Ministers waded into the row over vice-chancellors’ pay on Monday night - by telling institutions they should curb pay rises to their top management.
Figures show vice-chancellors in the Russell Group, which represents 24 of the UK’s most selective universities, received pay rises averaging eight per cent last year - at a time when their employees were pegged to just one per cent. Several are now receiving pay and perks packages of more than £400,000 a year.
On Monday night Business Secretary Vince Cable and Universities Minister David Willetts, unveiling the universities budget for 2014/15, warned: “We are very concerned about the substantial upward drift of salaries of some top management.
“We want to see leaders in the sector exercise much greater restraint as part of continuing to hold down increases in pay generally.”
Next year’s budget will see the universities’ teaching grant slashed by £945 million this year with the prospect of a further £246 million cut the following year - reducing it to £1,669 million.
However, universities are expected to receive increased fee income from students of £2,600 million to offset the cuts.
The implications of the budget for the next two years are spelt out in a letter from Mr cable and Mr Willetts to the Higher education Funding Council for England, which must decide now how to distribute the money.
Sally Hunt, general secretary of the University and College Union - which has been involved in strike action over the one per cent pay offer to employees, said: “UCU does welcome the letter’s concerns about ‘substantial upward drift of salaries of some top management’.
“Ministers are right to rebuke greedy vice-chancellors for their unjustified big pay rises.”
In their letter, Mr Cable and Mr Willetts say they had put £200 million into the teaching capital budget - to improve facilities in teaching subjects like engineering, science, technology and maths - considered vital for the future of the economy.