Get organised to defend USS and pay

Take the fight to Boris – Defend Higher Education!

What is at stake

This is what is happening to our USS Defined Benefit pension. If we were to accept UUK’s offer, USS will pay us a pension worth less, pound-for-pound, than three quarters of the value (72.22%) of the 2011 CARE scheme.

And that scheme was a huge cut from the Final Salary scheme that had existed for years.

Graph: The incredible shrinking USS CARE scheme. Pound for pound value of USS member contributions.

This is a deliberate policy by the employers, working in concert with those in USS and the City who would like to see the back of Defined Benefit. In 2018 UUK used their majority on the Board (and the casting vote of the Chair) to impose Defined Contribution.

The entire case for increasing contributions is predicated on a ‘deficit’ that has been widely debunked. The simple fact is that if the pension scheme were not ‘de-risked’ there would be no projected deficit. ‘De-risking’ (selling off investment assets and buying gilts) began after the employers demanded it in 2014.

This attack is not a one-off. It won’t be stopped by negotiations — however clever the negotiators. Sally Hunt knew that. That’s why in 2017, she used her influence on the HEC to build the strike. She silenced the right wing of the HEC, openly campaigned for strikes and allied with the Left to make sure they took place.

Members took up the call and responded brilliantly. 14 days of strikes stopped USS and UUK wrecking the Defined Benefit scheme altogether.

We could have fought and won to commit UUK to No Detriment. Had we done that, we would not have to fight now.

But two years on, USS and UUK are turning their backs on the Joint Expert Panel, the result of the 2018 dispute, ignoring UCU, and demanding 20% more from members — all for the same pension benefits.

With the employers imposing 1.8% on pay, USS members will have an effective 0.2% pay increase (CPI, meanwhile, is at 2% and RPI 2.8%). This is a huge pay cut. 

Worse, increased employer contributions will inevitably provoke the university employers. Trinity College Cambridge has left the scheme. As costs on them rise, universities will demand 100% DC. And every cut in DB pension value means less for members to defend.

We cannot leave it to the Joint Expert Panel to rescue us. USS is being undermined by market greed.

Record profits, winners and losers — staff and students lose

Our pension is the victim of Higher Education marketisation.

It is no accident that 2011 marks the beginning of the decline for USS, a scheme that survived stock market crashes and paid 1/80th Final Salary for decades. Before 2011 members paid 6.35% employer contributions. After UCU lost that round, contributions were forced up to 7.5%, and Final Salary was closed to new members.

Before 2011 the employers’ surpluses (profits) were small. Universities were not expected to turn a profit. For example, in 2003, HESA reported a sector surplus (both pre- and post- 92) of £65 million.

But by 2016 the sector surplus was £1.5 billion (on stricter reporting standards)!

The mad competitive scramble to recruit undergraduate students and bank £9,000+ tuition fees has set university against university, college against college. It has encouraged them to borrow over £10 billion in capital projects, and it has created winners and losers.

Graph: Winners and losers. Surpluses as a percentage of total income by institution (2016-17), HEFCE.

Graph: Winners and losers. Surpluses as a percentage of total income by institution (2016-17), HEFCE. Total surpluses in 2017 were reported to be £1.1 billion.

The premise of USS’s stability is mutuality — that the sector works together to provide pensions and the employers together contribute stability to the investment strategy by underwriting the portfolio. This is known as the ‘employer’s covenant’.

But Higher Education competition is destroying mutuality and trust. Why would UCL loan to USS to underwrite the risk of King’s, its competitor down the road? Why would King’s underwrite UCL?

Anyone who thinks that accepting this offer will ‘tide over’ USS has not been paying attention.

Members struck for 14 days in 2018 because they knew that our fight to defend USS was also a fight to defend the future of Higher Education. We had to resist the war of all against all that the sector had become locked into.

Made in Westminster

In 2016, HE Minister Jo Johnson drove through the Higher Education and Research Act. This allowed universities to declare bankruptcy, as Greenwich School of Management (aka ‘GSM London’) did in July.

No wonder employers are concerned about carrying each other’s risk!

The Tory Government is divided over Brexit. A snap General Election is likely. We have a tremendous opportunity to put Higher Education on the map and put the responsibility for this crisis back where it belongs — in Government. The demand for a Government Guarantee to underwrite USS makes total sense. But we need one now, not when USS is frittered away to nothing.

Since our strikes in HE, Further Education members struck over pay and marched on Parliament against cuts in funding. Our members’ action put FE on the political map and extracted £400 million from a right-wing government led by public school boys!

Taking action in own defence gives members confidence to stand shoulder to shoulder with our EU colleagues and students over Brexit, and stand up to any attempt to divide us in a snap election.

Get organised for Round 2

We have to fight to defend our pensions and pay, and we have to organise the fightback now.

As well as pay cuts, the other symptoms of HE marketisation are rising inequality, casualisation and workload.

We have a fantastic opportunity to bring all of these fights together in the two ballots, uniting both sectors.

Balloting begins next week.

The only way to defend our pensions is through strike action beginning in the Autumn Term. We need to approach Get the Vote Out with military seriousness in branch after branch.

We won the first battle, but if we don’t fight now, we will lose the war. We need to mobilise everyone who stood on the picket line in 2018 to organise meetings in department after department — it is time to unite to win the ballot to defend USS, defend pay and defend Higher Education for future generations.

Unite to Defend Education!

Scrap fees — Education should be for all who can benefit

Support the Pension and Pay strikes


The Tories’ announcement on 19 November that they were looking into Higher Education funding is an admission that their policy of overpriced undergraduate fees and high-interest loans is unpopular and unsustainable.Their motive is self-interest. Greening and May have not suddenly discovered the downside of their own policies. But at the last election, by championing the abolition of fees and the return of the maintenance grant, Jeremy Corbyn’s Labour Party nearly stormed to victory.

So rather than dismantle this corrupting edifice, the Tories will tinker around the edges. Within a few years of the fees-and-loans market being set up, Vice Chancellors are now completely financially dependent on it.

The Willets Plan

In 2010, Conservative HE minister ‘Two Brains’ David Willets had a plan. The first element was scrapping the old £3,000 fee, and replacing it with a new fee of up to £9,000, backed by student loans of a special type. These loans were unlike normal loans (including those previous Student Loan Company ones). These would have a high rate of interest (3% above RPI), but were treated more like a tax than a loan. Special terms could be attached to the loan – not having to pay it back until wages reached a certain point, not counting towards credit scores, and so on. But the high rate of interest means that if you are expecting to earn above the threshold, the quicker the loan can be paid off the less you pay. And if you are wealthy, it is better not to get the loan at all.

The loans programme is unsustainable. The Treasury has hidden the debt mountain from public statements of government borrowing, and created special rules to support it. Already the predicted rate of return is around half – so half will be paid by taxpayers anyway. It is becoming more expensive, not less, for the taxpayer.

Willets always intended that universities would set up differential ‘market’ fees, and there would be price competition between universities.

This is an idea the ‘Free Market’ Tories are now revisiting, but instead of universities setting the price, the Tories are toying with the idea that their new Quango, the Office for Students, will do it. Continue reading

Government defeated over the HE Bill at the first Committee stage

» Download this briefing as a PDF

screen-shot-2016-10-18-at-09-51-58The Government has been forced on the back foot after the Lords pushed through an amendment to the HE Bill which reaffirms what universities are for.

This is an important amendment, because it represents the clash of two very different ideological perspectives on the purpose of a university.

The premise of the HE Bill is that a university is a kind of “higher education provider” – like a toothpaste provider.

The Government has defined universities in this crass way because it opens the door to private companies swooping in, setting up campuses and charging high tuition fees to students. In the USA this has meant a colossal expansion of what is known as the ‘for-profit’ sector. This is now in decline as a result of a series of frauds and scandals.

Although it might sound quite bland and obvious, stating that “a university must uphold the principles of academic freedom and freedom of speech” makes a very big distinction between a university and a private company. If you are a scientist working for a private company and you publish research that is critical of a commercial partner of your employer, you will almost certainly be fired.

Publicly-funded, publicly-accountable science is crucial to a free society. So the engineering researchers in the US who blew the whistle on Volkswagen were probably funded by the automobile industry and needed their cooperation to test vehicles. But they found a big discrepancy between the industry’s published figures on emissions and what they saw in the lab. They were able to publish the results because they were protected by the principle of academic freedom – whistle-blowing clauses in their contracts.

After the gold rush

In 2011 the Coalition Government introduced 9K fees, and cut the per-department ‘block grant’ (scrapped it altogether in some subjects). In 2014 they removed the cap on student numbers. This unleashed a wave of speculative expansion by existing universities (a ‘gold rush for students’). Universities saw they could expand student numbers, and once they had covered their costs, each extra student recruited was pure profit. They hired staff on short-term contracts and started pouring money into new campuses. The starting gun was fired on a race to the bottom.

This is now placing extreme strain within universities. Government-funded research earns the university an additional 80% on top of salaries. But if you do the maths, a teaching staff member costing £50,000 a year teaching 30 students paying £9,000 will earn the university 440% on top. The incentive is clear – push out research-active academics, who “only” bring in 80% of their salaries, and hire teaching staff, expand marketing and building space.

What does this amendment mean?

It is vindication of all of those who have got organised to oppose the Bill. It should be the start of many amendments to remove other clauses from the HE Bill. These clauses let private companies brand them-selves as a University from Day 1, write degree programmes without oversight, etc.

» The amendments the HE Convention is arguing for

Across our campuses, colleagues should approach the question of organising against the HE Bill and defending Education with renewed vigour.

The NUS has launched their boycott of NSS. Student Unions are open to organising with UCU branches and other trade unions to explain the Bill and the Boycott.

What you can do

  • Organise meetings on campuses and communities. Our first task is to bring people together who want to do something. We can all circulate the link to the ‘College, Inc.’ video to colleagues, include a link to the HE Convention website, and ask them if they’d like to help organise a meeting about the HE Bill.
  • Invite outside speakers. If you need a speaker from the Convention, email us or add a comment to their website. Think about whether you want to open the meeting up to a Public Meeting and invite MPs to debate. This can draw a crowd, but you may want to start small and build up to a Public Meeting after the Third Reading.
  • Lobby your local MP in their constituency. MPs have constituency surgeries. You can arrange to turn up in a large group and ask to speak to the MP about the Bill. It can be powerful to send in a student and a staff member as delegates. But this does not mean you should not try to turn up en masse. Numbers turning up in the constituency help remind MPs that they rely on you for votes. Invite the local press. Target Tory MPs – the votes are on party lines.
  • Support the NUS boycott of NSS. Make sure your UCU branch is putting out statements in support of the NSS boycott. Talk to the SU. Get staff meetings together to put out statements. For example, some departments at UCL have put out statements saying “normally we would call on all students to participate in the National Student Survey, but the NSS is boycotting it and this is why”. Strengthen the arguments the NUS are using – mostly about tuition fees – with an explanation about the TEF and the HE Bill. See the Convention website for more details.

See also