Associate Professor, School of Law, University of Warwick
We are in the midst of the largest industrial action in the history of UK higher education, with massive walkouts from academic and professional services staff across 61 universities across the country since the end of February. If there is no resolution, another 14 days of strike action have been called for by the Universities and Colleges Union (UCU) to disrupt the key exam season in Term 3. This is looking increasingly likely as UCU branches across the country overwhelming rejected a proposed agreement reached between UCU negotiators and the Universities UK (UUK) on Monday evening. The strike is technically over staff pensions but the dispute is more than just the value of our retirement income. The widespread support for the industrial action by staff and students across the sector also reflects concerns over the undermining of the universities’ public goods mandate that these pension changes will bring about.
The dispute centres on proposed cuts to the Universities Superannuation Scheme (USS) which will would severely cut pensions for staff upon retirement (by up to £200,000 or an estimated £10,000 a year over 20 years). This is primarily due to employers’ proposals to shift the pension scheme away from its current ‘defined benefit’ (DB) system to a ‘defined contribution’ (DC) system. Under a DB scheme, members of the scheme are assured a guaranteed income upon retirement. Under a DC scheme, retirement entitlements fluctuate based on how well the investment pot has done at the time of retirement. The USS scheme has already been overhauled in the past decade , with pension entitlements previously reduced shifting the DB element from a ‘final salary’ scheme (where retirement income is based on the member’s salary on retirement) to a ‘career average’ scheme (where retirement income is based on average earnings throughout a member’s career) and by introducing a DC element for income above the threshold of £55,000 a year.
A key feature of the USS DB scheme as it currently stands is its collective nature, described by Gurminder Bhambra as ‘one of the last collective aspects of the public university system’ in which all member universities are ‘collectively responsible for the pensions liabilities of all other institutions’. The move towards a DC system will end this collective responsibility as the financial risk of investments is transferred from the employers to employees and universities are no longer collectively responsible for each other’s financial health and retirement obligations to staff. It is no surprise that larger universities, such as Cambridge and Oxford, views the risk-pooling characteristic of the current DB scheme as undermining their competitiveness by allowing their weaker competitors to access commercial financing in a way that would not be possible without this collective underwriting of pension liabilities.
This divesture by universities of their collective pension liabilities will have far-reaching consequences for the future of UK higher education and pave the way towards the privatisation of UK universities. Freed from their collective pension responsibilities, individual universities would be able to leverage this new-found financial freedom, underpinned by a government-backed income stream of student fees, to raise more money for capital expansion from private financial markets. Thus, the marketisation of UK higher education, which began with the introduction of tuition fees (and subsequent tripling of such fees to the tune of up to £9,000 a year) for home and EU students, will be intensified as universities increasingly view themselves as competitors rather than collaborators. Rather than driving improvements in teaching quality and student learning, competitive dynamics over ‘market share’ in higher education tend to have the perverse effect of reducing the time available for academic staff to prepare for teaching, to develop innovative and experimental learning methods, and to produce the world-leading research on which such teaching relies.
Universities, already encouraged by successive governments to move towards corporatisation, will only lean more on university staff to extract greater ‘value for money’ from their labour while extending themselves further into debt to pay for more shiny buildings, sports complexes, high-tech ‘learning platforms’ and other vanity projects in expectation that this will attract the requisite student numbers (and attendant fees) to pay off this debt and so on. In this competitive environment, financial projections can turn sour as my colleague, Stephen Connelly, cautions and over-borrowing on capital markets based on ambitious but flawed bean-counting could potentially lead to a financial crisis in the UK higher education sector not unlike the US sub-prime mortgage debacle that kick-started the global financial crisis ten years ago.
In a cooperative system where institutions are collectively responsible for their financial health, universities remain incentivised to look out for each other and the academic, financial and social integrity of the sector as a whole. This includes establishing common benchmarks for assessments (including the often derided but much respected external examining system) and academic progression and adhering to more or less standardised frameworks for pay and promotions, underpinned by a collective bargaining framework between universities and trades unions. The current interdependence of universities necessitates cooperation even where the economic pressures push university managers in the direction of competition. In the wild west of privatised higher education where money talks and the fittest survive, these new incentives encourage universities to opt out of these broader collective systems and collective institutional oversight in pursuit of greater market share. These flawed incentives are based on a logic of competition which limit the public goods function of universities in favour of a narrow conception of their role as providing private benefits to students (measured in terms of graduate pay and employability).
At the heart of this pensions dispute is therefore a broader concern about the future of the UK higher education and a conversation about the value of the academy itself. University staff, especially academics (those most at the frontline of teaching, research and, often, the pastoral care of students), are understandably furious that our pensions are seen as liabilities rather than investments and that our retirement income (which we prefer to view as our deferred salaries) are seen as an expendable budget line worth less than estates expenditure. The couching of staff pension costs as a drain on university finances that have to be reduced and transferred out to facilitate greater capital expansion diminishes the fundamental role of academics and professional services staff to universities, placing us on the same footing as the construction of a new conference centre. This comes in the context of a creeping intensification of workloads as the sector becomes increasingly commodified and dangerously casualised with ever more teaching and research staff being hired on short-term and precarious contracts.
At the same time, we are also increasingly governed by an ever-expanding framework of metrices – the National Student Survey (NSS), the Research Excellence Framework (REF), the Teaching Excellence Framework (TEF) and the latest proposed price comparison-type degree ratings – which add not only to the stress and bureaucracy of our daily jobs but also creates perverse incentives for university managers in the areas such as promotions and appointments. Like other forms of ‘governance by numbers’ such research and teaching metrics tend to be based on ‘bad science’, whereby post-university ‘outputs’ such as employment prospects and graduate earnings of students are used as misleading proxies for ‘teaching excellence’ despite the highly complex relationship between the quality of university education and other individual and structural factors, such as race, class and gender.
All these developments only serve to atomise the inherently collaborative nature of academia as each individual and each institution begin competing in this ‘dog-eat-dog’ world of winner takes all and loser gets a cupcake. And yet, as a recent study revealed, the academic ecosystem relies highly on the goodwill of its members. From public engagement and recruitment activities to the mentoring of students and colleagues, from journal and grant application peer reviews to sitting on university committees and the aforementioned external examining, many roles in academia are performed by individuals not for professional prestige or financial remuneration but as a collective responsibility to our community of scholars. It is only right that in this highly collective and interdependent nature of our academic work that our employers continue to assume the collective risk of our pension entitlements. Surely universities owe a duty not only to their direct employees but to the scores of employees from other institutions upon whom they draw their voluntary labour from to carry out the tasks that oil their own machinery?
One of the heartening outcomes of this long strike has been the reclamation of the public space of universities in the consciousness of those who work in them. From the widespread camaraderie on the picket lines and social media to the solidarity of academic boycotts of institutions taking a hard line on striking staff, the pension strikes have demonstrated to many that academia remains a collective space and one that is dedicated to the furtherance of an agenda beyond the narrow ‘private benefits’ approach limits set by proponents of its marketisation and privatisation. Don’t get me wrong, there remains significant structural problems at UK universities which need to be addressed, notably the aforementioned gender and racial discrimination and the need to diversify and decolonise university curricula, but this can only be challenged where there is a commitment to public interest.
The redistributive element of the current DB pension scheme ensures that the cost of providing higher education as a public good is shared across institutions so that universities’ broader social objectives – an informed and educated polity, social mobility, publicly accessible research and knowledge production – are maintained across the sector and by a broad range of providers. It also ensures that structural asymmetries within the labour market and the pension system, including gender and racial discrimination, are mitigated somewhat through the collectivisation of risk. Doing away with the current pension scheme also does away with the public character of UK universities as we understand them today. Winning this pensions dispute is therefore necessary for us to begin reclaiming this public mandate of universities and preventing the reduction of the sector into an education supermarket.
 With thanks to Andre Broome, Associate Professor of International Political Economy and Alexandra Homolar, Associate Professor of International Security, Department of Politics and International Studies, University of Warwick.