UK university unions accused bosses on Monday of failing to invest in staff as the sector’s pension fund went into surplus months after steep cuts to retirement benefits were imposed on thousands of members.
The intervention by the Universities and Colleges Union comes ahead of a vote for industrial action next month, which is part of a long-running dispute over pay, pensions and working conditions.
UCU general secretary Jo Grady accused university chiefs of “hoarding billions of pounds in cash” as the union published an analysis of the finances of the 145 higher education institutions involved in the dispute .
It found that collectively its cash reserves and liquid assets had grown by £3.4bn in the 12 months to April 2021, while staff spending rose by just £200m. Combined revenue rose to £41.1bn, up from £39.6bn a year earlier.
Grady accused the vice-chancellors of 145 institutions of “holding down staff wages, cutting pensions and sinking thousands of struggling people” and called on them to use some of the surplus to improve pay and conditions.
The University and College Employers’ Association (UCEA), which represents vice-chancellors in pay disputes, said the aggregate figures “mask[ed] considerable variation between [higher education] institutions”, which differ enormously in their financial robustness.
“Each institution has a legal duty to balance its books and the nationally negotiated pay rise must be affordable for all 145 institutions,” UCEA added in a statement. “Lots of. . . Institutions are working hard to avoid redundancies, and others are struggling to balance budgets to maintain staffing levels, while delivering this year’s pay rise into staff pockets.”
Attempts to step up pressure on employers by the union followed publication late last week by the Universities Pension System (USS) which showed the sector’s £77bn pension fund pounds had a surplus of 1.8 billion pounds, the first since 2008.
The fund’s move into surplus comes less than 18 months after a valuation, carried out as global markets tumbled in the early days of the coronavirus pandemic, identified a £14bn shortfall in the scheme, which has 500,000 members.
The huge hole sparked industrial unrest as vice-chancellors tried to plug the shortfall by making pension cuts for the 200,000 members who pay into the USS, the UK’s largest private sector defined benefit scheme.
The UCU, which represents more than 120,000 teachers and administrative staff, said the scheme’s move into surplus meant employers must act immediately to reverse cuts to new pensions due in April this year . The union estimated the move would cut a typical teacher’s guaranteed pension by a third.
“We have said time and again that USS is an extremely strong pension plan with excellent long-term prospects. The news that the plan has a significant surplus is just the latest vindication of our position,” Grady said last week.
USS chief executive Bill Galvin has written to employers suggesting that improving finances could lead to discussions about increasing benefits or reducing pension contributions.
However, he added that “caution” was needed due to uncertainty about rising inflation and interest rates in a volatile economy, and the fact that improvements were identified as part of a report by monitoring, rather than a full formal pension fund valuation.
Universities UK, the sector’s trade body, said the surplus was “positive news” but rejected calls for pension cuts to be restored immediately, noting markets remain “highly volatile”.