Managers receive £1m in bonuses at crisis-hit university

13 08 2010

Managers at Britain’s most crisis-hit university have carried off bonuses worth a million pounds.

The performance related pay bonuses at London Metropolitan University amount to a total of around £1m a year for 200 senior academics, managers and members of the university’s executive group.

An internal email sent by Tracey Gormley, a senior adviser at London Met’s human resources department, and seen by A Thousand Cuts states: “PRP [performance related pay] for around 200 Research Institute Directors, Academic Leaders, Professional Managers (PMGs), Senior Managers (SMGs and EG) & Professors totals around £1M per annum.”

It is not clear how much has been awarded to specific managers or the basis on which the awards are calculated, but the bonuses awarded to members of the executive group (referred to as EG in the leaked email) are likely to be especially controversial.

Executive group members were criticised in the official report into the scandal that nearly bankrupted London Met in 2008-9.

London Met was plunged into crisis when Hefce, the agency that manages higher education spending in England, discovered that the university had for years deliberately underreported the number of students dropping out its courses, thus drawing millions of pounds of funding that it was not entitled to.

Hefce clawed back £36.5m from the university, leading to the resignation of vice-chancellor Brian Roper – who was held largely responsible for the scam – and the university’s governing board.

London Met was left in a financial crisis, leading to job cuts and the closure of the university’s nursery.

However, the executive group remained in place, even though the report into the scandal, published last November, said that they “share collective and in some cases line management responsibility for the failings in relation to data quality”.

“Executive Group members and the University Secretary share responsibility for not ensuring that the funding completion issue was discussed, either through in some cases their line management responsibilities or for all in Executive Group meetings,” the report concluded.

A more recent report by law firm Eversheds ruled out disciplinary action against two members of the executive board regarding the scandal.

While £1m has been awarded in bonuses to 200 senior managers, just £100k is paid as ‘merit awards’ to support staff for good performance each year. Academic staff receive a separate bonus worth around £600k last year.

Roper’s successor as vice-chancellor, Malcolm Gillies, recently wrote to all staff asking for suggestions on how to make savings.

Gillies said in a separate email that “the effectiveness of staff reward structures needs to be reviewed”, with a formal review into staff and management bonuses brought forward due to “a perceived heightened sense of urgency”.

However, current management bonuses will not be suspended pending the outcome of the review.

Max Watson is chair of the London Met branch of Unison, the trade union that represents support staff. He told A Thousand Cuts: “London Met managers continue to live in cloud cuckoo land and award themselves bonuses worth £1m per year despite their well documented track record.

“They caused a financial crisis of £38 million, leading to 350 job cuts. They closed our last nursery at London Met, and they tried to sell off the family silver in a desperate bid to make savings. And now they want us to accept a 0.4 percent pay rise, which is in effect a cut.

“This is jaw-dropping hypocrisy and a slap in the face to us hard working, poorly paid support staff, without whom there would be no university.

“Their arrogance is breathtaking, both in staying put and then awarding themselves such obscene bonuses. Any further cuts will be strongly resisted, and until they get real and stop lining their own pockets, there can be no goodwill toward any of them.

“There is a myth being peddled at every level that ‘we’re all in this together’. At London Met, and elsewhere, we’re under no illusions: it’s bonuses for the senior staff, and cuts for the rest of us.”

London Met’s most recent accounts – for 2008/09 – showed a surplus of £9.5m, up from a £12.5m loss the previous year. However, the surplus was only achieved by selling £22m of property.

The university will repay the over-claimed money to Hefce through annual instalments of £10m starting this September.

In 2008/09, 30 members of staff were paid £80k or more, up from 19 the previous year.

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16 08 2010
£1m in bonuses for LMU senior managers » London Met Unison

[…] an article on the findings here. 16 August 2010 | London Met Unison | No Comments […]

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