They were furious when John Patten, the Secretary of State for Education, vetoed a pay deal hammered out between the universities and their lecturers. After protracted and difficult negotiations, the vice-chancellors and the Association of University Teachers had agreed a deal: a 6 per cent pay increase from 1 May 1992, plus 1 per cent of the pay bill from 1 January 1993 for discretionary pay, to enable universities to make merit rises and meet particular shortages.
Ministers sat on the proposed settlement for 10 weeks, then said it was too far out of line with inflation, and the Government would not pay up. They also ruled out arbitration and held back pounds 24m from the universities' grant.
Vice-chancellors and the lecturers' union were briefly united in a campaign directed at making the Government change its mind. But that accord is now over. Fearful of a pay freeze, the vice-chancellors have unilaterally come up with different proposals: an increase of 4.2 per cent, plus 0.75 per cent for discretionary payments, rewarding performance.
Would the Government release the pounds 24m if that was the offer? Yes, the answer has come back from the Treasury; and any day now the Department for Education will formally confirm that position. It is likely, however, that the department will impose at least one condition: that universities will not give any further
pay rises to lecturers later this year.
Steve Rouse, head of industrial relations for the Committee of Vice-Chancellors and Principals, accepts that it has reneged on its agreement with the AUT. 'But we want to ensure that staff at least get something. There is a general fear of an imminent public-sector pay freeze. That is our only motive.'
The AUT, not surprisingly, is spitting nails. Some of its members are calling for withdrawal from all teaching in protest at the Government's intervention, and a special council has been called for 19 November to discuss tactics, including industrial action.
Almost every year a spat arises over university pay. Either the two sides cannot agree on the same figure, or the Government holds back part of an agreed settlement. Lecturers threaten not to mark examination papers, and campuses become sour, unhappy places.
One of the underlying problems is the structure itself. The employers - the vice-chancellors - and the AUT meet under an independent chairman. This is called Committee A. They try to reach agreement on a proposal, which then goes to Committee B, consisting of the Government on one side and the vice- chancellors and union acting jointly on the other.
Everyone agrees that the system has become virtually unworkable. When it was established in 1970, it was understood that the Government would provide additional funds to the universities if necessary (officially called 'supplementation'), to allow implementation of any proposal approved by Committee B. Thus the Government was given its right to veto any deal.
But Mr Rouse says: 'Since the introduction of cash limits, the veto has no purpose.' The universities knew they could afford the original deal within existing budgets. 'Nor can we see any public interest in vetoing it. If the Government had not sat on it for so long, the original deal would have gone through.
'All that remains is the question of whether the Government should influence pay structures and philosophies of pay when it is not the direct employer. A government that proclaims the virtues of subsidiarity sits oddly with the insistence of reaching into the detail of what is being done.'
However, the annual rows over pay may soon be over. The vice- chancellors have set up a working group to examine a completely new system of paying not just their lecturers, but their cleaners, secretaries, maintenance staff and caterers as well.
The group, chaired by Brian Fender, Vice-Chancellor of Keele University, wants a unified pay structure that will involve all university staff 'from porter to professor'. The proposals are based on the concept of 'total quality management'. The idea is to abandon hierarchies: people should see themselves as part of the same team, working together to serve the customer.
Instead of negotiations with six different unions, representatives would sit around the same table at the same time. Jobs would be evaluated and allocated rungs on the salary ladder.
The funding of universities is diverging; some can afford to pay more than others. So institutions that could do so would pay more - under deals with individuals, not unions. Universities would be able to take into account local market conditions, such as the availability of staff with key skills; they would have the flexibility to pay more; and the package would include an element of performance pay. 'Take the example of catering,' Mr Rouse says. 'If there has been a huge throughput because of increased numbers of students, but a lower increase in staff, that is a productivity gain and should be rewarded.'
Would it lead to more, or less, power for the unions? 'The fundamental idea is that you consult everybody,' he says, 'so unions would become less relevant.' The unions, however, may not see it that way. The proposals will not be published until mid-December, and the unions want to see the details before they comment. But the lecturers, like the vice-chancellors, want a better system.
The proposals are radical. They would lead to much greater competititon among universities. It could even lead universities back to an argument pressed by the University Grants Committee as long ago as 1930. Arguing against uniform salary scales, the committee insisted: 'Each university or college must be free to decide for itself what is best suited to its own needs and resources, and it is not only natural but desirable that the size, wealth and standing of different institutions should be reflected in differences of salary.'