Unions vs. employers: who is right?

Students may fail to graduate this summer if the lecturers' pay dispute is not settled soon. The universities say they don't have the money. The academics say they do

In a month's time, more than two million students at universities around the country should be filing into examination halls. Hundreds of thousands should be taking finals. But there is a real possibility this year that the exams won't happen - that they won't be set or marked - because of industrial action by lecturers' unions.

"It's perfectly possible that students will not graduate this year," says Sally Hunt, general secretary of the Association of University Teachers, which is merging with Natfhe, the National Association of Teachers of Further and Higher Education. "Unless the employers respond to our claim in a sensible way, this is a real possibility. We certainly hope it doesn't happen, but it may."

Such tough talk is, of course, part of her strategy to frighten the university employers into increasing their pay offer. The lecturers have put in a claim for 23 per cent over three years. Last week, the University and Colleges Employers' Association (Ucea) made their first offer to all seven unions in higher education - three per cent from August this year and another three per cent in August 2007. It was rejected as "derisory" by the unions. Unison, which represents manual workers like cleaners and porters, said that it was inadequate.

"Many universities continue to pay manual workers at barely above the national minimum wage, and it's completely unacceptable that these universities, some of them among the best in the world, have the lowest paid staff in the public sector," says Christina McAnea, head of education for Unison.

There are some good reasons why this year's pay round is unusually bitter and protracted. The first - and most important - is that there is more money flowing into higher education than normal. Top-up fees mean that universities will have more money at their disposal. A relatively generous financial settlement from the Higher Education Funding Council also means that university coffers are fuller than usual. The unions regard this as an unmissable opportunity to squeeze more out of vice-chancellors.

"This year we have a big opportunity," says Roger Kline, head of Natfhe's universities department. "For the first time in a long time, there is a significant amount of extra funding in the sector. If we don't get some of this at the start of top-up fees, a pattern of spending will have been set for the years ahead. We want to make sure that as much of the top-up fee money as possible goes on pay."

The employers reply that the lecturers' unions misunderstand how much money university bosses have to play with. Both sides trade statistics to bolster their arguments. The lecturers said last week that the six per cent increase offered over two years was a long way short of the "at least a third" of the £3.5bn coming into the sector over the next three years.

That, according to the AUT, is a reference to a comment by the former higher education minister Alan Johnson, who said (see Hansard, 29 April 2004), when explaining top-up fees: "That is one of the reasons why we are pursuing the controversial measures in the Higher Education Bill. Not only are we putting in an extra £3bn from the taxpayer, but an extra £2bn will come through existing fees and through the increase.

"University vice-chancellors tell us that, in general, at least a third of that money will be put back into the salaries and conditions of their staff. That will make an enormous contribution towards tackling a very serious and deep-seated problem."

The employers argue that the AUT is playing fast and loose with the facts. The "at least a third" referred to by Johnson is at least a third of the income from top-up fees, not of the extra money from Hefce. Top-up fee income is no more than £1.3bn over a three-year period, according to Jocelyn Prudence, Ucea's chief executive - and a third of that money is already committed to offering bursaries and scholarships to needy students. "The fact that the statement covers conditions as well is quite important," says Prudence. "That could mean more staff, or pay-related issues and pensions. It doesn't mean an across-the-board increase."

According to Dr Geoffrey Copland, chairman of Ucea and vice-chancellor of the University of Westminster, the unions are mistaken if they think that the extra Hefce money for this year is "free" money that can be spent on salaries. "Quite a lot of the money is earmarked for teaching or other projects," he says. "We can't spend it how we like."

The £3.5bn quoted by the AUT is a mythical figure, says Copland. "I don't know where they get it from. We have asked them consistently to validate the numbers they are using, so we know what it is they're quoting, but they can't."

The deadlock over whether universities have extra money is only one issue over which the two sides disagree. The employers are also fed up with another figure that the lecturers give: they say their pay has declined by 40 per cent over the past 20 years. That figure is seriously misleading, according to Prudence. "We have asked them for an explanation. We think we understand now what it is based on. It seems to be a comparison between someone on the top point of a lecturer B scale in a pre-1992 university and the earnings movement in other parts of the economy. It is seriously misleading because it doesn't take account of incremental progression or promotion."

The fact is that average earnings of academic staff have risen by 20.3 per cent since 2001, according to Ucea. In 1995, only 11 per cent of staff were professors; now 18 per cent are. Overall, 49 per cent of staff are in senior grades, which means they are earning more than £40,000 a year. Moreover, university pay is being restructured this year to put everyone on a single pay spine and this pay modernisation will put an extra four to six per cent on top of this year's pay increase.

A further sticking point has been whether the unions should suspend industrial action while taking part in negotiations. The two lecturers' unions did not attend last week's meeting at which the offer was made because they refused to lift their campaign of action. Ucea says that attaching such a condition to negotiations is commonplace; Hunt says she was shocked to be "excluded".

The war of words reflects the profound distrust that both sides feel towards one another. The employers suspect the lecturers' unions of spoiling for a fight on the grounds that this year they submitted their claim 10 months early. There has already been a one-day strike in universities and colleges last month, which the unions say was successful and the employers say had a patchy or non-existent effect.

The vice-chancellors also suspect that the AUT and Natfhe are flexing their muscles in advance of the union merger. Those at the top of the unions want to demonstrate how tough they are, thereby winning senior management positions in the newly merged union. Hunt denies that the reason for her militancy is a desire to win the general secretary's job: "My job is to get the best pay and conditions for my members."

If the two sides fail to settle by Easter and the industrial action goes ahead, the people who will suffer are the students. To date, the National Union of Students has been making common cause with the academics, spouting the same figures and the same arguments. But there are signs that individual student unions object to the notion that third-year students may be unable to graduate. Will they force the national union to change its tune?

The dispute in brief

What is it about?

The lecturers are asking for a 23 per cent pay rise over three years.

Isn't that a bit greedy when school teachers are getting 2.5 per cent?

The employers would say yes. But the unions say that academics are historically underpaid and that this is a special year because of new top-up fee money and a bigger than usual settlement for universities from the Higher Education Funding Council.

So why don't the vice-chancellors cough up?

Because they say they don't have the money. Much of the top-up fee money will go on student bursaries. And much of the extra Hefce money is earmarked for special projects.

Who is right?

They are probably both right. The universities don't have total freedom of manoeuvre when it comes to the Hefce money, but they may have more than they are admitting. But, according to the employers, academics are no longer as badly paid as they were.

Really? Yes, figures from the Office of National Statistics show that 49 per cent of full-time academics are earning more than £40,000.

Do the unions agree?

No, they quote different figures showing some researchers on very low pay. LH

l.hodges@independent.co.uk