190,000 lecturers and university staff at “pre-92” universities, including Newcastle University, face cuts in their pensions due to changes in the Universities Superannuation Scheme (USS). As a result, lecturers affiliated with the Universities and Colleges Union (UCU) are planning to strike at 61 universities across the country.
At Newcastle University, of the 62% of lecturers that turned out to vote on the strike action, 90% voted in favour. There will be 14 days of strike action, escalating in number per week, starting in late February. Consequently, students can expect not to receive lectures, seminars, emails, office hours, or other support during these days, although certain buildings such as the University Library and Newcastle University Students’ Union are expected to remain open, albeit with fewer staff. Staff will not be paid during this period, although the UCU will contribute £50 per day to each lecturer on strike.
As a reaction to the pension changes, Ronnie Reid, President of the Students’ Union, has proposed a motion due to be debated and voted at Student Council on 8 February declaring that the Union “does not support an increase in Newcastle University’s employer contribution to the USS pension scheme” to close the deficit in the USS, which stands at £7.5bn in 2017 according to the USS, though that deficit figure and the way it was produced is contested by the UCU.
If this motion passes, NUSU would officially oppose an increase of tuition fees or the diverting of funds from student-facing services for the purpose of narrowing pension deficits. It would also become Union policy to not support an increase in employer contributions, instead supporting a “sustainable scheme” in the future. The motion does not mention any alternative method of increasing contributions, such as reducing executive pay or selling financial investments.
Additionally, certain students have reacted negatively to the news that teaching will be suspended. Over 1000 students have already signed a petition started by James Davies demanding “a refund for every lecture missed” from the ‘Newcastle University Management’, since they are “sick of students being stuck in the middle of these debates”.
“These combined factors have left a £7.5bn deficit in the pension scheme. This has impacted the pension sector globally. We are going to work hard to keep our staff and students informed about the situation as it develops and hope that the national negotiations can find a resolution quickly.”
Professor Chris Day, Vice Chancellor of Newcastle University[/pullquote]
However, the strikes don’t look to be cancelled soon. Despite over 30 meetings between Universities UK (UUK), the representative body for university employer’s interests, and the UCU in 2017, talks have broken down. The UCU hopes strike action will bring UUK back to the bargaining table.
Dr Bruce Baker, the President of the Newcastle University branch of the UCU, responded to the concerns raised by students: “We are in this line of work because we care about students, and we realise that students are very concerned about the pending strike. We certainly would not be doing this if we had any other choices open to us.
“Students should be angry, but they should be angry at the management which has brought us to that point. They should be asking the University management how they plan to deliver the education students are going into debt for when the staff are on strike (and not rescheduling teaching later).”
Many students support the industrial action being taken, with other petitions being launched in support of the UCU strike. One petition calls for “an end to these measures [reduction in pension contributions]”, noting that they “will not allow attacks on workers’ rights to divide the university community.”
Mikolaj Serafin, a second year sociology student, has become a student activist in solidarity with the lecturers. He said: “I’m organising with the striking lecturers because I appreciate the hard work they’ve put into making our education a reality.
“The world is precarious enough as it is, so it simply isn’t right to have your chance of a secure future destroyed just like that. Besides, it’s their pensions today, but could be our pensions tomorrow.”
Another student, Emily Sherwood, added: “We are being pitted against each other when we should be working with each other. After all, their teaching conditions are our learning conditions.”
Professor Chris Day, Vice-Chancellor of Newcastle University, provided an explanation as to why the measures are being taken: “There are a number of reasons why we find ourselves in this current situation. Firstly, we are all living longer. This is a good thing, but the increase in life expectancy is faster than the increase in the pension age. Secondly, interest rates have been lower than the rate of inflation for more than eight years now and there is no sign this will change.
He added: “These combined factors have left a £7.5bn deficit in the pension scheme. This has impacted the pension sector globally. We are going to work hard to keep our staff and students informed about the situation as it develops and hope that the national negotiations can find a resolution quickly.”
Assuming the relevance and accuracy of this deficit figure, the 6% increase employer contributions could be detrimental to certain aspects of the University. For example, in the NUSU organisation there are seven different members of staff on the pension scheme, which would equate to approximately an additional £15,000 in expenditure. Assuming that the University does not adjust the NUSU budget, that would result in cuts to student services.
“The University management does not seem to be taking this terribly seriously. They said in a recent newspaper article ’a working group had been formed to minimise the impact of any industrial action on students’. I would have thought the management felt more responsibility to students than that. We certainly do.”
Dr Bruce Baker, President of the Newcastle University branch of the UCU[/pullquote]
However, the £7.5bn deficit figure is a centre of debate between the USS and UCU. According to UCU literature circulating around campus, the scheme is booming and its assets have increased by an average of 12% yearly for the last five years, rather than falling apart, with logicians and academics having criticised the official prediction of a £7.5bn deficit.
This deficit projection is produced through a methodology called “Test 1” that assumes that ‘if every university in the scheme collapsed tomorrow, would the scheme have enough money to pay its pensioners?’ This seems unlikely to the UCU, as rates of net income in universities are skyrocketing. Although this test may be worthwhile for one institution, it seems highly unlikely that 150 top UK universities would collapse at the same time. Simultaneously, the ‘best estimate’ of Test 1 is an £8.3bn surplus, according to the UCU.
Moreover, there is further discontent amongst University staff due to the lack of retirement security the proposed changes will result in. Dr Baker outlined that the changes imposed by University management take away the security that lecturers previously had by attaching pension outcomes to the stock market instead of having a ‘defined benefit’ and payment backed by the University. This is, he claimed, worse since lecturer real wages are 15% lower than they were nine years ago.
According to Baker, this lack of security could be rooted in the intention to take pensions off the balance sheets of the University, leaving universities without the need to guarantee as much funding long term for their staff and the university would be left without risk and liability. Baker suggested that this may have something to do with making universities more attractive to outside, potentially private, investment.
Currently, employers pay 18% of salary before tax, and employees 8% of salary. 26% of the value of their salary ends up going to their pension pot each year. Under the new scheme, this burden will shift. Employees will still pay 8%, but the employer will now only pay 12% to their pension pot. The ‘lost’ 6% will instead go into a separate ‘deficit recovery’ to protect employers’ pension liability from the supposed deficit in the fund.
Baker added: “The University management does not seem to be taking this terribly seriously. They said in a recent newspaper article ’a working group had been formed to minimise the impact of any industrial action on students’. I would have thought the management felt more responsibility to students than that. We certainly do.”
Some students however just want to see a return of their teaching hours. One public event on Facebook displays great concern over the impact the strikes will have on teaching hours, but remains broadly supportive of teaching staff’s efforts:
“We are paying £9000 to the university and it is their responsibility to resolve this. This is by no means belittling the reasons behind the strike, but we have the right to be angry at losing teaching time…. We need to display our discontent for the lack of cooperation by the university with the union. The loss of contact hours will negatively impact OUR FUTURES. I will not stand for this, neither should you.”
Other universities have not accepted the proposed changes to the scheme, with the UCU claiming only 42% of UK universities have accepted UUK’s plan. Warwick and Lancaster are two universities that have committed to maintaining some level of defined benefit. The NUS has also been vocal in its support of striking lecturers, however it awaits to be seen whether a solution can be found before the industrial action starts.
Jamie Cameron is a second year Politics (BA) student at Newcastle University, and a Comment Editor at the Courier. You can find or contact him on Twitter @everegalitarian. You can find his full piece of research on Medium. Or you can read his Courier opinion piece concluding from the facts.
Last modified: 14th November 2018