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University leaders commit to pension talks as strikes begin

University leaders have written to the University and College Union to formally outline their commitment to continuing to work with UCU to deliver long-term reform of the Universities Superannuation Scheme.

The move comes as UCU members at 60 universities begin strike action in disputes over both pensions and pay.

At a media briefing held on Thursday November 21, USS employers highlighted the various steps they have taken to keep benefits at the same level and protect the value of pensions for their staff, and their work with UCU over the last eighteen months.

Together with UCU, USS employers have commissioned advice from a Joint Expert Panel and used its recommendations to keep costs down. The second report of the JEP, which will be published soon, will also include options for long-term reform, including looking at valuation methodology and shared valuation principles for the future.

USS employers also highlighted that here has been a 50 per cent increase in the level of employer salary contributions to USS over the past decade. To ensure member benefits are protected in full, employers are paying 65p in every pound of the increased salary cost, an extra £250 million per year, they said. Scheme members are paying in 35p in every pound in increased costs, which works out at £7 per week for those on the average salary.

Carol Costello, speaking on behalf of USS employers, said: “It is not possible to change the 2018 valuation outcome, but many USS employers and scheme members want to see changes to the USS valuation methodology and scheme governance ahead of the next valuation in 2020.

“The Joint Expert Panel will soon publish its second report, including options for new methodology for assessing the financial health of the scheme. This should be the springboard to stepping up discussions which we hope will lead to greater confidence in the valuation process and governance arrangements.  We are calling on the union to work constructively with employers to deliver positive long-term changes to the USS scheme.

“Under pensions law, the scheme needs more money to keep benefits at the same level – which has always been a key demand of the UCU. Many institutions will not be able to afford a higher share of the contributions, and the costs and risks of this scheme are shared equally by all. We will continue to talk with the UCU, as we have done over the last 18 months, on a joint and fair solution to this pensions dispute.”

Union leaders have called on other vice-chancellors to follow the example of Professor Anthony Forster at the University of Essex, who recently suggested employers can afford to pay more for USS and should be doing more to avoid widespread disruption.

UCU warned that if universities failed to make improved offers then further waves of strike action could follow in the new year, with even more staff taking part. UCU has said it is currently consulting with its branches at other universities about being balloted again to join further action.

As well as eight strike days from 25 November to Wednesday 4 December, UCU members will begin “action short of a strike”, including working strictly to contract, not covering for absent colleagues and refusing to reschedule lectures lost to strike action.

UCU general secretary Jo Grady said: "It is quite staggering that the employers have allowed things to get to this stage and done so little to avoid the upcoming disruption. Instead of engaging seriously with us over the various elements of the disputes, they have been all spin and no substance.

"Universities appear to have learnt nothing from last year’s USS dispute, and are once again showing a dangerous level of complacency that completely underestimates the scale of anger amongst staff. Instead of wasting time playing games, they would do well to listen to people like Anthony Forster who have acknowledged that universities can afford to pay more to address these issues. It is time for university leaders to show some actual leadership."

USS employers have identified areas of common ground which they want UCU to support employers on. These include:

  • Reaffirming a commitment to receive positively the recommendations from the Joint Expert Panel’s second report, and – after seeking views from members and employers – agreeing jointly a set of reform proposals.
  • using collective influence to make the case to the USS trustee and, if necessary, The Pensions Regulator that they be accepted.
  • Using collective abilities to persuade the USS trustee and TPR of the merits of a longer-term view on risk for USS and its sponsoring employers.
  • An employer commitment to work with both UCU and USS to consider replacements for valuation methodology ahead of the 2020 valuation.
  • Being fully committed to enhanced transparency so that wherever possible information on the scheme is shared with the widest stakeholder audience.
  • Reaffirming the employer view that it is necessary and appropriate for the JEP to consider governance reforms and for the recommendations which it brings forward to be openly consulted upon.
  • To work together to consider candidates for the JNC chair, jointly appointing a successor to Sir Andrew Cubie, and to encourage closer working between the JNC and the USS Trustee board.
  • To use the resources of employers to provide evidence and backing to support the enduring status of the USS covenant which stands behind the defined benefit promises.
  • Taking all reasonable steps to avoid future contribution increases for USS members or employers.