Skip to content
Skip to navigation menu


Vice-Chancellor update – financial position, national pay negotiations

9 September 2010

I am happy to report that the University remains in a sound financial position.

The accounts for the 2009/10 will not be finalised for some time. However, I can tell you provisionally that the University is expecting to have a contingency fund of around £5M for the year to help address the uncertain financial future. This has been achieved by considerable efforts to control costs and increase income across all our Schools and Directorates. Once again, I would like to thank all staff for your suggestions and your hard work on this. The administrative Directorates have delivered substantial year on year savings to allow expenditure to be focussed on our core academic activities. The initiatives the University has taken over the last 18 months have reduced running costs overall: our communal action on spending, close management of recruitment and increased use of redeployment have enabled us to sustain employment to date.

The University remains in as strong a situation as anyone in the Higher Education sector to cope with the difficult financial climate. Unlike other institutions, there are no plans for a University-wide redundancy scheme, based on currently announced financial allocations. We are also able to fund this year’s incremental pay awards, which will represent a 3% salary increase for 42% of the total University staff. We have absorbed the 2% increase in USS contributions this year at an additional cost of £2M and could also accommodate the additional £1M cost of the proposed 0.4% pay award for 2010-11.

Nevertheless, the situation facing the higher education sector remains extremely difficult. We have already had to absorb one round of savings and next month’s Government Comprehensive Spending Review looks likely to impose further severe cuts for the lifetime of this parliament.

While I can assure you that we are making representations at both the Welsh Assembly Government and at Westminster, emphasising the many benefits that University education and research bring to the economy and that cuts to higher education can only be counter-productive in the long term, we are realistic and fully expect that alongside the rest of the public sector budgets higher education will take its fair share of cuts.

National pay negotiations

Staff unions have also been raising the issue of higher education funding with Government and have also been continuing to press their pay claim with the national employers’ body, UCEA.

The University believes it is important to set out for staff its view of that pay claim.

The joint union claim is for a 4% pay increase for this year which is, quite simply, unaffordable for UK universities. Raising the pay bill when no further funding has been identified to meet the cost will lead to job losses across the sector and considerably fewer resources for teaching and research. Strike action on this issue would also harm the education of students, delay research and damage the very activities which bring income into universities. In particular, action that damages international student education and the reputation of the UK overseas will affect an income stream which has enabled this University and others to maintain current employment levels.

There is currently a pay increase offer of 0.4% from UCEA, which represents most UK universities, including Cardiff, in national pay bargaining. While this is less than many of us would like, it represents the absolute maximum that the sector can afford this year. The unions have not explained how they expect universities to meet the additional cost of their claim at a time when funding is being cut.

Nationally, the Universities and Colleges Union (UCU) is also continuing to press for redundancy and other change management procedures to be negotiated with the UCEA, rather than by each of the 160 plus separate employers. At Cardiff, the University and its three recognised unions have just signed a major package on change management which addressed these issues. The agreement was influenced by the UCU’s own model job security policy and goes beyond what is required by law. Despite our strong performance locally, the UCU leadership has declared itself in dispute with Cardiff and many other universities as there is no national collective agreement on this subject.

Finally, despite escalating costs, the UCU is opposing changes proposed to the USS defined benefit pension scheme. The University does not agree with UCU on this matter but supports the proposed changes as a way of ensuring the long term viability of the USS for current and future members. The USS scheme will continue to be a highly favourable defined benefit scheme, particularly when compared to the changes being made in many other schemes, both in the public and private sectors. You can find further information on the University’s position on all these issues at a new section of the University website, at

Future outlook

I know many of you are concerned about the difficulties we face in the current financial climate. I share that concern, and the University will continue to do everything it can to minimise impact on staff.

We should also remember that Cardiff University has many strengths. We have just enjoyed a record year for new research grants, with £149.85million of new awards won in 2009/10. This is a remarkable achievement in the current funding climate. We have secured outline planning permission for our new Maindy Park Campus and are pressing ahead with plans for the first building on the site, which will be funded from ringfenced capital grants. This will greatly enhance our research capacity, as will the three recently-launched new University Research Institutes. Another development, the Cochrane Building at Heath Park, will open up new dimensions in our healthcare teaching for next year. Our investment in the President’s Scholarships Scheme has attracted applications from some extremely able new postgraduates. We also continue to have a strong performance in the recruitment of international students, which is so important to the financial sustainability of many of the University’s Schools and will help us to minimise the effects of the cutbacks in other income on staff.

These are all significant developments. I firmly believe that with a concerted and united approach from all of us, Cardiff University can sustain itself through the current national financial difficulties and enjoy a strong and successful future.