University fees: The price is up but where's all that extra cash going?

Turnover is up, the living wage stays down and protests continue. What's going on?

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Scarfed students standing on smashed police cars, horses charging into protesters corralled like sheep – when the increase in tuition fees was announced the protests hogged headlines around the world.

But, as the students paying £9,000 a year enter their second year, the issue of meteoric university costs is slipping under the radar. This week’s protests have been a less dramatic affair, with peaceful picket lines, flags being waved and much fewer buildings being occupied. But though an aging Marxist picketing a lecture theatre doesn’t quite have the same public interest of Tory HQ being trashed, the issue still requires attention.

It is, perhaps, the perfect moment to reflect on the impact tripling tuition fees should have on staff wages. Or perhaps more to the point, the lack of impact it has had. UCU, Unite and Unison – the three unions who represent the majority of University workers – organised the strike, which university staff participated in to protest the derisory offer of a 1% pay rise: in real terms representing a 13% pay cut from 2008. Protesting at the same time, but entirely separately from the union protests, were Occupy Sussex, who specifically targeted the introduction of the living wage to university administrative staff.

At a time when universities’ turnover and surplus income is predicted to shoot up, in line with tuition fees, the demands of the unions and Occupy Sussex are timely . The living wage is currently set at £7.45 outside of London, and £8.55 inside the capital. This is the lowest amount that the Joseph Rowntree foundation estimate people can earn and live at a socially acceptable level.

It's an issue that's slowly creeping into the political agenda. Ed Miliband is to reveal his policy regarding it over the coming days, but despite all that the living wage has been part of proposals and protests in student politics for several years. And up until now universities have been fairly robust in their dismissal of the idea.

The sensible argument against the living wage goes something like this. Universities cannot afford it. Therefore if they agreed on implementing it, they would have to cut the majority of their low paid staff to ensure they could pay a minority the living wage. This argument makes sense, and legitimately applies to certain cases, however at the current point in time it cannot be used as a defence. Official financial reports for the previous year have not been released yet, however early indications, like figures obtained by York Vision, suggest that the universities’ surplus and turnover have increased dramatically due to the rise in tuition fees.

York University’s turnover has increased from £257 million to £290 million. Where this extra money has been redistributed at the moment is largely unknown. Given the staff are protesting, it seems unlikely it's been reallocated towards their wages. On top of this York’s surplus has jumped up by £3 million, to £8.7 million – roughly a 60% increase – and a clear effect of inflated tuition fees. Whilst other universities financial figures are currently unknown, they are expected to follow this trend with both an increase in turnover and in surplus.

Some of the turnover will be off-set by a reduction in government subsidies, however there is no reason why a certain amount cannot be reallocated towards an increase in pay. However subsidy or no subsidy, there is still the significant rise in surplus which should be used to pay the small, yet crucial, amount to bring admin workers’ pay up to the living wage.

Now, York is a mid sized university with 15,000 students. Naturally universities with more students are matched by more staff and vice versa. As the increase in turnover and surplus is dependent on the number of students, it should always be sufficient to cover the living wage of the staff at any university, as the relationship between the number of staff and students is naturally linked. 

The reallocation of turnover is a feasible strategy, and this is without even considering altering vice chancellors’ frankly astronomical wages. Between 2011 and 2012 vice chancellors’ salaries rose by 2.70% surpassing regular employees meagre pay rise of 0.5%. And some rose by over 10% – with Warwick University’s chancellor’s salary going up by £42,000, to £316,000 annually. That rather trivial £42,000 (in a salary that large does 10% really make that much of difference?), could have covered giving numerous admin staff the living wage for a year.

Nobody wants to see students being kettled, or police vans being torched. The protest earlier this week was peaceful and made its point respectfully. But let's not ignore the issue. Now is the right time for a reconsideration of wealth redistribution within these prosperous seats of learning. As for staff struggling after years of having their paypacks frozen, let’s round to giving them what they deserve.

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