Report of Discussion

Tuesday, 1 March 2016

A Discussion was held in the Senate-House. Pro-Vice-Chancellor Professor Graham Virgo was presiding, with the Registrary’s Deputy, the Junior Proctor, the Deputy Senior Proctor, and two other persons present.

The following Reports were discussed:

Report of the Council, dated 9 February 2016, on the arrangements for approving market pay (Reporter, 6414, 2015–16, p. 356)

Dr S. J. Cowley (Faculty of Mathematics):

Deputy Vice-Chancellor, this Report only indirectly references the Second Joint Report of 25 July 2005 of the Council and the General Board on a new pay and grading structure for non-clinical staff. One of the aims of that report was to implement pay and grading structures that would ‘stand up to challenge on equal pay grounds’. Means of achieving this included the introduction of the single pay spine and the use of a grading methodology. One of the features of the proposals ‘was greater transparency about criteria, processes, and outcomes in relation to pay and grading’. The current Report seems to have been inspired by hand-brake turns.

As recorded in the Equal Pay Review, 2014 (Reporter, 2014–15, 6370, p. 300), ‘the average payment in 2014 for market supplements, market pay, and advanced contribution supplements equates to £15,855 for male and £9,374 for female employees’ (although this discrepancy had somewhat reduced since 2012). A number of us warned, when market pay was introduced, that such payments tend to be awarded disproportionately to men; we were right. What is the point of having a single pay spine and making use of a grading methodology if all that happens is that loopholes are exploited? By the secretive nature of such payments, how do they introduce greater transparency about criteria, processes, and outcomes? Market pay drives a coach and horses through many of the high-minded ambitions of the 2005 Report.

Indeed, all posts have to be graded using the somewhat notorious PD33, so all have a stipend. However, increasingly adverts for upper-end posts do not refer to that stipend; is this because there is a presumption that market pay is to become relatively standard at the top end? No wonder the central bodies want to increase fivefold the threshold for requiring committee approval for an award of market pay to 50% or £50k (whichever is the smaller) of basic pay. Committees provide essential checks and balances.

Pay is an emotive subject, and while I was on the Council, I heard good reasons why certain staff had to be paid a market supplement, e.g. staff in the Investment Office. I also heard bad reasons. When appointing a Vice-Chancellor, an external member opined that the remuneration of Cambridge’s VC should surely be in the top quartile of similar UK VCs; fortunately, the reply from a bunch of academics was a resounding ‘no’.

As was noted concerning the Avery benefaction, it is not lawful for a charity to overpay its staff. It should pay the amount that is reasonably necessary to secure an individual’s capabilities and commitment. As a lawyer put it somewhat crudely, ‘if an individual was happy to accept the Professorship for an annual remuneration of £100,000, why would a charity offer remuneration of £200,000? This principle is pervasive in charity law, and is the reason why charities generally are not allowed to make ex gratia payments’. In the case of the VC, I proposed that we shot low, e.g. at the paltry level of the Prime Minister’s salary, or that of a low responsibility job like the Head of the Metropolitan Police, rather than to match Oxford. For once (possibly the only time) I was somewhat humoured. Before final interviews, remuneration was settled with the candidates if they proved to be successful. All accepted far closer to my proposed level than that opined by the external. Why? Well, settling remuneration before a decision keeps the employer/charity in the driving seat, and of course negates the weasel words in the Report that ‘where it is necessary to agree market pay for recruitment or retention purposes, immediate action is usually required and further committee approval militates against timely action’. Indeed, words fail me regarding that statement (actually, they didn’t, but I am not sure that the Reporter would be willing to print what I thought). Has the Old Schools never heard of email? Is it impossible to circulate for a decision?

Yes, market pay is sometimes necessary. Yes, sometimes a decision has to be made quickly. So how to proceed? First, more opportunity should be made to negotiate remuneration with the final candidates before interview and decision. Second, if significant market pay is subsequently required, then papers should be circulated electronically asking for approval within 48 hours (or if necessary, 24 hours). Since the endgame for many appointments, especially academics, seems to go on interminably, there is time to get committee approval. The lack of time argument is a fig leaf.

The Report also contains the statement, as regards the statistical information published annually about staff grades, ‘The format of the data provided on market pay awards will be reviewed before the Notice concerning data as at 31 July 2016 is published’. No explanation is given as to why the format needs to change. Do the Council wish to make it more obscure or more transparent? My vote is more transparent. Indeed, why not go the whole hog and publish individual pay, or at least market supplements, e.g. in a band. In the past the central bodies have argued against publishing, even banded, individuals’ salaries, appealing to the Data Protection Act. Hogwash. Her Majesty’s Government does it for salaries over £150,000: see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/62343/high-earners-pay_0.csv/preview.

Further, even today Cabinet Office Minister Matt Hancock has stated (according to the BBC):

We will spread transparency throughout public services, making sure all public bodies routinely publish details of senior pay and perks.

Having been on the Council, I am aware of at least some of the large market supplements (including bonuses) that have been, and are being, paid. The Regent House does not know. It does not know if any of those who oversaw an overspend of £50–£80m on North West Cambridge are being paid market pay, and whether it is more or less than 50%. Maybe they should, particularly if, as seems likely, no senior heads are going to roll. I do not believe that paying high salaries necessarily recruits the best staff. I do not care whether our salaries are in the top quartile of UK university salaries. Indeed, sometimes the most committed and capable staff will come for less. There are outstanding examples (although the shine is going off at least one in my eyes).

What I also find galling is that the money is there if it is for top salaries, or for animal houses, or for capital overruns (possibly overseen by staff with large amounts of market pay). The time it was not there was for USS. Then there was no money (when, in fact, we now know that the money was there, both here and at other universities, but for capital plans and market pay, rather than the rank and file). I predicted that those at the top would look after themselves; are they doing so? Your pension has been screwed, sir (and it is more often than not a sir)? No matter, we will just give you a secret 49% market supplement, with few checks and balances.

When I staffed the UCU stand for new appointments, I used to say that the University was a good employer. No more. There have to be checks and balances on market pay. The grading methodology should be respected, and if it is not up to the job it should be reformed (and those in post who would benefit, should). We should take the commitment to equal pay seriously (or return the Athena SWAN Silver Award). The solution is not to reward a few women with even more market pay (which, cynic that I am, seems to be what is happening), but to reward all staff fairly and transparently. The University is losing its moral compass (as illustrated by a recent decision not to comply with an Employment Tribunal order).

At the end of the Report, the Council notes that the HR Committee is conducting a wide-ranging review of certain HR practices including pay and reward, for report to the Council later in 2015–16. If so, this Report should be placed on hold until then, and its revised recommendations (if any survive) should be included there.

Report of the General Board, dated 10 February 2016, on the establishment of an Al-Kindi Professorship (Reporter, 6415, 2015–16, p. 394).

No remarks were made on this Report.