Today, 5 March, the Vice-Chancellor wrote to all staff. You can read his email in full:
There was more big news this week affecting universities and our staff.
For universities, the biggest event this week was the publication of the valuation of the USS pension scheme on Wednesday. This was, without doubt, unmitigated bad news. USS published three ‘prices’ that will need to be paid to keep pension benefits in future the same as they are now. Before coming on to these, it is important to stress that – whatever happens – any pension entitlement that has already been built up is guaranteed by law. However, to keep pension benefits from future periods of work at the level they are now, USS have published three scenarios:
Scenario 1 is the ‘no change’ option and would require a total contribution of 56.2% of pay, the increased cost of which is split two-thirds to the University and one third to each contributing member of staff.
Scenario 2 is priced at 49.6% of pay – again split in the same way – and would require universities to make a series of commitments to USS about, for example, debt and a temporary moratorium on leaving the scheme. These commitments have not been agreed by universities but are likely to be acceptable to the overwhelming majority.
Scenario 3 would require much stronger commitments and promises from universities and would bring the total cost of contributions to 42.1% of pay. It is not clear that these would be acceptable to a majority of institutions.
None of these scenarios is palatable: the current cost of USS is 30.7% and due to rise to 34.7% in October. I am very concerned that they are based upon an exceptionally pessimistic set of assumptions and fail to recognise either the strength of member universities or the impact of the proposed measures under Scenario 2. I have made these views known to USS and will continue to do so formally, as will Universities UK.
Before I sketch out what happens next, I want to recognise three things. First, it is up to USS to set the price of benefits however much universities or employees disagree with their approach. This means that if they do not change their approach, we have to accept it. Second, the Pensions Regulator has published a seven-page letter which states their view that even Scenarios 2 and 3 are at the limits of acceptability to them. And third, even whilst I question the size of the deficit, it is impossible to deny that there is a significant problem to be addressed.
Formally, the Joint Negotiating Committee (JNC), which has equal representation from Universities UK, which represents all employers whether they are a UUK member or not, and UCU, which represents all USS members whether they are in UCU or not, together with an independent Chair, now has to decide whether contributions should rise, or benefits should change or whether there should be a combination of both. Initially, this will be at the highest price, although UUK will simultaneously consult all employers about their appetite to make commitments outlined under Scenario 2 and Scenario 3 to reduce the overall need for change.
At this stage, as I’ve said, none of the options look good. The additional support measures that USS are seeking from employers will not only reduce our capacity to invest over the long-term, even at their strongest they will not be enough to keep things as they currently are. I still hope that USS will either be able to provide a proper justification for an excessively cautious approach or change their approach. If they cannot and will not, UUK and UCU will need to find the least bad option for employers and employees alike.
If a change is proposed, we will actively engage with all USS members within the University about their preferences.
In the meantime, I would also encourage you to attend two upcoming sessions about USS and the 2020 valuation: one with USS for all members and another presented by independent pensions expert, Mercer.
You can also read more about this week’s developments in this week’s USS 2020 valuation update.
Amongst the headline tax rises announced by the Chancellor of the Exchequer in this week’s Budget was the news that university tuition fees will be frozen at £9,250 until at least the 2022/23 academic year. This means that tuition fees per student will have gone down in real terms every year, bar one, for the past decade. You do not have to be a financial expert to see that this flatlining income, combined with upward pressure on costs such as pay and pensions, creates an extremely challenging environment.
I sincerely wish I didn’t have to discuss such disappointing news with you at this time, but it is important you’re fully aware of these significant financial implications.
Even amidst the gloom, there is much to celebrate. I mentioned the work of Cassandra Wiener, a PhD researcher in Law, Politics and Sociology, a few weeks ago. Cassandra has used her research into coercive control and the criminal law to convince the Government to close a legal loophole that left ex-partners of domestic abusers unprotected. Her campaign is a fantastic example of how research can have a genuine impact on society and real people’s lives.
This spirit of challenge and a desire to bring about a better world are at the heart of everything we do at Sussex. If you haven’t already, I urge you to read this inspiring interview with Adarsh, who is an Article 26 scholar at Sussex. We offer Article 26 Scholarships to enable forced migrants to study at the University of Sussex and they form a key pillar of our status as a University of Sanctuary. Hearing first-hand what a profound difference they make reminds us of the transformative power of education and strengthens our commitment to continue be a place of academic refuge.
This commitment to inclusion applies to all parts of the University. As we begin the process to recruit a Pro-Vice-Chancellor for Diversity, Culture and Inclusion, I am delighted to share the news of four academic colleagues at Sussex who have volunteered to lead work on our equalities charters.
Miguel Maravall from Life Sciences is our academic lead for Athena SWAN and is chairing our Athena SWAN Self-Assessment Team. John Walker from the Sussex Centre for Language Studies is leading our work on Disability and is forming a Disability Steering Group in collaboration with our staff network. Emile Devereaux from MAH is our academic lead for our LGBTQ+ work and will also be forming a Self-Assessment Team in collaboration with our networks. Naaz Rashid from MAH is the Deputy Chair of our Race Equality Charter Self-Assessment Team and is leading the work that supports our Race Equality Charter submission.
I want to say thank you to John, Naaz, Emile and Miguel and to share my gratitude for their commitment to this vital work. Please look out for more news on all of these themes.