncertain and Sally Hunt, General Secretary of the UCU, has said that the funding plans “could well be disastrous for our universities” (UCU, 2012a) and “endanger the health of the sector” (UCU, 2012b). Commenting on the most recent set of sector financial forecasts, Alan Langlands, Chief Executive of HEFCE, said that “recent talk of universities being ‘awash with cash’ is ill-informed”."
Smoke and mirrors: they have the money now and the risk from giving a better than 1% award this year is hardly massive if you put it in context with the huge investment in buildings (and mortgages with that) that have come close to bankrupting some HEIs and are the main reason cash is short in some institutions. Many institutions have significantly increased numbers of non-academic staff in bureaucratic areas that best managed industries have been removing.
"Given the state of the UK economy and perceptions that the HE sector has not faced its share of the public sector cuts, HEIs are anxious about the funding settlements from 2015 onwards. According to data from the Financial Times (2013), Department for Business and Skills (BIS) potentially faces a £1bn cut in its budget and a 19.2% real change between 2015 and 2018. The Chancellor also announced in his 2013 Budget that all unprotected departments, including BIS, will be required to cut spending by an additional 2% over the next two years."
Blackmail now: we might be due cuts in the future better be careful.
"There was a decline in demand for undergraduate university places across the UK in 2012-13 and acceptance numbers in England were considerably affected by the new funding policy with 40 HEIs experiencing a fall in student numbers of 10% or more. The latest UCAS figures for 2013 applications show that there has been a 3.5% increase on 2012, but the number of applications received is still 4.2% lower than at the same point in the cycle for 2011."
More smoke and mirrors: the demand is linked to overall balance sheets not the worst case scenario in the worst hit institution on student numbers where in some cases they are still spending money they don’t have on other things to compete more and increase administrative control. The sector is full of terrible management mistakes in the worst financed institutions and the average practice falls well behind the best in management practice. Overall student numbers (including overseas students) are roughly static and have increased significantly since we last got any pay award that was close to inflation. However, most importantly incomes have risen balance sheets are more healthy.
"In terms of financial health, the most recent HEFCE data indicates that institutional finances in England are generally satisfactory, but it stresses that student recruitment in 2013 will be a major uncertainty for institutions planning their expenditure. Some institutions may well need to dip into reserves in 2013 if the decline in student applications continues and to revisit areas of expenditure. Institutions also now need to keep larger reserves to cover capital costs (borrowing for new buildings, infrastructure maintenance, IT, etc.) as the funding for this has been almost entirely cut by government in all the devolved nations. Overseas student numbers have also been hit badly by the new student visa controls. There is no real terms increase in research funding and cuts to European research funding could be significant for research intensive HEIs. Funding councils in Scotland and Wales and the Department for Education and Learning for Northern Ireland have all indicated an expectation that HEIs will deliver efficiency savings in the coming year given the constraints on public expenditure and the need to maximise value for money. In England the BIS funding letter indicates likewise and repeats last year’s expectation of restraint on pay."
We have delivered efficiency savings for decades so why will this suddenly stop now? You might think the sector is on the edge of a cliff from all the doom and gloom here, what about the continued success: things like the significant growth in 3rd stream income? The view on balance sheets (the key issue): generally satisfactory... the areas cut illustrate how badly UCEA fight their corner with government.
"The private/public pay divide continues as a result of the Government’s pay restraint policies. In the private sector, the median pay increase was 2.8% but awards have been variable across industries and projections for 2013 indicate that pay increases in the private sector will continue to vary by sector. Pay awards in the public sector were largely around zero, although there has been an underpinning increase of £250 per year for those earning £21,000 and below. Some parts of the public sector moved in the last year into a pay policy of overall increases capped at 1%, a policy that comes into effect for all other workforces from April 2013 and will continue to 2015-16. In local government, there have been zero increases for the last three years but staff on the main pay spine were offered a modest increase for 2013-14 (rejected by the unions). Despite pay freezes, earnings levels in the public sector have continued to increase by modest amounts due to pay drift (e.g. increments and promotion increases)."
HEIs are not strictly speaking public sector, even if most of out income is public money. Employers and the government tell us one thing when it suits them and the opposite when it suits them, with no shame whatsoever in the dichotomy. There is no evidence I've seen that shows significant average individual lecturer pay increase due to pay drift. Overall pay has gone up slightly but the reasons relate to funded capacity which is highly complex and following a time of huge growth (and much smaller growth in lecturer numbers). Income, in contrast, has gone up much more than overall pay costs. Hence the key factor: the percentage of HEI expenditure on pay has dropped. UCEA make a big thing out of incremental progression increasing pay costs but this only increases costs when the system is out-of-balance. The number of people at any increment point is typically pretty static as people move up a little each year but expensive people retire to be replaced by people at the bottom of the scales.