Are Vice-Chancellors paid too much? (2018)

A chapter I wrote a while back on pay and purpose in higher education, published in ‘Top Dogs and Fat Cats’ (ed. Len Shackleton)

The costs and value of the Higher Education sector

Although a substantial Higher Education and Research Act received Royal Assent in 2017,[1] clarity has often been missing from public discussion about the UK’s provision of post-18 education. Obfuscation has driven cynicism and impaired the general understanding of policies, not least those related to fees and funding. Meanwhile, important questions relating to the existing and normative role of Higher Education (HE) remain overlooked. Arguments about pay, and particularly that of HE’s top executives, typify this problem. Fundamental questions need serious deliberation before the remuneration of those executives can be addressed, not least because top pay rates do not occur in a vacuum. Universities are highly bureaucratic, complex, growing systems, often supporting thousands of students and employees — and they are highly varied. Recognising variety is key to understanding the sector: all universities are not the same; neither should we expect their employees to be the same, or to be paid the same.

The government has responded to concerns about VC pay by affording a new regulatory body, the Office for Students (OfS), the power to monitor and publish VCs’ remuneration packages, and to require universities to provide ‘detailed justifications’ for these packages, including consideration of pay ratios.[2] Yet, the fundamental questions remain unaddressed. These are difficult to answer not least because so many types of institution sit under the umbrella of ‘university’; in the UK, the word largely equates to what other countries tend to call ‘the tertiary education sector’. While all UK universities provide HE, all providers of UK HE are not universities. Meanwhile, the institutions referred to as ‘universities’ are highly disparate, in terms of parameters ranging from purpose to results to size, and more.

The number of students participating in UK HE vastly grew over the twentieth century,[3] correlating with changes to attitude and policy. In 1920, 4,357 people gained an undergraduate degree, as opposed to 17,337 by 1950. After relatively little change by 1960, over 50,000 graduated in 1970. Numbers continued to grow gradually, before a notable change at the end of the century. In 1990, 77,163 gained undergraduate degrees; in 2000, this had risen to 243,246 — an increase of 215 per cent. Extended provision was driven by desire to equalise: to try to ensure that everyone who was suited and keen to pursue a university education was able to attain one. There are flaws in any expansion-based approach to achieving this admirable goal, however, and an equalising approach has not only branded all students (or, often, more accurately, all 18-year-olds) the same, it has also done the same for HE establishments.

Financial commitment has been central to government involvement in HE over the past centuries. With the sector’s growth has come increased expense and new approaches to funding, as well as changing attitudes to the extent to which the state should be involved.[4] HMT estimates 2018 HE spending at £17.3bn.[5] However, while expense has been gradually transferred to graduates, the cost to the taxpayer regarding student loans remains extensive. The Institute for Fiscal Studies calculated in 2014 that for each £1 loaned, the ‘long-run cost’ to the government was 43.3p.[6] £17.7bn of HE providers’ current £35.7bn income comes from fees.

An awareness of the intrinsic and instrumental value of the teaching and learning of knowledge has always been behind state support of the HE sector. The economic value of university education — to graduates and wider society — is particularly well documented.[7] It is also essential to recognise the wide instrumental value HE brings in terms of a shared democratic deliberative pay-off. Martha Nussbaum has championed ‘the case for liberal arts education, in connection with democratic citizenship’, criticising how related skills acquired from studying humanities and arts subjects are often seen by policymakers as ‘useless frills’, unrelated to ‘stay[ing] competitive in the global market’.[8]

The setting and current rates of of VC pay

Universities’ societal obligations seem extensive, owing both to the educative nature of their purpose, and the privileged place they hold in society — not least regarding the taxpayer support they receive. For many, this brings certain expectations about the remuneration of HE employees, and leads to criticisms about the escalating pay rates of VCs. Of course, these kinds of expectations are not limited to discussions of HE. In What Should We Be Paid?, J.R. Lucas asks:

How much should the Queen be paid? There is no market in Queens, and if there were, it would be impracticable to choose between the many would-be Queens who had offered themselves. Although there are many jobs that can be left to the market to sort out, there are others where some social consensus is needed about appropriate levels of pay.[9]

Agreeing with Lucas does not equate to suggesting that the state — or some kind of bureaucratic people’s tribunal — should determine the levels of pay for those jobs about which ‘some social consensus is needed’, however. In the case of VCs, it seems appropriate for universities to recognise and choose to meet their own societal obligations. But if being a VC is indeed an example of such a job — and, for the purpose of this investigation, we might take it to be — then how should their current rates of pay be assessed? Are pay ratios relevant? Whether a VC is ‘worth’ x times as much as a y depends not only on the extent to which we value y, but also whether we think such crude comparisons are helpful.

There are three main issues that are in need of consideration when assessing pay rates: what they are, how they came to be so, and whether what they are is right — and ‘right’ could be grounded on ideas of market freedom, efficiency, fairness, or other factors. That the UK has a minimum wage, the introduction and setting of which was predicated on concepts such as need and fairness, means that pay at the bottom end of most sectors is standardised and regulated. This kind of approach can have detrimental effects on the flexibility of the labour market in terms of compressing pay differentials, and can be particularly problematic for lower-skilled workers and small businesses. In certain industries, the high degree of influence of trades union and other industry bodies also has a direct impact on pay rates.

John Hicks’ The Theory of Wages remains one of the best accounts for understanding how pay works in a competitive market.[10] Wages, Hicks explains, are ‘the price of labour; and thus, in the absence of control, are determined, like all prices, by supply and demand’.[11] However, he points out that, although a simple supply-demand model of pay works well in descriptive terms, its explanatory powers are lacking:

Wages, say the text-books, tend to that level where demand and supply are equal. […] Now this, as I hope to make abundantly clear, is quite a good simplified model of the labour market. […] But, since it is a simplified model, it is extremely likely to be misconstrued by those who take it to be an account of how the real labour market works.[12]

Hicks explains that, in order to understand phenomena such as unemployment, it is necessary to recognise that the determination of wages is a ‘special case’ of the general theory of value: the demand for labour is derived, because, generally, it is what the labour produces that is valued. Moreover, while Hicks uses a fixed-equilibrium model to test his general principles, in truth the labour market is ever changing, because, as he explains, its economic determiners are:

changes in tastes, changes in knowledge, changes in the natural environment, and in the supply and efficiency of the factors of production generally. As these things change, so the marginal productivity of labour changes, and these changes in marginal productivity exert pressure in one direction or other on level of wages.[13]

Hicks builds on previous work, including that of Alfred Marshall,[14] in emphasising how the law of marginal productivity is central to explicating wage setting, but he points out that the market is insufficiently elastic — owing to factors such as the investment of capital — to allow for rapid adaptations to the level of wages following significant changes in the marginal productivity of labour.

Now, if the general labour market is special and complex in these senses, then surely the HE labour market is even more so. It is not only the case that the latter is affected by the standard factors Hicks emphasises, including the minimum wage, and the rigidity that comes with a focus on cost-effectiveness in the investment of large amounts of public capital. The salaries of HE’s lower-to-mid-range-paid employees are also, in large part, determined by national pay scales, and, at the very top end, there are a fixed number of jobs: one VC per university.[15]

Regarding the setting of VCs’ pay, it is important to recognise the difference between the majority of the sector, which receives public funds (on which this chapter focuses), and alternative providers. Publicly-funded universities are guided on issues of remuneration by the Committee of University Chairs (CUC) — and, most importantly, by the CUC’s HE Code of Governance,[16] its note on remuneration committees (RCs),[17] and its recent Remuneration Code.[18] The aim of the Remuneration Code, which was published in June 2018, is to inspire good practice; the CUC claims that governing bodies that ‘visibly adopt’ this code will be ‘demonstrat[ing] leadership and stewardship in relation to remuneration within their institutions’. Rather than making specific recommendations in terms of ranges of appropriate pay, the code focuses on the abstract concepts of fairness, transparency, and independence. Institutions abiding by the code are required, however, to publish an annual statement, including information such as their ‘choice of comparator institutions/organisations’, the ‘pay multiple of the HoI and the median earnings of the institution’s whole workforce’, and ‘an explanation of any significant changes’.

Each university has an RC, which determines and oversees the pay and conditions of senior staff. The membership of RCs often includes VCs, although the majority of members are expected to be ‘lay governors’ (who are not in the pay of the university), and VCs are also expected to leave the room when their own pay is discussed. Senior pay is usually set in terms of a base salary, although a number of institutions give performance-related bonuses, via systems of varying quality and clarity — some based on quantitative metrics, and others on qualitative assessments of achievements. Moreover, transparency in the system unsurprisingly leads to universities increasing their senior staff’s remuneration on learning competitor institutions are paying more.

The following factors should also be noted. Recently, significant changes have taken place to the distribution of many VCs’ pay: for their tax benefit, the balance between salary and pension has varied. While such changes do not change the overall cost to institutions, they do affect headline figures. It is also well documented that some VCs took voluntary pay freezes during the Great Recession, and it is also sometimes claimed that VCs make sizable donations to student welfare programmes, and other similar enterprises. If we were to consider acts of charity as relevant to justifying pay rates, however, surely that would effectively be to argue that distributing funds differently in the first place — cutting senior pay, and spending the difference on such programmes — would be a better approach. Finally, once again, differences in the sector are key. The highest-paid individuals in institutions with medical and business schools — where rates are driven up by externally-determined clinical pay, and the benefits that strong connections with big business can bring — are not always VCs, but VC pay is pushed up relatively, nonetheless.

The headline finding of the 2018 annual Times Higher Education survey is that average VC remuneration (salary, bonuses, and benefits) rose by 3.9 per cent in 2016–17, to £268,103 — or, when pension contributions are included, to £289,756 (an increase of 3.2 per cent). Median VC pay for 2016–17 was £261,289, or £287,000, respectively, and VCs’ total remuneration including pension costs is shown to range from £136,000 to £808,000. The top figure is an outlier, however, owing to a ‘pay-off for loss of office’;[19] the next highest amount is £471,000. The University and College Union (UCU) also publishes annual reports into VC pay.[20] These reports, which depend partly on Freedom of Information requests, reveal (most) VCs’ salaries; the rates of increase in those salaries; the extent of VCs’ expenses, including property, spend on air fares, accommodation, and consultancy fees; and the pay, and pay increases, of their staff. UCU also requests the minutes of universities’ RC meetings.

Is current VC pay ‘right’?

To attempt to assess whether current VC pay rates are commensurate, it seems sensible first to consider what being a VC might entail. Disparity in pay between VCs is, on one level, easily explicable in that, as we are already aware of the disparity between HE institutions, it makes sense that their leaders will be carrying out highly varying duties. But what are those duties, and are they being fulfilled? If they are, are VCs rewarded fairly? If not, are they held accountable? Do the disparities between pay and role, or performance, match? And how else might we assess whether the system is working efficiently, whether it is fair, and what message pay rates send?

Few VCs are as distinguished as the Australian National University’s 2015 appointment: Brian Schmidt has not only won a Nobel Prize, he also runs a famous vineyard. It is worth noting at this point that Schmidt, with a salary of around $618,000 (or £360,000), was, in June 2017, ‘likely among the lowest paid of all Australian vice-chancellors, despite [ANU] being among the highest-ranked in the country’, according to The Australian.[21] Schmidt’s successes aside, many UK VCs have held prominent positions — in the public and charity sectors, on powerful committees, advisory councils, and more. And nearly all high-ranking universities demand strong academic credentials in their leaders (although an increasing number of VCs come from more practical academic backgrounds, such as business or engineering). But whether the heads of universities should be successful academics, as well as good ambassadors, depends again on what it is their job entails.

Unsurprisingly, VCs’ duties vary widely depending on factors such as the size, prestige, and aims of their university, yet the following statements relate to most holders of the position: the VC is a university’s principal academic and administrative officer, its chief executive, and often the chair of its primary academic body and a member of its governing body; the VC determines their university’s ‘strategic direction’, and must maintain and build on its reputation, not least regarding its place in league tables; the VC usually has responsibility for thousands of staff, and a sizeable financial turnover (for instance, the University of Warwick calculates its at £0.6bn);[22] the VC also has regulatory responsibilities, performs a ceremonial and civic role, and creates and maintains business and governmental partnerships in the UK and abroad.

One former university executive describes running a university as being ‘similar to running a small town’ — not only is it effectively the biggest hotel in the area, its leaders also have to provide local leadership on issues ranging from environmental impact to terrorism. Universities are public authorities rather than public bodies, which raises the level of risk involved for their leaders. As the sector has become more competitive and international, a greater degree of risk and complexity has also arisen. Moreover, VCs’ engagement with external bodies also includes dealing with multiple trades union. However, again, it is clear that these demands vary greatly depending on the specific institution.

When asked to justify the level of VCs’ pay in terms of what they actually do — rather than by making comparisons between their pay and the pay of others in or out of the sector — VCs often emphasise the (large) size of their institution and the (high) quality of its achievements. It is, they claim, a huge responsibility to run such a place. A significant correlation is often assumed, therefore, between pay and performance, and pay and size. Although it would be possible to compare performance changes against pay changes (i.e. whether a VC’s pay tends to increase when their university performs better, and vice versa), there are so many complicating factors (differing lengths of tenure; the time it takes for a VC to effect change; changes in pay composition; universities falling down the rankings not because their performance has worsened, but because other universities’ performance has improved; external financial problems; and so on) that this does not seem worthwhile.

The extent to which any pay-performance link can be made also depends not only the duties of the VC — and the extent to which those duties have been successfully completed — but also, again, on the way in which performance is judged. Within the standard rankings, performance is assessed in a complex manner, taking all kinds of, sometimes subjective, factors into consideration. And many of the standard factors could be challenged — for instance, high spends on services could imply inefficiencies. This returns us to a discussion about purpose: to determine whether an institution is successful, it is necessary first to decide what it is it should be doing. To determine whether a leader is successful depends partly on that prior conclusion, and partly on the extent to which the leader has had (or is seen to have had) a positive effect in that way. That UK HE institutions are so varied makes it extremely difficult to compare and rank them. If institutions have different aims, they should be judged according to those aims.

As well as performance, it is also useful to take size of institution into account. Size is a less subjective distinction than performance, but a small highly specialised institution will have different aims from a small average one, and bigger institutions will have certain advantages — not least economy of scale — that might make it seem inappropriate or inefficient to pay their VCs substantially more. Relying upon arguments such as ‘my university is very big’, or ‘my university is near the top of x league table’ is clearly insufficient.

It is often argued that high VC pay is justified because VCs are players in a competitive market covering over 100 countries, and that UK VCs receive substantially lower average pay than their counterparts in America and Australia. But it is hard to know how many UK VCs have received offers to move to competitor institutions abroad, and how many would genuinely consider such a move; it is also clear that certain UK institutions provide a much bigger draw than others when attempting to attract top candidates from abroad. It is also important to recognise international variety. As there are significant differences within the UK system, there are also significant differences between (and within) international systems — not least when comparing the UK with America, where VCs have, typically, been more involved in fundraising and alumni relations, and where there is a clear distinction between public and private colleges.

According to the Chronicle of Higher Education, the eight highest-paid US private university presidents earned $2,000,000 or more in 2014, and the highest earned $5,449,405 (around £4,108,000).[23] In 2015, the eight highest paid US public university presidents earned $1,000,000 or more.[24] In August 2017, The Australian reported that, in 2016, average public university VC pay in Australia had risen to $890,000, that eleven VCs earned over $1,000,000, that the highest paid earned $1,385,000 (around £817,000), and that pay at the 38 relevant institutions ranged from $225,000 to $1,385,000.[25] The highest paid South African VC (of the universities revealing VC pay rates) is the head of Stellenbosch University, currently on a salary of R4.5million (around £260,000).[26] However, there has been much pressure on South African universities to reduce pay rates and general spending, since a high-profile student protest, ‘FeesMustFall’, in 2015.

That UK VCs earn significantly less than their counterparts in America, and somewhat less than their counterparts in Australia, clearly does not justify their levels of pay: it may be the case that their counterparts abroad earn far too much. After all, there is ongoing criticism of South African VCs, who, on average, now earn significantly less. Moreover, once again, it is important to remember the many differences between these institutions — and their locations — not least concerning living costs, and levels of public funding.

Another approach often taken in assessing UK VC pay involves employing comparisons with others UK sectors. In September 2017, Louise Richardson, VC of the University of Oxford, was widely criticised for attempting to justify her pay by claiming she earned less than footballers. If she was referring specifically to the average pay of Premier League footballers, then, at least, she was correct: the Global Sports Salary Survey 2017 reported this to be £2.4million per year;[27] the Daily Express calculated that Premier League team averages ranged from £954,000 (Burnley) to £5.77m (Manchester United), at the time.[28]However, Josh Tymon was reported in 2017 to be ‘one of the lowest paid players in Premier League history’,[29] on only £160 per week — considerably less than Richardson’s salary. And players in the lower leagues do not command anywhere near the same amounts as Premier League stars. But are these comparisons in any sense relevant? In that there is only a small, relatively fixed number of jobs both in the Premier League and at the top of UK universities’ managerial structures, there are some similarities. It is harder, however, to think of ways in which the duties of the people in these highly differing jobs might correspond.

Which jobs might be more suited to comparisons with VCs, then? Ministers? Judges? Heads of NHS trusts? And, if we accept that universities have many of the same obligations as businesses, then how are VCs paid in comparison with CEOs? If pay ratios are, in any sense, relevant in terms of wider societal fairness, then what can we take from the fact that the average VC is paid almost 10 times more than the average UK worker? (As above, the average VC earns £268,103 without pension contribution; the average UK salary is less than £30,000.)

Research in March 2017 by the Equality Trust, which analysed the 2015 Annual Report and Accounts for all FTSE 100 companies, found that average pay for the CEOs of these companies was £5,217,803.[30] That figure is almost 200 times higher than average UK pay, and the trust reported it to be 165 times more than a nurse’s pay and 312 times more than that of a care worker. The bigger the differentiation within the pay of those doing a certain job, the less directly useful this information is, but using the same approach, the average pay of a FTSE 100 CEO is 20 times more than the average pay of a VC. Comparing VC salaries with executive pay rates in schools might be more appropriate, however, not least owing to the public nature of the VC role, and any special civic expectations we might have for those in the field of education. Headteachers, who are paid on a official scale, which currently ranges from £45,213 and £111,007 (excluding London weighting), clearly earn much less than VCs.[31]Considering the relative scales of enterprise, however, comparisons with the CEOs of multi-academy trusts (MATs) might be more relevant. The highest-paid MAT head earned £420,000 in 2016, a figure not dissimilar to the highest-paid UK VC, but the former is generally taken as an understandable outlier.[32] Schools Week reported in March 2017 that average pay across the twelve largest academy trusts was £210,000, however — again, not much lower than average VC pay.[33]

Other points of comparison include the following: the average earnings for an NHS chief executive in 2016 was £172,000;[34] the highest ‘salary group’ on the April 2017 Ministry of Justice ‘Judicial Salaries’ scale was £252,079, and the lowest, £108,171;[35] the Prime Minister’s pay is currently £153,907; and, since April 2018, the basic annual salary for MPs has been £77,397.[36] Many executives receive considerable expense allowances and extra benefits on top of their salaries, however; an employee’s salary is not their entire cost to their employer. (At the extreme, the Prime Minister has vast security costs, for instance.) Nonetheless, these basic comparators are interesting. But what more than novelty can we take from the findings that the average VC earns significantly less than the average FTSE CEO or Premier League footballer, about the same as a judge in the highest MoJ salary group, and somewhat more than the Prime Minister or an NHS chief executive? Again, we would first need to assess what it is we expect from people holding those positions, and also — if fundamental justification is the aim — whether it is right that anyone earns such an extreme amount more than the average income in their society.

Two main themes re-emerge: purpose and variety. Dealing in averages is clearly unhelpful — there is vast variety within and without the HE sector. And we must also remember special expectations we might have for those in public roles, particularly when those roles are supported by public funding, or have a link to education. Any useful assessment of pay in the HE sector must be grounded with an awareness of these themes of purpose and variety. And so should any exploration of the application of pay ratios in general. If a pay-ratio approach is deemed appropriate regarding VCs, then, surely, to be consistent, similar considerations should be extended more widely: to the CEOs of private-sector companies receiving large amounts of public funding, for instance — and, particularly, those within the education sector (such as the companies providing technical services and resources in schools, which are paid for out of school budgets). This seems extremely problematic for many reasons, not least the extraordinary effort it would require, but it is the logical conclusion — or potential unintended consequence — of such an approach.

Perhaps more significantly, it is often asked whether it is right that so much money is spent on VC pay when many early-career academics struggle with low pay and the often precarious nature of their employment. Is remuneration throughout the sector fair? Is administration valued more than academia? In May 2017, the THE reported that, in 2015–16, the overall mean average full-time salary for the sector was £40,449, that the average pay of staff on academic contracts was £49,908, and that the average pay for professors was £79,030.[37] Again, it must be recognised that these average remuneration rates are partly tied to a national pay scale. The Single Pay Spine — which is nationally agreed via negotiations between the Joint Negotiating Committee for Higher Education Staff (JNCHES) and the Universities and Colleges Employers Association (UCEA) — covers most UK HE institutions: 148 universities take part in the annual negotiations. Since August 2017, the national spine has ranged from £15,417 to £60,410. Universities publish their own frameworks, which match the national spine, but are divided into pay grades, as no national grades are set. Pay grades differ between institutions, not least so institutions can to respond to their local market, and supplement basic pay to remain competitive. London weighting (inner, outer, and fringe) is also nationally agreed, and applied by relevant institutions, with a division between pre- and post-92 institutions. Universities also typically set professorial pay scales. Most institutions offer discretionary extras throughout, respond to bargaining, and professors can usually negotiate super-payments. Different universities have different systems, and it is worth remembering that a mid-career academic at a small, low-ranked university might earn more than someone at a comparative stage at Oxbridge — not least because Oxford and Cambridge can rely partly on knowing that academics will always be drawn to working there.

Most universities also employ some academics on hourly-paid rates. It seems generally understood within the sector that, although individual experiences differ vastly, working as early-career or part-time academic can be precarious and financially straining.[38] In response to such criticism, universities often claim that the ending of the awarding of block grants has brought instability to the sector, as there is no longer a steady income stream. It is also emphasised that it remains the case that researchers apply for projects or fellowships for a fixed number of years (the average salary for these jobs is within the £30,000-£40,000 bracket). Now that more students go on to doctoral study, competition is high, even though there are increasing numbers of institutions and posts. And policy changes throughout the wider education system can also cause volatility between subjects.

The future

Any need for a change of attitude towards pay or employment practices at the bottom end does not necessarily equate to a need for reforms at the top end, however. Reducing pay at the top is sometimes assumed to provide a quick route to improving overall finances, but the amounts saved, even by substantially cutting VCs’ pay, would not go far in increasing the salaries of those at the bottom.[39] There is also the serious fear of unintended consequences. The most obvious concern related to reducing VC pay — aside from unease about who it would be that would drive or enforce this reduction — is that the regulation or capping of executive pay would hinder institutions’ attempts to attract the highest calibre candidates.

However, it is clear that universities could benefit in certain ways from addressing remuneration from top to bottom, and that they should be made aware of such potential gains. Even though there is little to suggest that increased pay or wealth at the top of a society or organisation has a detrimental economic effect on those further down the distribution, there are other factors to consider. Legitimate questions remain regarding distributional equality’s instrumental value, in fostering social goods such as happiness, for instance. Overpaid (and commensurately paid) VCs being paid less might not have much effect economically, but resultant benefits to the sector — and the value of its civic messaging — could be substantial. And, in that ‘public’ universities remain largely public institutions, it does not seem inappropriate for citizens to have an interest in the remuneration of HE executives, not least because the sector continues to depend largely on general taxation. If universities were to choose to reduce executive pay — or, at least, to choose to clarify and justify their decision-making more transparently in cases of particularly high pay, as requested by the CUC — this could also send a unifying message to their students and workers, and particularly those facing financial hardship or insecurity related to their studies or employment.

Finally, it is clear that, rather than continued government tinkering around the edges of highly publicised HE problems, such as fees and funding, systemic faults could be addressed with a formal segmentation of tertiary education, to allow for a greater degree of specialism and competition. Treating all HE providers the same in terms of our expectations and the way in which their performance is judged is inefficient and societally detrimental — not least regarding the stretching of funding, and the disadvantage faced by applicants who are less informed about the relative merits of institutions. The sector is currently so over-extended, complex, and governmentally and bureaucratically driven that it is impossible to hope that fighting for the space for standard economically liberal principles to hold forth could lead to much improvement without serious change first, particularly in terms of funding. This may seem defeatist, but it is hardly surprising that half-hearted attempts to increase competition in the setting of fees have failed. A substantial rethink is long overdue.

Nonetheless, as long as universities remain to any extent dependent on the taxpayer it is hard not to conclude that we should have special expectations regarding the way in which they are run, and that there is a particular public interest in their spending and other financial activities. And, as long as we agree with Adam Smith that there is a need and justification for public education,[40] it is also hard not to conclude that we should have special expectations of the institutions and individuals providing such services.

[1] Higher Education and Research Act, 2017: https://www.legislation.gov.uk/id/ukpga/2017/29

[2] OfS, Vice-chancellors must justify their salaries, which will be published annually, June 2018: https://www.officeforstudents.org.uk/news-blog-and-events/press-and-media/vice-chancellors-must-justify-their-salaries-which-will-be-published-annually/

[3] Education: Historical statistics, House of Commons Library, November 2012: http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN04252#fullreport

[4] All but five of Britain’s universities are currently completely government regulated, and partly publicly funded. Although these ‘public’ institutions are responsible for their staff (who are not public servants, as is often the case in Europe), and have their own assets, their research and teaching standards are externally regulated, as are their funding and fee-setting arrangements.

[5] Institute for Fiscal Studies, 2018 Annual Report on Higher Education Spending in England (September, 2018), p. 65; https://www.ifs.org.uk/uploads/publications/comms/R150.pdf

[6] Claire Crawford, Estimating the public cost of student loans, Institute for Fiscal Studies, April 2014: http://www.ifs.org.uk/comms/r94.pdf

[7] See, for example: Jo Johnson: Delivering value for money for students and taxpayers, DfE, July 2017: https://www.gov.uk/government/speeches/jo-johnson-delivering-value-for-money-for-students-and-taxpayers ; Oxford Economics, The Economic Impact of Universities in 2014–15: Report for Universities UK, October 2017 ; and Education exports: estimating their value to the UK, BIS, June 2011: https://www.gov.uk/government/publications/education-exports-estimating-their-value-to-the-uk

[8] Martha Nussbaum, The education crisis and the depletion of democracy, ABC Religion and Ethics, February 2011: http://www.abc.net.au/religion/articles/2011/02/15/3139497.htm

[9] J.R.Lucas, What Should We Be Paid, The Oxford Magazine, 2013: http://users.ox.ac.uk/~jrlucas/itolduso/paid.pdf

[10] John Hicks, The Theory of Wages, Palgrave Macmillan, second edition 1963 (1932).

[11] ibid., 1.

[12] ibid., 4–5.

[13] ibid., 18.

[14] e.g., Alfred Marshall, Principles of Economics, Macmillan and Co, London, 1890

[15] New alternative providers will enter the market — and at an increased rate, following the changes set forth in the new HE Act — but it will take time for this to have any real effect on wages.

[16] The Higher Education Code of Governance, Committee of University Chairs, 2014: http://www.universitychairs.ac.uk/wp-content/uploads/2015/02/Code-Final.pdf

[17] Illustrative Practice Note 1: Remuneration Committees, Committee of University Chairs, 2015: http://www.universitychairs.ac.uk/wp-content/uploads/2014/12/IPN1-Remuneration-Committees.pdf

[18] The Higher Education Senior Staff Remuneration Code, Committee of University Chairs, June 2018: https://www.universitychairs.ac.uk/wp-content/uploads/2018/06/HE-Remuneration-Code.pdf

[19] ibid.

[20] See, for example, UCU, Transparency at the top? The fourth report of senior pay and perks in UK universities, February 2018: https://www.ucu.org.uk/media/9398/Transparency-at-the-top-The-fourth-report-of-senior-pay-and-perks-in-UK-universities-Feb-2018/pdf/VC_pay_and_perks_report_2018.pdf

[21] Julie Hare, Nobel-winning ANU V-C Brian Schmidt is one of our worst-paid, The Australian, June 2017: http://www.theaustralian.com.au/higher-education/nobelwinning-anu-vc-brian-schmidt-is-one-of-our-worstpaid/news-story/ee31bbb84adbbf2516f45530ee776317

[22] https://warwick.ac.uk/about/profile/finance/

[23] e.g. Karsten Strauss, The Highest-Paid Private College Presidents, Forbes, December 2016: https://www.forbes.com/sites/karstenstrauss/2016/12/05/the-highest-paid-private-college-presidents/#201d4710444e

[24] e.g. Laura Sonnenburg, The Highest-Paid Public University Presidents, Forbes, July 2017: https://www.forbes.com/sites/laurensonnenberg/2017/07/17/the-top-paid-public-university-presidents/#42a9feca114c

[25] Julie Hare, Uni vice-chancellors average salary package hits $890,000, The Australian, August 2017: http://www.theaustralian.com.au/higher-education/uni-vicechancellors-average-salary-package-hits-890000/news-story/f01aaa072fe5a7ceaa0c2d8154f282fb&memtype=anonymous

[26] Prega Govender, SA’s cash-strapped universities pay bosses multimillion-rand salaries, Times Live, November 2018: https://www.timeslive.co.za/news/south-africa/2018-11-11-sas-cash-strapped-universities-pay-bosses-multimillion-rand-salaries/

[27] Global Sports Salary Survey 2017: https://www.globalsportssalaries.com/GSSS%202016.pdf

[28] Michael Potts, Premier League wages confirmed: How much did every team spend last season?, Daily Express, May 2017:http://www.express.co.uk/sport/football/801919/Premier-League-wages-confirmed-Man-United-sportgalleries

[29] e.g. https://www.dreamteamfc.com/c/archives/news-gossip/139298/hull-city-lowest-paid-premier-league/

[30]Pay Tracker: Comparing Chief Executive Officer pay in the FTSE 100 with average pay and low pay in the UK, Equality Trust, March 2017: https://www.equalitytrust.org.uk/sites/default/files/resource/attachments/Pay%20Tracker%20%20-%20web_0.pdf

[31] https://www.nasuwt.org.uk/uploads/assets/uploaded/e2c3ba3f-20f3-410c-ae4b83329cbe3e4a.pdf

[32] The Harris Foundation is one of the biggest and most successful MATs.

[33] John Dickens, Academy CEO pay: Salaries soar, but who comes out on top?, Schools Week, March 2017: https://schoolsweek.co.uk/academy-ceo-pay-salaries-soar-but-who-comes-out-on-top/

[34] e.g. Francesca Robinson, NHS nurses, midwives, managers and directors pay scales for 2016/2017, HospitalDr: http://www.hospitaldr.co.uk/blogs/guidance/nurses-and-nhs-managers-pay-scales

[35] Judicial salaries and fees: 2016 to 2017, Ministry of Justice, 2016: https://www.gov.uk/government/publications/judicial-salaries-and-fees-2016-to-2017

[36] See, e.g.: https://www.parliament.uk/about/mps-and-lords/members/pay-mps/

[37] The THE also published a list of the institutions with the highest professorial salaries, as well as various pay gap calculations (by both gender and ethnicity).

[38] See, for example, UCU analysis within 2017/18 Joint Higher Education Trade Union Pay Claim, Unison, March 2017: https://www.unison.org.uk/news/article/2017/03/higher-education-unions-submit-2017-18-pay-claim/; and Richard Hall, The rise of academic ill health, Wonkhe, September 2017: http://wonkhe.com/blogs/the-rise-of-academic-ill- health/

[39] Similarly, claims that increased tuition fees are being used to raise VCs’ salaries are also somewhat superficial: one university executive claims that each student would only need to contribute £4.80 per year to pay their VC’s salary in full.

[40] Adam Smith, Wealth of Nations, Book V, Chapter I, Part III, Article II, Oxford University Press, 1993 (1776).