I absolutely agree. The functioning of remuneration committees in universities needs to be addressed. Ministers have recently set out a vehicle for doing so, and I will come on to discuss the Office for Students and how it might be used to increase transparency about remuneration.
Remuneration committees are, to put it mildly, opaque. How they are constituted and how they operate varies, and their willingness to be open also varies greatly between institutions, as the University and College Union has made clear. Bath is probably not an exceptional example of transparency in the setting of vice-chancellors’ pay, and that lack of transparency means that the quality of those settlements is likely to be diminished. We know that well in this place, because we have been through some of this in our not-too-distant past. Sunlight is the best disinfectant, and the public getting to see what is going on often acts as a restraint on as pay and benefits. Any transparency that can be linked to the process and to this part of the quasi-public sector has to be a good thing.
We also need to discuss what has happened to pay more generally within higher education. Much of the disaffection that has been expressed to me since the early summer has come from the academic staff of our universities. They have expressed some frustration that the rewards for institutions achieving great things appear to be accruing to higher management staff and vice-chancellors, whereas they have seen little benefit. They have seen their salaries increase by 3.8% over five years, which is in contrast to the average 17.4% increase for vice-chancellors, and the average pay for a tenured academic is a little over £49,000.
That seems rather strange, particularly in the context of performance-related pay. If we seriously believe in performance-related pay in the public and quasi-public sectors, we cannot simply except the majority of the workforce from that form of remuneration. That makes no sense, particularly since the drivers of quality in universities are clearly those at the chalk face—those at the laboratory bench. They are the drivers of the good-quality student experience and quality research for which this country is renowned and which we must maintain. Those people are being alienated by the egregious awards that they see coming out of remuneration committees to senior people in universities. The demoralising effect must be fully understood. When remuneration committees consider top-level pay and their legitimate need to attract high-quality people to the top of their institution, they must also understand more clearly the effect of such rewards on those who do the work.