Learning lessons in higher education

After decades of underfunding, the UK's beleaguered higher education (HE) system stands at a crossroads. Last year, the long-awaited study on pay and conditions from Sir Michael Bett revealed deep-seated problems in areas such as low pay, the casualisation of labour and gender discrimination (IRS Employment Trends 685)¹. But little progress has been made since the report's appearance.

Here, we take a closer look at these problems and ask a leading trade union, the main employers' group and a personnel manager caught in the middle what they think of the current employment situation in HE. We interviewed Malcolm Keight, assistant general secretary of the Association of University Teachers (AUT); Peter Humphreys, chief executive of the Universities and Colleges Employers' Association (UCEA); and Derek Cowley, the personnel manager at the UK's largest HE institution, the Manchester Metropolitan University.

Our study analyses:

Comprising both the "old" (pre-1992) and "new" (post-1992, or ex-polytechnic) universities, HE colleges and institutions, and specialist medical, legal and business schools, the sector is a major player on the UK employment scene, with a total of 301,000 staff. But the extent of non-standard working is widespread: according to Bett, one-third of staff work part time, while over one-fifth are on local pay rates, a similar proportion are employed on fixed-term contracts and over one in 10 works casually or on an hourly-paid basis.

Employment practices vary widely across the sector. According to the UCEA: "There are very different approaches to HR issues. They range across the spectrum from institutions that give a relatively low priority to people management, to others that are well focused on these issues." The Bett report stated clearly that the management of people needed to be given greater priority at all levels of the HE system - from government departments downwards - and that personnel departments should be "bolstered" where necessary.

Bett - a ticking time-bomb?

Published in June 1999, Sir Michael Bett's Independent review of higher education pay and conditions (more commonly known as the "Bett report") brought employment in HE to the top of the political agenda. His main conclusion, that the Government needed to commit an extra £380 million a year if universities were not to "go down the drain", resonated dramatically with those employed in the sector.

Comprising five union, five employer and five independent representatives plus the chair (Sir Michael), the Bett committee was established in January 1998. Its 61 recommendations, covering the whole spectrum of employment in HE, were cautiously welcomed by employers and unions. Inevitably, though, there are major areas of disagreement and differences of interpretation.

Although the Government is not bound by the report and its funding implications, Bett's blunt portrayal of a system under tremendous pressure has put the Blair administration on the defensive. The report's key findings suggest that:

While there was much that higher education unions - the AUT, EIS, GMB, MSF, NATFHE, TGWU and Unison - could relate to, some of Bett's proposals, notably on performance pay and job evaluation, have not been well received by all of them. In addition, unions representing support staff, such as Unison, are opposed to the proposal for two separate pay spines because, in the union's view, it panders to elitism and a "them and us" attitude. Overall, though, most unions welcomed the report as long overdue. According to the AUT: "Readers of the report will doubtless find much they dislike ... but the status quo is not an option."

Elements of the Bett report - notably in the area of job evaluation and simplification of collective bargaining arrangements - have also been greeted by employers with a degree of enthusiasm. But the resourcing and funding implications of Bett's findings, particularly on pay, concern employers that have to operate within the financial straitjacket imposed by central government.

The great pay divide

As the Bett study acknowledges, pay is the biggest issue in HE - one to which all other employment issues are intimately linked. Unions have long complained that pay rates in the sector have fallen well behind those elsewhere in the economy, and, significantly, those in other parts of the public sector.

Evidence for this is widespread. The independent Hay/Borrie report in 1997 showed a significant decline (of around 20%) in HE earnings relative to other sectors. Last year, the Bett report presented an even bleaker picture, finding that pay in the sector had fallen 30% below that for comparable groups over the previous 18 years.

In an attempt to take some heat out of the situation, the Government announced an extra £100 million for higher education in 2001/02 in its July comprehensive spending review (CSR), of which half was earmarked for pay. Unions, however, regard this as too little, too late. According to NATFHE (National Association of Teachers in Further and Higher Education), the funding injection is "particularly disappointing because it is a tenth of the £500 million increase recommended by Sir Michael Bett".

The AUT, meanwhile, believes the only way for earnings anomalies with the economy as a whole to be addressed is through an independent, national pay review body similar to those used for doctors, teachers and nurses. But despite enlisting the support of 162 MPs, the union is unlikely to achieve this aim, at least in the short term. The UCEA says that "there is no realistic chance of getting one" and states that in any event: "There is no realistic chance that the Government will fund the outcomes of a statutory body."

By contrast, employers want a flexible national system that accommodates the needs of different labour markets, a proposal unions fear would degenerate into local bargaining. The UCEA's desired approach is for "local pay determination/bargaining within a flexible sector-wide framework", which it says "would involve using an enabling national agreement to produce an approach to pay and/or conditions of service that is in harmony with an institution's own culture and financial circumstances and is flexible enough to cope with future changes, should a university's senior management wish to achieve change in the future".

Recruitment implications

Unions representing academic employees believe that the pay differentials that have opened up between HE and the UK economy as a whole are leading to serious staffing problems, an opinion broadly shared by the UCEA. According to the AUT, established staff are leaving for the private sector, where their earning potential is much greater, while recruiting the brightest postgraduates on the starting salaries being offered is increasingly difficult.

In a similar vein, NATFHE says that recruitment and retention has become more difficult over the past four years, squarely blaming the Government and what it describes as the "low-quality employment model" in the sector. "It is hardly surprising that lecturers are voting with their feet - the higher education sector is grossly underfunded and staff feel increasingly unvalued ... the only solution to such dire recruitment and retention problems is a substantial cash injection by the Government to redress pay gaps with the private sector. Otherwise, a crisis is inevitable," the union states.

Belatedly, the Government is beginning to listen. According to education and employment secretary David Blunkett, the purpose of the £50 million provided in the CSR to boost pay is "to recruit and retain top-quality academic staff in an increasingly competitive global market for people and ideas".

The overall cash injection provided under the CSR has meant that, for the first time in 13 years, the level of funding for each student in HE - the so-called "unit of resource" - has not fallen. However, it looks likely that Blunkett's 2.5% increase will be offset by inflation this year.

Equal work, unequal pay

If pay in general is an emotive issue, widespread earnings differentials between men and women - and, to a lesser extent, between white and ethnic minority employees - have made the cocktail even more volatile. According to research carried out by the AUT and widely reported in the national press, women in academic and related jobs were being paid 18% less than male equivalents in 1998/99, an increase on the 17% recorded the previous year (Pay and Benefits Bulletin 477). NATFHE's research has produced similar findings, with women academics earning on average £4,000 a year less than their male counterparts.

Not surprisingly, the Bett report warned that many HE institutions were vulnerable to claims for equal pay for work of equal value. It advised that all institutions should have (and make public) a clear policy statement on equal opportunities, and should consider setting targets appropriate to their own circumstances.

Whatever happens, it looks like being an expensive business. Successful claims in employment tribunals could open the floodgates, while the cost of rectifying the equal pay anomaly immediately, according to the AUT, is £188 million. Its assistant general secretary, Malcolm Keight, says that the recently agreed framework for partnership on equal opportunities "must be made to work by higher education institutions if we are to have any real impact on the appalling degree of inequality which currently exists"(See Landmark agreement reached on equal opportunities in higher education ).

And discrimination is not just rife in the area of pay. A greater proportion of women and ethnic minority groups are employed on a casual basis (see below ), making them even more marginalised.

Casual is not smart

One of the strongest messages contained in the Bett report concerns the casualisation of much of the HE workforce, both in terms of professional and support staff. "There is scope for many HE institutions to reduce their use of fixed-term and casual employment," the report concluded. Some estimates suggest that the proportion of HE employees employed casually or on fixed-term contracts is second only to the catering sector.

Evidence to support this claim is not difficult to find. Data from the Higher Education Statistics Agency (HESA), for instance, shows that the proportion of academic staff on fixed-term contracts had risen to 42.2% in 1998/99, including 49.9% of all women academics. These figures are even higher than those cited by Bett, which suggest that just over one-third of staff are either employed casually or on fixed-term contracts.

Casualisation has traditionally been high on the agendas of HE unions, and some progress is now being made to reduce its extent - even employers now accept this is an important objective. In July, the UCEA and HE unions (with the exception of the AUT) ratified a new partnership agreement designed to reduce fixed-term and casual employment, both for professional and support staff. The key recommendations of the joint working group - A guide to good practice on fixed-term and casual employment in higher education - are included in the box below.

The new guiding principle, it seems, is that casualisation is acceptable only where there is an overriding operational requirement for using it and where there are "transparent, necessary and objective reasons for doing so". Both sides accept that a proper balance is required between flexible working and organisational efficiency on the one hand, and security of employment and fair treatment of employees on the other. This means that where employees are on fixed-term contracts, they should be given the same rights as those employed indefinitely, and, by extension, the "normal" pattern should be for staff to be employed on indefinite contracts.

According to Declan Leyden, assistant director of the UCEA: "The strength of this agreement is the balance it strikes between fairness for employees and efficiency for universities and colleges. It illustrates a new partnership approach in the post-Bett era and we hope the AUT will join us in the future. All university staff will benefit from the good practice outlined in this agreement."

Managing workloads

Regardless of the basis on which HE staff are employed, another perennial gripe of unions concerns the rising workloads that face those in the sector. The AUT believes that a number of factors - underfunded expansion of student numbers, requirements to make "efficiency gains" and externally imposed bureaucratic requirements - have pushed up the number of hours its members work in a typical week.

It cites studies that show that academic staff routinely work excessively long hours, undertake research duties in the evenings and at weekends, and spend more time on administration than on teaching or research. The AUT believes that increased workloads are compromising the quality of service delivery and work, and are undermining the health and wellbeing of staff. According to legal advice obtained by the union, the "unmeasured working time" exemption from some of the provisions of the Working Time Regulations 1998 (See Beating the clock and Industrial Relations Law Bulletin 630) does not apply to academic and related staff in HE, and it is probable this will be tested in employment tribunals sooner rather than later.

Meanwhile, a study of part-time university teachers undertaken by NATFHE reveals an embedded culture of working outside contracted hours. The union's September 2000 survey of working conditions at a London university suggests that part-timers are "routinely exploited", with nearly nine in 10 lecturers regularly undertaking duties for which they are not paid.

The AUT says that improvements in workloads are "long overdue". Working in tandem with other unions, it wants to see agreements that protect quality and are "compatible with the professional work ethic of self-management rather than managerialist regulation".

Job evaluation

One way HE employers believe they can make sure workloads are better managed is through a process of job evaluation, which the Bett report says should be introduced to facilitate reform of pay and grading structures. The UCEA's Education Competencies Consortium (ECC), for example, has developed what it calls the Higher Education Role Analysis (HERA) scheme, and believes this is a suitable system. However, the UCEA also accepts that individual HE institutions should be free to carry out job evaluation exercises tailored to their needs.

The AUT, however, is implacably opposed to job evaluation, both in principle and in practice. The academics' union regards it as a "subjective and inadequate means of measuring job size" and is particularly critical of the Hay points system, which is being deployed by a number of UK higher education establishments (IRS Employment Trends 677). The AUT says the methodology employed by Hay fails to pick up on the fluid nature of academic jobs and skills-sets, which change - sometimes dramatically - as new research, theories and events emerge.

Unison, on the other hand, has been a keen supporter in principle of job evaluation in the HE sector. In its evidence to the Bett committee the union said: "Unison supports in principle the idea of a uniformly designed and applied analytical job evaluation as the most suitable mechanism for allocating jobs or roles and grades to [our] proposed single spine."

Despite its philosophical difference with the AUT over the concept of job evaluation, Unison has found common cause with the academics' union, and the other HE unions, in opposing the employers' attempts to introduce job evaluation in practice.

In a letter to branches in June 2000, Elaine Harrison, Unison's national secretary for education services, said: "Unison believes that any scheme adopted should be applied to all staff groups with nationally agreed guidelines and pay scales... [We have] been advised that some institutions want to move ahead locally and implement HERA, usually only for some groups of staff. However, in the absence of a national agreement, Unison's policy of non-cooperation with the implementation of HERA continues."

NATFHE's advice to its branches, sent in December 1999, is equally robust: "NATFHE, along with the other HE unions, has made it absolutely clear to the Education Competencies Consortium, the body responsible for developing HERA, that any [local] attempts to introduce job evaluation and thereby pre-empt national negotiations over Bett will be resisted. If your branch is approached please contact your regional official for advice." The union says that it is critical of HERA, partly because of "inadequate negotiation and consultation with the unions over its development".

Hence it may be some considerable time before job evaluation takes place across the HE system as a whole. As our snapshot of the university personnel manager shows, the resourcing implications of such an exercise, in terms of cost and time, are likely to be huge. In an already cash-strapped environment, this, along with union non-cooperation, could see job evaluation put on the back burner.

One area, however, where the unions would like to see more management activity is professional development. Picking up on comments in the Bett report, which said it was "clear that there are glaring gaps in staff development", the AUT argues that levels of investment in training in the sector are "below most other advanced areas of the economy". It remains to be seen whether or not Bett's core proposals in this area - that HE institutions should seek Investors in People (IiP) accreditation, introduce staff appraisals and provide occupational and IT training - will be adopted by employers across the board.

¹"Independent review of higher education pay and conditions: report of a committee chaired by Sir Michael Bett", available from the Stationery Office Publications Centre, tel: 0870 600 5522, price £39.95.

Principles underlying good practice

The successful application of these principles depends on recognition by institutions and staff that:

Equality and fairness

In addition to achieving a proper balance between flexible and efficient working and fair and secure employment, the working group was also concerned to raise awareness in two particular respects. Statistical evidence suggests that a greater proportion of women and ethnic minorities are employed on fixed-term and casual contracts. It is important that institutions bear this in mind and review their use overall to ensure that the principle of non-discrimination is applied rigorously. Secondly, a potential abuse arises from the use of successive fixed-term and casual contracts. Clearly, if the objective reason for use of a fixed-term or casual contract is the short-term nature of the work, this justification must be called into question where the fixed-term or casual contract is repeatedly renewed and the overall duration of the employment is substantial.

Objective reasons for fixed-term and casual contracts

It is essential that there are transparent, necessary and objective reasons for placing a post on a fixed-term or casual contract. Institutions should discuss with the recognised unions the circumstances in which they - in light of their own individual requirements and resources - would use fixed-term and casual contracts. Necessary and objective reasons or circumstances could include:

Source: "A guide to good practice on fixed-term and casual employment in higher education", higher education joint working group. The report can be found on the AUT's web site: www.aut.org.uk

Snapshot 1: The personnel manager

To get a handle on how the issues raised by the Bett committee are affecting practice at the sharp end, we spoke to Derek Cowley, personnel manager at the Manchester Metropolitan University (MMU). The MMU is the UK's largest HE institution, with over 30,000 students and a total of 4,000 employees.

For Cowley, one of the biggest issues facing the personnel profession in HE is job evaluation. "To ensure a sense of fairness, I think this is an important step forward. It would provide a systematic approach to grading and reward, enabling us to match pay to jobs in the local economy. Because it would treat staff fairly, it would help to improve employee relations. In addition, it would protect the university from equal work/equal pay claims."

However, he expresses doubts about the methodology of UCEA's Higher Education Role Analysis (HERA) job evaluation system, which is designed to rank all HE jobs from cleaner to professor. He believes it would be difficult, for example, to accommodate some of the existing teaching jobs into the HERA model, and its application would lead to clusters of jobs, rather than a spread. But Cowley says the same criticisms might apply to other job evaluation systems such as the Hay scheme, which is being used elsewhere in HE: "We are effectively developing a league table of jobs."

On top of these considerations are the resource implications of any job evaluation exercise. The grading of some jobs would go up, increasing the paybill, while unions would want those going down to be red-circled. "There would inevitably have to be an appeals process," says Cowley.

Besides these costs, the amount of management time accounted for by job evaluation would undoubtedly be significant. "It would be very labour intensive, as we have about 1,000 distinct jobs in this organisation," Cowley says. Naturally, unions would want to be involved in the process, and Cowley foresees prolonged discussions. Much, of course, would depend on how the grading structure changed. "There would be lots of pain in moving down to three- or four-point scales," Cowley believes.

None of these changes will happen overnight. Cowley expects a five-year time span for any major reform of employment practice at the MMU. In terms of job evaluation, he says there would probably be a pilot study first, lasting around a year, followed by "lengthy" negotiations.

Pay and recruitment

"The immediate issue following Bett is about future pay bargaining - whether it should be local, or whether, as now, it should be national," Cowley says. He believes there are arguments for and against each. National bargaining, he comments, takes advantage of economies of scale and simplifies negotiations with unions, but can be detrimental in terms of ignoring local labour market factors and local bargaining issues.

Cowley says that the 30% pay deficit identified by Bett "may well be true". And it is not just academics who have fallen behind: some support staff are lower-paid than their counterparts in local government.

Despite this, Cowley does not report any generalised recruitment and retention problems, either for academic or support staff. He acknowledges that this may be because unemployment in the north west is relatively high, but the situation is generally favourable nonetheless. "Staff turnover is low, and we have no problems recruiting," he says. "We usually succeed in getting good candidates - shortlists are reasonably competitive." But Cowley accepts that the quality of candidates would rise if pay rates were significantly higher. This is particularly true in the field of IT, where, as in many organisations - both public and private sector - recruiting has been difficult.

According to Cowley, the incidence of casual working at his institution is limited. "We have tried to keep a firm hand on the use of fixed-term contracts," he says. Many staff employed on annual fixed-term teaching contracts "come back year after year" and enjoy employment rights such as protection against unfair dismissal.

Snapshot 2: The union official

To gauge the approach of the higher education unions, we look at the position of the Association of University Teachers (AUT), which represents over 40,000 academics, mainly in pre-1992 universities. We questioned Malcolm Keight, the union's assistant general secretary.

After many years of what it describes as the "underfunded expansion of higher education", the AUT believes there needs to be a sea change in the way its members and other HE staff are treated.

The starting point must be pay. Keight points out that the Bett report concludes that there are major problems with both the level of pay for academics - particularly starting salaries and rewards for professors - and the structure of pay, with the discrepancy between the earnings of men and women being a particular concern.

He estimates that putting Bett's recommendations on pay into practice would add around 9% to universities' paybills. There is little chance of this happening. "While the financial position of universities is better than it has been for some years, they are a long way short of being able to afford this," Keight says.

Recruitment problems

Low levels of pay relative to similar occupational groups elsewhere in the economy are having a serious impact on recruitment and retention, Keight believes. He says: "These problems are not going to be resolved by tinkering with salaries - for someone of 27 or 28 who is qualified up to PhD level, a starting salary of around £18,000 is simply not enough. If we are not offering sensible salaries, then what kind of quality of field are we going to be looking at?"

The AUT does not share the sanguine view of employers on the recruitment situation; Keight says a crisis is developing. He is critical of the absence of useful recruitment information within the university system, and of the lack of transparency concerning the "clamour to get high-profile academics". However, he acknowledges that the survey undertaken by the Committee of Vice-Chancellors and Principals (CVCP) - pointing to recruitment problems in major areas - is useful. One of the main problems, Keight says, is the age profile of much of the academic workforce: many are approaching retirement, "but are not being replenished".

The well-documented gulf in earnings between men and women will hardly help the recruitment cause either. After detailed research, the union succeeded in bringing this issue to national attention and increasing its prominence on the political agenda. "It is a major problem which needs to be remedied quickly," according to Keight.

He says there are also equal opportunities issues in a broader sense in HE: ethnic minority staff are underrepresented in universities, and many experience discrimination. The AUT is concerned that many institutions do not embrace diversity, but rather have a very closed approach. This is something that secretary of state David Blunkett has picked up on, with HE funding councils adopting an "equality challenge" to encourage institutions to address equal opportunities problems.

Casualisation is another major concern of the union. "We are very dissatisfied with the efforts being made to improve the situation," says Keight. Indeed, the AUT did not ratify the final report of the joint working group (A guide to good practice on fixed-term and casual employment in higher education), an extract from which appears above. Keight says that elements of the study merely legitimise current practice. "The reliance on fixed-term contracts must be reduced," he says. The situation, the union believes, is very grave: "There is even some evidence that one higher education institution is preventing people on fixed-term contracts applying for new positions."

While Keight says that there is a "crying need for a fair and transparent grading system", the AUT does not believe that job evaluation would facilitate this. It criticises the HERA system, based on traditional techniques, for being too rigid and not taking into account the constantly evolving roles academics undertake. It also questions the efficacy of other job evaluation systems, such as the Hay model, for this reason.

Snapshot 3: The employers' representative

To evaluate the overall position of employers in higher education, we spoke to Peter Humphreys, chief executive of the Universities and Colleges Employers' Association (UCEA). An agency of the Committee of Vice-Chancellors and Principals (CVCP), the Standing Conference of Principals (SCOP) and the Committee of University Chairmen (CUC), UCEA was formed in 1994 and has 162 member institutions.

According to Humphreys, the implications of the Bett report fall into two categories. The first concerns funding: significant extra resources are needed if Bett's recommendations are to be implemented. "To take Bett forward using his figures, we estimate £467 million per annum is needed - for modernising pay structures, increasing salaries to meet recruitment and retention problems, and to provide money for staff development and training," Humphreys says. Following the comprehensive spending review, which saw an extra £50 million for Bett-related issues, the UCEA, with CVCP and SCOP, is in discussions with the Government about extra funding for 2002/03 and 2003/04.

The second post-Bett issue, says Humphreys, concerns discussions with higher education unions about reform of national bargaining arrangements. The UCEA is currently talking to the trade unions (who are being coordinated by the TUC) about this. "We are asking: 'How can we form what Bett calls a national council, and what are its terms of reference?'"

Not surprisingly, the whole question of future bargaining machinery is an emotive one. The trade unions want to continue with what is essentially a national mechanism to cover both pay and conditions for all staff (all staff are presently covered, with the exception of the non-pay terms and conditions of the pre-1992 universities' academic and academic-related staff, and clinical academics), while the majority of UCEA's member institutions want future national bargaining to be restricted to pay, with all other terms and conditions being handled locally.

While this debate is likely to rumble on, the UCEA does acknowledge some of the unions' grievances in relation to recruitment problems, pay, and equal pay for work of equal value.

In terms of the former, Humphreys says joint research carried out with the CVCP, SCOP and the funding councils shows that the problem areas are getting worse. These fall into three main categories: attracting the brightest of each generation of postgraduates into HE; attracting seasoned professionals from sectors such as general education, medicine, law and economics; and attracting the right calibre of support staff.

Humphreys accepts that casualisation in the sector is something of a hindrance, and is keen that action is taken to make HE more attractive in the labour market. "We are not yet in a critical situation like the NHS," he says, "but on the other hand, localised difficulties can easily turn into national problems. Why wait until we drop off the cliff?"

The UCEA acknowledges that some pay levels need to increase. "We accept the analysis of Bett on pay, which is based on sound research," says Humphreys. "But it needs to be pointed out that Bett is not saying that everyone needs a big rise - his study found that many academics are paid around the median relative to comparable groups in the public sector."

But the UCEA is worried about the likelihood of claims under the legislation on equal pay for work of equal value, which it says is a "distinct problem". Humphreys comments: "One area where the sector has major difficulties, like many other areas of the economy, is equal pay for work of equal value. This is due to the multitude of different pay structures and the anomalies that arise from this." He believes that the reduction in the number of pay spines (currently 10) and the introduction of job evaluation across the sector will help.

The latter suggestion does not appeal to all of the HE unions, but the UCEA is convinced of its value. "We would recommend the HERA job evaluation methodology, but acknowledge the utility of other products," says Humphreys. "Whatever system institutions end up using, they need to have an objective, analytical basis for grading jobs."