Image: Leeds students supporting the #USS strike, February 2018. Rights: Alarichall, Wikicommons, Creative Commons.
If members of the University College Union (UCU) vote down the latest deal from Universities UK (UUK), the strike at over 60 British universities might go on through June. By the time it ends, students at the affected universities will have experienced disruption on a scale never seen in British higher education.
Academic staff are fighting changes to their pensions – changes that will mean a dramatic drop in the benefits that all staff, and especially newer and younger ones, can hope to receive from the Universities Superannuation Scheme (USS). But the strike is about more than that, or at least it should be. British universities have changed in profound ways over the last thirty years. Students pay more for their education, employees enjoy less job security and stagnating wages, and the whole sector operates on (rather inefficient) business lines.
The militancy of younger academics is due as much to these wider changes as it is to the pension dispute. They are the ones who most consistently – and successfully - mobilised against the first deal offered by UUK on March 12. They are the ones most militantly opposed to the second deal offered on March 23, which calls, amongst other things, for an expert panel to investigate the valuation of the USS fund, for a “guaranteed pension broadly comparable with current arrangements,” and leaves open the possibility of “alternative scheme design options”. With the slogans “#nodetriment” or “revise and resubmit,” they reject the deal as insufficient. They either want clarification of its many ambiguous clauses and terms – what, for instance, falls under the heading of “broadly comparable”? – or the complete abandonment by UUK of all proposed changes.
Junior and senior academics stood together on picket lines and remained united against changes to the USS throughout the full 14 days of industrial action. The latest deal has exposed cracks in their unity (although it should be emphasised that support or opposition to that deal does not cleave neatly along generational lines), but no real splits as yet. Regardless of whether UCU members vote to accept the deal, or reject it and extend the strike further, we need to think about what happens to the unprecedented mobilisation of university staff after the strike ends.
Junior academics have no choice but to connect their shabby contracts with the latest attack by universities on the USS. Senior academics have not always shown the same concern or willingness to act when it comes to casualisation. The UCU, for instance, has struck twice to protect pensions in this century but not once to resist insecure work.
We need to do more than simply demonstrate that these two issues are connected in some vague and indirect way. We need to recognise these connections and then act on them – and fight against casualisation with the same unity of purpose that university staff have shown against changes to their pension.
Of all the issues that could provoke a strike, changes to a pension plan are among the more difficult ones to explain to a general audience. Each side produces its own set of figures. Each side provides its own interpretation of any numbers that both sides can agree on. To the uninitiated, faced with conflicting claims about an arcane subject, these conflicting numbers and interpretations can appear equally wrong – or equally right.
The debate between the UCU and UUK falls into this category even more than most. To make matters worse, the argument does not directly concern the past performance of the USS fund, an argument that could at least draw on existing evidence. The argument revolves instead around the future performance of the fund. Speculation replaces evidence, and each side is left to insist that things are rosier or more dire than the other side will allow.
Perhaps that is not entirely true. We do have the record of past official speculations about the future of the fund, from 2008, 2011, 2014, and September and November 2017. Each projection has proved gloomier than the last. The USS valuation has consistently outperformed every one of these projections. Even the most generous projection, in 2008, has been surpassed by the fund’s performance in recent years – and this despite a blip caused by the financial crisis of 2008 and the recession that followed it.
The most recent projections, in September and November 2017, suggested that the fund stood in serious danger, and that its valuation would stagnate for at least the next ten years. This was due to the desire of UUK to “de-risk” – that is, to move the majority of the fund’s investments from higher-earning stocks and bonds to lower-paying, but less risky, government securities.
The September valuation foresaw gradual de-risking over time, while the November valuation foresaw de-risking straight away. Given that interest rates are historically low, these moves to de-risk the USS created a succession of projected deficits that require drastic changes to the scheme’s structure. The quicker the de-risking took place, the higher the projected deficit – hence why the November valuation exposed a higher “deficit” than the September valuation.
There is little evidence to suggest that these were necessary or helpful assumptions. Uuniversities are building new facilities at a rate that suggests they do not expect a financial disaster of the kind that they insist will require sweeping changes to the USS scheme. Indeed, many commentators have already pointed out that universities’ building mania is behind their attempts to de-risk the USS scheme. The less risk associated with the USS, the lower the interest rates at which universities can borrow to build the next gym, giant TV or other big-ticket item deemed necessary to heighten “student satisfaction.”
Casualisation and pensions
The link between casualisation and pensions is not as obvious as the one between this building binge and proposals to change the USS, but the link is there. The vast increase in so-called “atypical” staff, those on a variety of casual, short-term and insecure contracts, has all taken place in the last twenty years. Since 1999, the number of academic university staff has doubled from 130,000 to 270,000, and the increase has been made up almost entirely of those on atypical contracts. Their numbers rose from 0 to 75,000.
This change has profound consequences for the share of total university spending going to teaching staff, and to their pensions. Casual staff earn far less than permanent staff. Very few hourly-paid teachers will even get close to the minimum threshold for income tax, currently £11,500 per year. Yet they are still automatically enrolled in the USS, if they are employed directly by the university.
Younger academics who spend time on casual contracts will enjoy lower pension benefits, even if the proposed changes to the USS do not go through. Their final salary, and average income over their careers, on which their final benefits are currently based, will be lower. This is not just because their initial income on casual contracts are very low, but also because their promotion up the career ladder will necessarily be delayed by the time spent outside a tenure-track position. If they reach Senior Lecturer, Associate Professor or Professor status at all, they will do so, on average, later than their older colleagues. Their average career income, and their likely final salary, will suffer as a result.
Earning less now means earning less in retirement. That is the logic now faced by younger academics on precarious contracts. For older academics, or for those who did not suffer a prolonged period on casual contracts, the link between casualisation and pensions is less direct – but it still exists.
The average junior lecturer receives somewhere in the order of £30,000, and senior lecturers, associate professors and professors can receive significantly more than that. Yet even here, pay has not kept pace with inflation for some time. In 2016, the UCU claimed that the salaries of permanent staff had declined by 14.5% in real terms since 2009.
The great increase in the number of qualified academics with PhDs or working towards their PhDs, many of whom work on casual contracts in the hope of achieving a permanent position, means universities do not feel the need to keep salaries in line with inflation – let alone any increases above inflation – in part because they have access to a vast pool of qualified labour, which has been disciplined to accept (if not to like or support) contracts that previously did not exist in academia. In this indirect way, casualisation has exerted a downward pressure on salaries, and thus on pension benefits, for older colleagues.
The vast change in the ratio of casual to permanent staff since 1999 raises further worries. The more that casualisation takes root at universities, the lower the average income per university teacher. This means that contributions to the USS scheme per person will fall as a consequence. We could take that fact even further. Before 1999, the vast majority of teaching staff subscribed to the USS were on permanent contracts. As they retire, their level of benefits will stay the same (here’s hoping!), while younger subscribers to the scheme, who, because of casualisation and the wage stagnation of permanent staff that has accompanied it, will contribute less and less to the USS because they will be earning less and less.
Now, the USS is not a Ponzi scheme, where the benefits paid out directly rely on the contributions paid in. The USS fund amounts to around £60 billion. In the year ending 31 March 2016, for instance, the scheme received £1.9 billion in contributions and paid out £1.9 billion; in the year ending 31 March 2017, the situation was even better: £2.1 billion came in, and £1.8 went out. Even if all contributions ceased, the fund could continue for another 20 or 30 years. The security of the fund itself is not in question.
That does not mean that older academics are completely out of danger. This overhang of retiring full-time academics drawing money out and a casualised workforce putting less money in might not put the fund in jeopardy, but it could encourage Universities UK to renew their calls for drastic changes to the pension fund. UUK has shown that it is willing to use any argument that will allow university managers to “de-risk,” and they would seize on this argument as much as on any other.
The greatest danger of all is that the entrenchment and expansion of casual academic labour will lead to a permanent split between a permanently-employed salariat, and an academic precariat below them. That has not happened during the current strike. Precarious workers, some of whom undoubtedly believe that their chances of ever seeing a pension – of ever being in a position to retire at all – are small, have nevertheless swelled the picket lines and joined the strike even when it has meant severe financial hardship.
Yet we should not complacently assume that this unity will go on forever. If casual workers feel that their older colleagues are happy to accept their support in strikes to defend their pensions, but that their support will not be reciprocated in the battles over casualisation to come, they might well strike off on their own and leave the UCU as a kind of craft union of privileged permanent staff. A breach in the unity that has so far held firm over 14 days of strike action would have direct consequences for the USS. With the workforce divided, UUK would feel emboldened to push further changes to the scheme. With the workforce divided, the UCU and whatever organisations of casualised workers exist would be in a much weaker position to resist them.
And the pension scheme would not be the only victim of this breakdown in intergenerational unity. The university is not just the domain of academics and UCU members. Each campus relies on an army of non-academic workers, many of them invisible to the academics who work there. They keep the university clean, fed, housed and warm. This strike could become a major step in a wider struggle that brings in these workers – some of whom, at the London School of Economics, the School of Oriental and African Studies and elsewhere, have already taken strike action themselves - and gives more of them the confidence and agency to demand better pay, proper contracts, and dignity.
Nor is the university the sole property of those who work there. There would be few academics if there were no students, and students have faced a series of attacks in the last twenty years on the same scale as the attacks on their teachers. The introduction and then steep rises in tuition fees, the withdrawal of maintenance grants, the costs involved in student accommodation, have all made learning a costly endeavour. Education now means debt as much as it means knowledge. The best way that UCU members can repay the solidarity shown by their students is to take up these issues with new enthusiasm, and in a more direct way.
These goals are not possible, or are made much harder, if the current UCU strike fails. To do this we need to link issues that are not often linked, and to do them in practical terms and not just in structural, indirect terms. Linking casualisation and pensions together, so that retirees can see the real stake that they have in the conditions of their juniors, is one way to do this. It is not the only way. This is a conversation that will go on all over the UK, as we try to transform universities from educational businesses to centres of real learning – centres of learning which work for everyone’s benefit, and not just for a narrow layer of managers and corporations.