Oxford University boss says vice-chancellor pay should not be regulated

Prof Louise Richardson said the focus of university bosses’ pay should be on the process of deciding salaries, rather than regulation.

Giving evidence to the Commons Education Committee, Prof Richardson, who has been vice-chancellor of Oxford University for two years, said universities are operating in a global marketplace when it comes to hiring leaders.

She told the cross-party group of MPs: “My salary, of complete emoluments, including pension, are less than were paid five years ago.

“On your other points, we are emphatically in a global competition. Cambridge, Kings, Imperial and Edinburgh just recently hired from overseas.

“Two best known universities in Australia, Melbourne and Sydney, just hired British academics.

“I don’t agree that regulation is appropriate, but I do think an interest in the process. I think the focus should be on the process.”

Oxford’s financial statements show that in 2016/17, Prof Richardson received a salary of £354,000, plus benefits of £12,000 and pension contributions of £64,000, making a total package of £430,000.

In 2011/12, her predecessor, Professor Andrew Hamilton, received emoluments of £371,000, plus pensions contributions of £53,000, making a total of £424,000. No further figures are given.

And in 2012/13, emoluments for the vice-chancellor totalled £380,000, plus £54,000 in pension contributions, making a total of £434,000. Again, no further figures are given.

Prof Richardson told the committee that she was confident that the process for deciding pay at Oxford, which is set by a panel of seven members, “is a model for the sector”.

“I’ve never attended the meeting or any part of it, I’ve never met with the group,” she said.

“I think it’s reasonable to have an interest in the process, but I think it should be ensuring the process is transparent and fair.”

Committee member Ian Mearns had asked a group of university leaders called to give evidence to the inquiry into university value for money whether there is a global marketplace, or whether “vice-chancellors now actually part of a racket where they’re all tied up in each other remuneration panels?”

Peter Horrocks, vice-chancellor of the Open University, said: “We have to acknowledge that this is a significant public issue and it’s something that potentially undermines the value of universities in this country, so it’s something we absolutely need to address.”

The pay committee at his institution has agreed to sell the vice-chancellor’s residence, and he has asked them to review his salary, he said.

Mr Horrocks said he does not sit on the remuneration committee.

He also said it would not be appropriate to regulate vice-chancellors’ pay because of the diversity in the sector.

Committee chairman Robert Halfon asked if salaries should be performance-related, saying that, for example, if the number of disadvantaged students at Oxford rose, and those students got good skilled jobs then “perhaps people would be happy with the significant salary that you have got”.

Prof Richardson replied: “We lead very complex institutions and it’s very difficult to reduce what we do to simple matrices.

“So in the example you just used, we have 38 colleges, six permanent private halls who actually do the admitting of students. I do not admit a single student, a single undergraduate student or indeed a postgraduate student, so that as a matrix wouldn’t be terribly helpful.

“I think the reduction of the complex, nuanced education we provide to starting salaries, or salaries at any point is a mistake. It’s to miss much of the most important things we do, which is provide an education.”

Committee member Michelle Donelan questioned whether regulation is the answer, arguing that higher education involves a different scenario than simply a free market, as universities are funded via the taxpayer through students.

“Surely it’s a bit immoral actually, to have these huge salaries that are higher than roles like the PM of the country, whilst you have students paying these high debts and taxpayers funding the system. Do you not agree?

“I actually don’t agree, because the PM is paid entirely by taxpayers,” Prof Richardson said.

“The amount the taxpayer contributes to the £2.2 billion annual operating budget of Oxford for teaching is 9%.

“If you include all the taxpayers’ money, including all the research funding, it’s still less than 20%. This is equivalent to private institutions in America. So there is a very real difference.”

University bosses’ pay has been under the spotlight, with growing concerns over spiralling salary hikes, with several high-profile figures, including ministers, calling for restraint.