University staff face pensions crisis

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Universities are heading for a financial crisis over the payment to staff of final salary pensions, a conference was told yesterday.

Dr Geoffrey Copland, a former vice-chancellor of Westminster University who headed the unions' pay negotiating body for four years, said universities faced a growing "black hole" in their pension funds, with payments rising year by year, and the situation "cannot be sustainable". Asked what would happen if the shortfall in funding was not tackled, he added: "Universities will be unable to afford the payroll and won't be able to operate. I don't think it will come to that – we'll find other ways round it – but it is a really stark situation we face."

Dr Copland was addressing a seminar organised by the Learning Skills Foundation and sponsored by The Independent, he said staff were in a variety of private pension schemes but the cost of an individual pension was now "in the upper teens". Many support staff were in private schemes, "some of which are going to collapse", he added.

He also warned that redundancies among university staff were likely to increase. "We have to seek redundancies one way or the other [to make ends meet]," he added. "That will not get any easier. In fact, it may get worse."

One way forward, he argued, would be to take on "high calibre specialists" from the worlds of business and the arts to lecture students without incurring the extra costs of taking them on as full-time staff. "This is opposed by the unions as 'casualisation', but I would encourage it as bringing in terrific expertise to meet the particular needs of particular groups of students," said Dr Copland.

In a separate address to the conference, the take-up of higher education places in Britain, particularly by men, was described as "unacceptable" by Professor Malcolm Gillies, a former vice-chancellor of City University in London. He said only 30 per cent of white males expected to go to British universities this year, and this would leave the country unable to compete economically with other industrialised nations. He conceded that government funding for universities could be reduced and left to "remedy market failure" by subsidising students on courses vital for Britain's future.

"If there is no shortage of students and they are prepared to pay, why would you put government money into that at all?" he argued.