Universities and colleges are shedding their staff by force and cajolery. THES reporters examine the options.
An estimated 3,000 jobs have been lost in universities this year, writes Alan Thomson. Voluntary redundancy, early retirement, redeployment and compulsory redundancy have been used, depending on what a university can afford.
There are no exact figures for past or projected redundancies. But the new universities, because they lack the cushion of reserves and assets built up by the old universities, have been forced to cut more jobs and make more redundancies.
In many cases these institutions have had to resort to compulsory redundancies as appeals for volunteers have failed to produce sufficient numbers. Voluntary redundancy is also too blunt a tool to achieve down-sizing in specific departments. In such cases, redeployment can absorb some staff but the university saves little overall on its wages bill.
Early retirement has consequently emerged as the favoured way of shedding staff in both the old and new institutions. In the past much of the cost of this process, which is open only to staff aged over 50, has come from institutions' respective pensions schemes. It is anticipated that old universities will continue to shed staff steadily through early retirement.
But for new universities this option is likely to be removed by Government proposals to alter the new universities' Teachers' Superannuation Scheme (TSS) from April 1. The TSS is state-run and funded jointly by employers at colleges, schools, new universities and local authorities. It is not a pensions scheme in the normal sense in that it has only nominal assets.
The changes mean that the TSS will cover less of the cost of early retirement with a corresponding increase in the costs to institutions. Government figures show that if, for example, a university wished to shed 50 posts through early retirement, then it could have to find some Pounds 46,000 for each post or a total cost of around Pounds 2 million from its own budget.
Geoffrey Talbot, assistant general secretary for the Association of University Teachers, is a member of the teachers panel of the TSS working party. Speaking in his AUT capacity, Dr Talbot said that new universities would be hit hard by the proposals.
He said: "The proposals could lead to a vicious circle for the poorer new universities as they seek to cut costs by shedding staff which costs them money in terms of early retirement."
Dr Talbot said that old universities would not be affected by the proposed changes since they contribute to the Universities Superannuation Scheme. It is managed by an independent trust composed of AUT members, employers and nominees and has real assets of around Pounds 12.5 billion.
As employers, old institutions contribute more than double (18.55 per cent of salary costs) the amount paid into the TSS by the new universities (8.05 per cent).
COMPULSORY REDUNDANCY
A desire to teach prompted Sarah Katz, 47, to switch from consulting to lecturing in human resource management in the business school at London's South Bank University in 1991. She also became actively involved with Natfhe.
In June, after a review of the school resulted in cuts and job losses, its 25 academics were invited to apply for 22 positions. Staff were told that if they did not apply, they would be made compulsorily redundant.
"Natfhe advised members not to apply because there appeared to be no criteria to support making one person redundant rather than another," Ms Katz says.
She refused to apply despite pressure from staff and students, and left with a "reasonable" redundancy package. She is adamant that she was sacked. "It was a decision not to take part in the process, rather than a choice to be without a job," she says.
Trevor Watkins, South Bank's deputy vice chancellor, said: "Natfhe refused to become involved in the situation and the university decided to take a fair and equitable approach to the fact redundancies needed to be made."
EARLY RETIREMENT
Roy Short was principal lecturer in mathematical sciences at De Montfort University for 25 years. After taking early retirement he left in August aged 50, the scheme's minimum age eligibility.
The package included about nine months salary and a pension, which is usually not available until age 60.
Although the decision took some time to make, as he weighed up the financial implications, Mr Short was ready for a new challenge. He was already running a business importing and selling oriental carpets and can now devote more time to it. Leaving De Montfort was very positive for Mr Short, who has "absolutely no regrets".
"Teaching a much bigger student body, with to some extent lower qualifications and in some cases poorer motivation, has meant that for many the process of teaching is far less fulfilling than it used to be," he says.
Mr Short now teaches at the university and said this could raise the question of whether early retirement was being correctly implemented, but he did not think four hours a week for six months was very significant (Chris Johnston).
FURTHER EDUCATION Too late to retire early
Further education colleges now have about 10,000 fewer staff than at incorporation three years ago, writes Harriet Swain. Ruthless restructuring has played a vital part in allowing colleges to achieve 20 per cent efficiency gains since 1993.
But proposed changes to pension arrangements, combined with the end of the Further Education Funding Council's restructuring scheme, have left them wondering where they will now find the year-on-year efficiency gains of 5 per cent demanded in last week's budget.
Cutting staff has never come cheap. By March last year, the cost to colleges of early retirements and redundancies had reached Pounds 239 million, including initial pay-offs and pension enhancements.
Just over Pounds 46 million of this sum was met through the Further Education Funding Council's restructuring scheme. This scheme ended in August and the council is still deciding whether or not to reinstate it this year.
The number of staff who left with grants from the fund accelerated sharply between April and August 3. An estimated 6,200 staff left as colleges raced to complete redundancies before FEFC help dried up.
Last month, the Government also announced consultation on plans to make colleges pay part of the costs of early retirement.
Until now, pension costs have been met entirely through the Teachers' Superannuation Scheme. The only direct cost to colleges of early retirements has therefore been any enhancements to pensions they choose to make, plus severance payments. This has made it a relatively painless way to restructure.
The practice throughout the further education sector has been to treat all lecturers over 50 as eligible for early retirement. Of the 7,000 staff who received grants from the FEFC restructuring fund between April 1993 and March 1996, more than 4,400 left with early retirement or a mixture of early retirement and redundancy.
Colleges argue these type of packages will become impossible following changes to the pension rules. Instead, they will be forced to make more compulsory redundancies and to lay off younger staff.
Marcia Roberts, director of professional services at the Association of Colleges said: "Effectively, it will make early retirement a thing of the past."
VOLUNTARY REDUNDANCY
Until September Annie McLean, 54, was a part-time lecturer in the school of design and media at Westminster University, which she had joined in 1973, when it was the Harrow College of Technology and Art.
Last year the programme she taught was franchised to a sixth-form college in Harrow. Ms McLean and the course leader were asked to oversee the transition for the first two years.
In May, the university decided to transfer responsibility for the course to the college from August 1997 and gave her one year's notice. Attempts to redeploy her were unsuccessful.
"I feel that the management have been very abrupt. What they have done is covered their backs, they have done all the things that they had to do contractually."
To make matters worse, there was no farewell party.
Ms McLean would still like to teach, but, she says: "The chance of getting back into university at 50-odd is virtually nil". After accepting a voluntary redundancy package that included one year's salary, Ms McLean is now doing private tutoring and receives a pension from superannuation contributions.