I LIVE in Bahrain, but two of my children are students at British universities. But I’m worried for if universities and their lecturers fail to agree terms soon, Britain is in for a spring and summer of discontent. A series of strikes looms that will mean cancelled lectures and possibly exams. Students will claim that they have been defrauded because, as fee-payers, they are consumers too. There are already demands for refunds in anticipation of strikes. Lawsuits may follow.
Overseas students will feel even more aggrieved. They pay higher fees than domestic students and do not have access to British student loans. The spectacle of young people paying upwards of BD12,000 a year when living costs are included, only to forego teaching, will do nothing for the reputation of what is supposed to be one of the country’s most valuable exports. And all because of a dispute over how to fund lecturers’ pensions.
To judge by recent comments from Sally Hunt, general secretary of the University and College Union (UCU), her 42,000 members have been forced by grasping vice-chancellors into an intolerable position from which strike action is the only way out. In fact this is an actuarial problem with an actuarial solution, and it cannot be beyond the wit of the best minds in the country to find one.
For the sake of more than half a million students paying some of the world’s highest fees, the UCU and universities need to get back to talking.
The planned strikes would mean empty lecture halls until a full week of no learning ending on March l6. They are timed to bring the dispute into the sharpest possible focus as end-of-year exams approach. Ms Hunt says that she is “very sorry” and there are reasons to believe the decision to strike has not been taken lightly.
By the standards of other professions, lecturers are not well paid, with starting salaries of about BD20,000 rising to BD30,000 for senior posts. By way of compensation they traditionally receive generous defined-benefit pensions, which Universities UK, the sector’s representative body, proposes to scrap in favour of a defined-contribution model. That would hurt anyone who has planned a career and a retirement on the basis of the current system. The union claims the switch would cost its members BD5,000 a year in retirement income. Yet the context is unyielding. The universities’ BD40 billion pension scheme is said to be BD3.2bn in deficit.
The law requires its trustees to come up with a plan to plug the gap. Defined-benefit schemes are now unusual precisely because they are unsustainable outside the public sector, and they are hugely expensive even there.
It does not help the vice-chancellors’ case that many are on six-figure salaries with pension pots larger than BD500,000. Moreover, the union claims they have overstated the deficit and never shifted from a plan to scrap the defined-benefit scheme altogether. For its own part the union is said to have proposed a compromise, but with unaffordable contributions from both sides.
This is a damaging but avoidable impasse. In the end universities will have to move away from defined-benefit pensions. To get there they should encourage the UCU to seek a second opinion on the size of the pension deficit, and then negotiate in good faith a phased-in defined-contribution funding model. The good name and good financial health of British university education is at stake; failure is not an option.