9 February 2011

Dear Colleague

Staff Remuneration; Changes in Universities Superannuation Scheme; Budget and Future Funding of Higher Education in Northern Ireland

In my previous communication dated 16 September 2010, I committed to keep you informed of developments regarding the national pay negotiations, the proposed changes to the USS pension scheme and the impact of potential changes to the funding of Higher Education in Northern Ireland. There have been significant developments on each of these important matters which I will summarise below.

  1. National Pay Negotiations for 2010-11

The national pay negotiations for 2010-11 have now been concluded, and three Trade Unions (UNITE, Unison and GMBU) have accepted the 0.4% pay offer, but UCU has not accepted the offer.

Since the negotiating process has concluded, arrangements will now be made to implement the uplift in salary scales by 0.4%, and this will be actioned in February 2011. This award needs to be considered in the wider context of the recently announced significant and sustained reductions in government funding to Higher Education.

I have received notification that UCU will be balloting its members on Industrial Action in respect to job protection and pay. Job security issues are a serious concern for all, and are a matter for individual institutions. The Universities and Colleges Employers Association (UCEA) has no mandate, and never has had, to engage in negotiations on national job security provisions, but can support the process of workforce change within institutions. At Queen’s, we have well-established procedures to manage workforce change, which are utilised in consultation with the recognised trade unions.

  1. Proposed Changes in Universities Superannuation Scheme (USS)

USS needs to remain sustainable, attractive and affordable for all: employers and members, both current and future. Pressures on the Scheme have arisen due to increasing life expectancy, the rate of pay increases over the last decade and the volatile investment market.

The USS Board previously agreed that, subject to consultation, a package of changes to the Scheme should be introduced from April 2011. In October 2010, members and prospective members of USS were provided with detailed information from USS Ltd, which set out the proposed changes to the pension scheme and the consultative processes available for colleagues to register their views on the proposals.

Within Queen’s, consultative meetings with the three Trade Unions (UCU, UNITE and NIPSA) took place on 15 and 20 December 2010, at which the proposals were examined in detail. These meetings were very constructive and, whilst there continues to be a difference of view on some matters, there was a meeting of minds on a number of important issues. The University has provided feedback directly to USS Ltd on the outcome of these consultative meetings. In the light of these comments, and those from other universities, the USS Board will be considering some modifications to the original proposals in relation to the re-joining provision, the promotion of support staff into USS-eligible posts and increasing the proposed caps on inflationary increases to pensions in payment, deferred benefits and the revaluation of CARE benefits.

Notwithstanding these modifications, I have received notification that UCU will be balloting its members on industrial action in respect of the changes to USS. The position of the University is that pension provision remains an important component of the total remuneration package of our staff. Given the challenges facing USS, and indeed many other pension schemes, significant changes require to be made to ensure that these benefits remain sustainable, attractive and affordable.

  1. Proposed Changes to the Funding of Higher Education in Northern Ireland

The Department for Employment and Learning (DEL) has issued its draft Budget Statement for 2011-2015. It makes for stark reading, and has significant and long-lasting implications for the Higher Education sector in Northern Ireland. The Budget proposals are extremely disappointing with a disproportionate reduction being imposed on Higher Education – and this in spite of the focus on economic regeneration in the Programme for Government and the recognition, in the recently published draft NI Higher Education Strategy, of the critical role of the universities as key drivers of the regional economy. The University will respond to the consultation on the Budget proposals. (The draft Budget and NI Higher Education Strategy can be accessed at www.delni.gov.uk.)

The Department has proposed that the “block grant” support to universities, of £230m, be reduced by £68m by 2014-15, a cut of 30%. It has stipulated that this reduction will be achieved through “efficiency savings” or a cut of some £28m in the block grant with the remaining £40m being delivered through reductions in student numbers, better targeting of existing student support, or through additional income from student deferred fees. The University will continue to meet with DEL and other stakeholders to press the case for public investment in the Higher Education sector to be protected as far as possible.

Following the Budget consultation process, and publication of the agreed DEL Budget, the University Management Board will finalise plans to address the government funding levels for the period 2011-15. These plans will be informed with the full engagement of Senior Managers, staff and students, including the Trade Unions and the Student Executive, and will be brought to Senate, our Governing Body, for approval.

At this particularly challenging time, I can assure you that Queen’s will not be found wanting in embracing the change that is required. There will be no dilution of our ambition, we will examine how we can undertake our business in a better way, look at how we can leverage still further our government funding, and continue to manage our resources in an effective and strategic way to meet the expectations of our stakeholders.

I recognise that we are, together, facing challenging times. The situation is serious but, at Queen’s we have demonstrated our ability to respond successfully to challenge. Indeed, the University’s success in leveraging the block grant of £110m to generate total turnover of some £300m is just one way in which we will mitigate the impact of these cuts.

Thank you for your ongoing support and I will provide you with further information in due course.

Professor Peter J. Gregson

President and Vice-Chancellor