The University and College Union (UCU) has urged employers to “restore pension benefits” to avoid “unprecedented” industrial action, with a further ballot around changes to staff pensions expected in September.

The union argued that the sector should “rethink its priorities” and use surpluses and money saved from scrapping “needless” projects to help support staff amid the cost-of-living crisis, pointing out that universities finished 2020/21 with £3.4bn more cash.

In particular, the union suggested that a portion of the planned capital expenditure should be diverted to raise pay, bring staff onto permanent contracts and restore pension benefits.

In line with this, UCU is expected to undertake a further ballot in early September over cuts to pensions, pay and working conditions, with a total of 27 universities currently holding a mandate to take strike action on pension issues until October 2022.

However, UCU argued that employers can avoid the “unprecedented” industrial action by prioritising investment in staff and taking steps to "restore" pensions.

Employers have faced growing pressure to reconsider recent changes to Universities Superannuation Scheme (USS) pensions as its funding position has improved, with the latest funding update revealing a £1.8bn surplus for the scheme.

UCU general secretary, Jo Grady, commented: "Universities generate their income because of staff who deliver excellent teaching, effective administration and produce world-class research.

"It is beyond unacceptable for employers to then cream extra cash off the top of their hard work and then plead poverty.

"It is time the university sector reassessed its priorities. Does it want an exhausted workforce, barely able to make ends meet? Or does it want to invest in the people that make a higher education what it is?

"Investment in staff is investment in students, and vice chancellors need to wake up to that fact.

"Falling pay, devastating cuts to pension and insecure contracts are not a fact of nature but the consequences of spending decisions made by vice chancellors.

"University staff are clear that they have had enough and unless urgent action is taken to raise pay, restore pensions and address their wider concerns, they will be voting to take strike action this autumn."

Commenting in response to the concerns, however, USS Employers emphasised that the current pension contributions from employers are "at the very limits of collective affordability".

A spokesperson for USS employers stated: “Employers have repeatedly said that their current contributions to the pension scheme – which rose to 21.6 per cent of salary in April – are among the highest in the country and at the very limits of collective affordability and sustainability.”

Adding to this, Universities and Colleges Employers Association (UCEA) chief executive, Raj Jethwa, argued that it "is ironic that UCU quotes from the latest OfS update, while ignoring the risks it highlights, including a forecast decline in overall financial performance and the significant cost pressures which could accentuate this".

Jethwa continued: “Aggregate financial performance also masks the considerable variation between HE institutions, including the numbers of ‘home’ and international students and the staffing profiles necessary to deliver different curricula.

"Each institution has a legal duty to balance its books and the nationally negotiated pay uplift has to be affordable for all 145 institutions.

"Many HE institutions are working hard to avoid redundancies, and others are struggling to balance budgets to maintain staffing levels, while delivering this year’s pay uplift into staff pockets.

“Targeting capital investment is disingenuous. UCU knows that it accounts for less than 10 per cent of total spending and suffered significant cutbacks during the pandemic, in order to devote resources to supporting staff and students.

“Our pay uplift provides for up to 9 per cent for staff on the lowest pay points, who are most affected by inflation, and a minimum increase of 3 per cent for all staff.

"It was important for staff to receive the uplift from the start of the financial year on 1 August and many will also receive a 3 per cent incremental rise.

"UCU knows better than to suggest that a handful of institutions can somehow cross-subsidise a 7.9 per cent increase in pay for staff at all institutions.”

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