Universities face final salary pensions scheme crisis

Universities are heading for a financial crisis over the payment of final salary pensions to their staff, a conference heard today.

Dr Geoffrey Copland, the former vice-chancellor of Westminster University who headed the pay negotiating body with university unions for four years, warned that the current pension situation “can’t be sustainable”.

Asked what would happen if it was not tackled, he replied: “Universities will be unable to afford the payroll and won’t be able to operate.

“I don’t think it will come to that - we’ll find other ways round it but it is a really stark situation we face.”

Dr Copland, who addressing a seminar organised by the Learning Skills Foundation sponsored by The Independent, warned: “I think this is one of the big issues the sector has to face.”

He said staff were in a variety of private schemes but that the cost of an individual’s pension was now “in the upper teens”. Many support staff were in private schemes “some of which are going to collapse”.

Dr Copland warned that redundancies amongst university staff were also likely to increase,

“We have to seek redundancies one way or the other(to make ends meet),” he added.

“That will not get any easier. In fact, it may get worse.” One way forward, he argued was to take on”high calibre specialists” from the world of business and the arts to deliver lectures to students – without incurring the extra costs of taking them on as full-time staff.

“This is opposed as casualisation by the unions but I would encourage it as bringing in terrific expertise to meet the particular needs of particular groups of students,” he said.

Meanwhile, Professor Malcolm Gillies, former vice-chancellor of City University, London, warned the current participation rate in the UK in higher education –particularly amongst males – was “unacceptable”.

“Only 30 per cent of white males expect to go to British universities this year,.” he said. This would leave the country unable to compete with other Western nations in the Organisation for Economic Co-operation and Development.

He conceded that government funding for higher education could in future be reduced so that it was used to “remedy market failure” and subsidise students in courses which were necessary for the future of the country but undersubscribed.

“If there is no shortage of students and they’re prepared to pay, why would you put any government money into that at all?” he said.

He added that universities should be encouraged to send their lecturers into schools to help foster an interest in higher education amongst those youngsters less likely to have had experience of it in their lives.

In addition, the schools should encourage the youngsters to visit their local universities.

Professor Gillies, who has advised the Government on school/university links in London, said it was one of the most successful methods of promoting participation.

A spokesman for the UCU, which represents university lecturers, said it was in negotiation with the employers over the future of the scheme.

“There is an agreement between UCU and the employers not to make any public statements on this issue at the current time, even if we seem to be the subject of inaccurate, unhelpful and unfair criticism,” he added.