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Striking dons add to UK students’ resentments

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Striking dons add to UK students’ resentments

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Striking dons add to UK students’ resentments

The cuts to university lecturers’ pensions are too deep, and divisive

Lecturers in the UK will start a series of strikes this week, should university representatives fail to return to the negotiating table © Alamy

Consider the frustrations of university students in England. Most are paying £9,250 a year in fees for what Theresa May, the UK prime minister, acknowledged this week is “one of the most expensive systems of university tuition in the world”.

Perversely, those from lower income families tend to graduate with the highest levels of debt, while those who reach the income threshold of £25,000 a year — where loans become repayable — are carrying a disproportionate share of costs via high interest rates.

The fallout from a dispute between Universities UK, the sector’s institutional umbrella, and lecturers over changes to the latter’s pension benefits adds to a sense that students are being short-changed. Should university representatives fail to return to the negotiating table, lecturers will start a series of strikes on Thursday in what will be the most serious disruption to higher education in the history of UK campuses. More than 1m students at 64 institutions will be affected. The strikes could extend into the summer, jeopardising final year exams.

The prime minister this week put off an overhaul of the fees system by commissioning a review that will last a year. The more immediate conundrum regards lecturers’ pensions. In November UUK announced cuts to retirement packages to reduce an estimated £12.5bn deficit in the Universities Superannuation Scheme, the UK’s biggest single pension scheme. The changes the UUK is proposing are similar to those that have been carried out by businesses across the UK. These would see the scrapping of defined-benefit pensions which offer certainty of income in retirement. In their place UUK would introduce defined-contribution pensions — whose payout depends on the performance of underlying investments — from April 2019.

The lecturers are effectively being tumbled out from a system they were promised. Like their students, they are understandably aggrieved. According to figures from the University and College Union, they are being asked to accept cuts to their pensions of up to £10,000 a year. That is a very steep price.

They are doubly resentful because the management at universities has been oddly insensitive to inequities in the way the benefits of tuition fees have been distributed since these were introduced in 1998. The contrast between the ballooning salaries of vice chancellors and senior management aides and the stagnant income of researchers and lecturers is indeed embarrassing.

Part of the problem is in the way long-term risks to pension funds are calculated from a contemporary snap shot of the economy. A sharp rise in interest rates, for example, could clear the forecasted pension deficit which has necessitated UUK’s proposed cuts.

The issue has divided lecturers and their students, management and staff. It has also split universities between those who as employers feel they should pay more to secure the benefits that attract talented staff, and those who fear that higher pension contributions will drain resources from research and training. The resulting crisis underlines the need to redistribute the resources of a well funded academic sector so that staff and students feel more fairly treated.

In the immediate future, if students are not to suffer the consequences of this dispute, the universities must increase their pensions offer, and lecturers should give a fair hearing to any new proposals. Failing that, students should be compensated by the colleges. They have paid heavily for a service. Non-delivery demands a refund.

Letter in response to this article:

A pension scheme design that shares the risk / From Nicholas Barr, London School of Economics, UK

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