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Salaries of high-paid Vice-Chancellors to be monitored by new regulator

The Universities Minister has urged university heads to show restraint concerning salaries. Photo: Creative Commons

Plans to curb spiralling rates of pay for Vice-Chancellors (VC) of universities across the country have been confirmed by the government.

The salary of the University of Exeter's Vice-Chancellor, Steve Smith, has already come under scrutiny as it was revealed he has received an overall package of over £400,000, including a salary of £315,000.

Any institution paying more than £150,000 a year to their VC will now have to justify the salary to a new regulator, called the Office for Students.

Vice-Chancellor of the University of Exeter Steve Smith makes in over £400,000 a year. Credit: University of Exeter

The new rules are set to affect Vice-Chancellors at universities, including Exeter, Plymouth and Falmouth, where salaries are in excess of £200,000 a year.

Universities Minister, Jo Johnson, has requested that institutions to show restraint, over the salaries of their university heads.

Mr Johnson will lay out the plans in a speech to university heads at an annual Universities UK conference in London on Thursday, 14 September.

The plans could mean the Office for Students will be given powers to impose fines if institutions do not give good reasons for high pay. The plans will be consulted on before they go ahead.

Universities Minister, Jo Johnson, is set to announce the new plan next week. Credit: PA

The University of Exeter is ranked number 16 in the UK and 130th in the world, according to Times Higher Education's 2018 World University Rankings. It is said to contribute £1.1billion to the economy of the South West of England, creating jobs and fuelling business and research.

Steve Smith, who is also a former chairman of Universities UK, had been Vice-Chancellor and Chief Executive of the University of Exeter since October 2002.

The Vice Chancellor's salary is independently set by the University's Remuneration Committee, with only independent members of the University's Governing Body making the decision. The Remuneration Committee uses a rigorous, performance-based process to review senior salaries.

Since 2008, Sir Steve's salary has on average increased by under 2 per cent a year. He has refused an annual salary increase twice in the past nine years. This year Sir Steve will not take a pay rise, as agreed by the University’s Remuneration Committee.”

– University of Exeter Spokesperson
Credit: PA

The university is part of the Russell Group, which represents 24 of the UK's leading universities. A spokesman for the group has said competitive salaries help keep university standards high.

However the salary rate of senior leaders, including vice-chancellors has been scrutinised by union leaders.

Sally Hunt, General secretary of the University and College Union, said, "over two-thirds of vice-chancellors sit on their own remuneration committees, and three-quarters of universities refuse to publish full minutes of the meetings where leadership pay is decided."