Time for an update on Head of Provider Pay?

We have had various rounds of anger about Vice-chancellors’ pay. Back in 2017 this was focused on Bath, and at the time I worried that there was some snobbishness going on, even though Bath had done well in league tables and was winning prizes.

Well, now we have a regulator that has incorporated a range of providers into its systems, which includes disclosing information on senior staff pay. This offers an opportunity to look across a much wider range of providers for comparison

Let’s look at a private provider. It makes some play that it is run on a not-for-profit basis. It’s on the OfS register as ‘approved’, has a 2023 TEF outcome and its financial statements for 2121/22 say that it has 1,196 FTE students. They are charged a maximum of £6,165. Turnover (ie income) reported for 21/22 was £7,363,595 (which is exactly what you’d expect for 1194 students paying £6,165). The provider made a profit before tax of £2,474,971 – which is 33.6% of the income. That was available for reinvestment (this is not-for-profit).

The provider is managing to teach its students on a variety of HNC/D and degree top-ups spending two thirds of the £6165 fee. The financial statements shows that it spends 22% of income on staffing, but there’s a note that 25-30 self-employed teachers and other technicians are additional to that (sales and administration is a term used in companies house accounts and won’t mean those staff are all in marketing).

That brings us back to the issue of the pay of the head of the provider. It notes the necessity of having regard to the CUC remuneration code. The directors do not consider the salary of the CEO to be ‘excessive’ and, by way of explanation they also ‘consider it to be comparable to other officers in this position’.

The CUC guide talks about choosing comparators carefully. They note:

Remuneration Committees need to consider market position – typically by looking at a set of comparator institutions/organisations. The choice of these comparators will usually be linked to institutional strategy.

CUC The Higher Education Senior Staff Remuneration Code p5

I can’t immediately find a remuneration committee report, but I’ve chosen my own comparator to consider. The provider’s degrees are all awarded by one university. The 2021/22 financial statements show that university had an income of £198 million, 20,000 students, and spent £121 million (61% of its income) on staffing. That university reported a ‘challenging year’ making a £18.4 deficit. The vice-chancellor had a salary of £247,781 which, with pension contributions, came to a total renumeration of £307,520. That’s six grand less than the £313,448 paid to the CEO of a college with less than 4% of the university’s income and less than 6% of its student numbers.

The OfS has published two reports on senior staff pay; one in February 2019 looking at 2017-18 data and the last one in November 2021 which looked at 2019-20. Since then a significant change has happened; a number of private providers have been registered and have now had long enough to have to follow the accounts direction, which requires the disclosure of senior staff pay. I’m hoping this is a biennial report and OfS will be able to put comparative information about 2021-22 in the public domain. Although, if the directors of a college with 1200 students don’t think its ‘excessive’ to pay their CEO £300k, we might be in for a round of pay inflation.