Newcastle: A full explainer of the UCU Strikes, why they are needed, and why you should support them

Teaching staff are striking, students are organising in solidarity. They find themselves pitched against university management and NUSU President Ronnie Reid. 190,000 lecturers and staff at long-established “pre-92” universities, including Newcastle University, face an effective cut in pensions of several thousands of pounds a year, varying between members of staff, in a change to the Universities Superannuation Scheme (USS). The changes would also remove the guaranteed pension income based on the years staff work and pay into the system, and instead risk pension payments on stock market investment outcomes.

All of this has resulted in an explosion of activity. There is already an expanding grassroots student campaign working in solidarity with the striking staff, and lecturers have been seen tweeting about emails of student support. The National Union of Students (NUS) has already declared its support and solidarity for striking lecturers. However, some universities such as Newcastle are no longer NUS affiliates and must make their own decisions about supporting the strikes.

Ronnie Reid, President of the Newcastle University Student’s Union, has proposed a motion due to be debated and voted on the 8th February declaring that the Union “does not support an increase in Newcastle University’s employer contribution to the USS pension scheme” to close the supposed deficit in the USS.

If this motion passes, it would effectively mean that the Newcastle University Students Union would expect staff to accept the cuts or raise their own pension contributions, opposing any university or student resources being diverted to them. The wording of this motion would mean many measures would be ruled out, even excluding the curbing of controversial high executive pay at Newcastle University to help higher contributions to staff pensions.

This motion rests on the claim that there is a £7.5Bn deficit in the USS pension scheme. This was circulated as being £17.5Bn for over a week through the motion found online, before Reid corrected the figure to the official USS total after I contacted him asking for his source.

Yet, the striking Universities and Colleges Union (UCU) hotly dispute the idea that there is even a deficit in the USS fund whatsoever. According to UCU literature circulating around campus, the scheme is booming and its assets have increased by an average of 12% yearly for the last 5 years. Academic research from First Actuarial also predicts that the USS scheme is solvent without need to rely on the scheme’s assets: payments to pensioners are predicted to match payments coming in from existing staff for the next 40 years.

Academics have criticised the official USS prediction of a £7.5Bn deficit. This deficit projection is produced through a methodology called “Test 1” that assumes the premise ‘if every university in the scheme collapsed tomorrow, would the scheme have enough money to pay its pensioners?’. Test 1 assumes that all of the high value assets held by USS would be rapidly transferred to government bonds (due to scheme closure), which offer returns below the rate of inflation because of historically low interest rates. Interest rates are so low because of quantitative easing (a process of printing new electronic money) and low Bank of England base interest rates (the interest rates with which they lend money to private banks).

USS is structured in such a way that if one university collapses, the rest will pick up the liability for the university’s staff pensions. However, the simultaneous bankruptcy of the top ranking universities in the scheme, 150 in number is a high bar for Test 1 to set. This complete collapse seems especially unlikely to the UCU, as rates of net income in universities are skyrocketing. Although this test may be worthwhile for one institution, it seems highly unlikely to the UCU that 150 top UK universities would collapse at the same time. Simultaneously, the ‘best estimate’ of Test 1 is an £8.3Bn surplus, according to the UCU.

In effect, this notion of a £7.5Bn deficit rests on an outcome which is practically unthinkable. Top universities from Cambridge to Newcastle even being allowed by the government to collapse simultaneously seems unlikely when our financial institutions received massive bail-outs in 2008, and when our universities are also one of the UK’s most internationally competitive institutions.

The supposed deficit in the USS scheme appears to be unreliably true at best, or even completely invented. Despite this, the scheme’s managers seek to go ahead with plans to cut employer payments into staff pensions. Currently, Employers pay 18% of salary before tax, and employees 8% of salary. 26% of the value of their salary ends up going to their pension pot each year. Under the new scheme, this burden will shift. Employees will still pay 8%, but the employer will now only pay only 12% to their pension pot. The ‘lost’ 6% will instead go into a separate ‘deficit recovery’ pot to protect employers’ pension liability from the highly disputed £7.5Bn deficit in case of the complete collapse of USS and its 150 university backers.

Not only is this a cut of nearly a quarter to employee pensions every year, but it is being justified by a worst-case scenario outcome that many readers, students, and academics will find absurdly unlikely. What this change will do with certainty is reduce the amount that every member of staff using USS has to rely on in their retirement, or given to their families in the event of their death.

Some members of the UCU and other activists fear that this effective cut to pensions through a stock market-based pay-out system has very little to do with saving USS, and more to do with enabling the privatisation and marketization of education and universities.

In conversation with Bruce Baker, President of the Newcastle branch of the UCU, I was told he thought it was possible that part of the motive behind the change may be so that universities can take pensions off their balance sheets and no longer record them as a liability, making universities more attractive to private investors. Because pensions would be left to the stock market, universities would no longer need guarantee as much funding long term for their staff. If this is true, all the risk would be externalised to teaching staff for the sake of improving the balance sheet of universities.

This explains the difference between the old “Defined Benefit” (DB) system and the new “Defined Contribution” (DC) system. Currently, under Defined Benefit, staff would know precisely how much they would be paid by their university employer in their old age, based on their previous salaries and the years worked. Under the new plans, contributions to individual’s pension funds are gambled on the success of financial investments on the stock market under the Defined Contribution system.

Lecturers and staff affiliated with the Universities and College Union (UCU) are planning to strike at 61 universities including Newcastle University for a total of 14 days: The 22nd, 23rd, 26th, 27th, 28th of February and the 5th, 6th, 7th, 8th, 12th, 13th, 14th, 15th, and 16th of March. The rate of support for strike action at Newcastle University was very high: On a turnout of eligible voters of 62.1%, there was a rate of support of strike action of 90.0%. It is possible this strike action will be followed with further action if the UCU reaches such a decision.

According to emails sent out to Newcastle University students by administrative staff, students can expect not to receive lectures, seminars, emails, office hours, or other support during these days. It is UCU policy for lecturers not to break the strike by doing any of these kinds of work. However, the University claims buildings such as the library and Student’s Union will still be open, but potentially with fewer staff. This will have a negative impact on student learning, but also on staff, as they can expect not to be paid during this time and will have their academic work hampered. However, the UCU has set up strike pay for its members of £50 per strike day. Newcastle University currently has no public plans to reimburse students for lost teaching hours, but have plans to not assess students on topics they have missed.

In view of the coming changes, some students and staff at Newcastle University are organising in solidarity, supporting the strikes, and putting pressure on the university management. I spoke to Lee Clifford, a second year Politics and Sociology (BA) student playing in active role in student organisation around the strikes, who had a point to make about the broader trends he considers this strike action to take place within:

“It is vital that we look beyond the fourteen days lost and see the bigger picture; a neoliberal ideology which has saddled many students with debt for life and now attempts to use this commodification to pit students against university staff while stripping them of job security. It is for these reasons that students must support the upcoming strike action, side with university staff and take a stand against this pervasive ideology at the root of these changes.”

In any case, NUSU President Ronnie Reid is set to face heavy resistance over his motion. Most of the active student organisation visible to this reporter on campus believes students should stand by solidarity with teaching staff against the University executive. I found no evidence of any grassroots organisation against the idea of staff striking to protect their pensions. Although, some students are chiefly concerned with the loss of teaching hours: one popular petition with over 1000 signatures at the time of writing demands “a refund for every lecture missed” from the ‘Newcastle University Management’, since they are “sick of students being stuck in the middle of these debates”.

Amongst students acting in solidarity with the strikes, campaign literature, banners, and plans for protest are all in the works, and students are anxious to work in solidarity with striking staff. Student activists also seek to propose their own council motion expressing solidarity with lecturers and supporting the strike action.

I spoke to some student activists to get their view. Mikolaj Serafin, a second year sociology student, said “I’m organising with the striking lecturers because I appreciate the hard work they’ve put into making our education a reality. The world is precarious enough as it is, so it simply isn’t right to have your chance of a secure future destroyed just like that. Besides, it’s their pensions today, but could be our pensions tomorrow.” Another student, Emily Sherwood, adds “We are being pitted against each other when we should be working with each other. After all, their teaching conditions are our learning conditions.”

These students are set to lock horns with the President of the Union, and his motion effectively opposing the strike action. I interviewed Ronnie Reid, NUSU President, by email to get his thoughts on the UCU strike action. He seemed to repeat the heavily disputed £17Bn figure, but this was before he redacted this figure on the 6th February. This is what he had to say:

“I profoundly value the positive impact which every lecturer has on the lives our student body, and the remuneration of those on the USS pension scheme should be fair and sustainable.

Unfortunately, it has been reported that the USS pension scheme is running a £17 billion pound [sic] deficit and if that is the case then clearly the Trustees need to take some form of action to close the gap. Contributions by both employer and employee are already high and I am sure there is no appetite to raise contributions further. If the current system and benefits package is reliant on increasing the employer monthly contributions further I would not be in favour of any such a proposal given that this may result in a diversion of funds from other areas such as learning and teaching or drive up fees.”

The strike action is already making waves in student politics on Newcastle University Campus, and the impact goes all the way to the top. Away from the heated debates of student council, other battle lines are drawn. Talks between Universities UK (UUK), the representative body for university employer’s interests, and the UCU, representing lecturers, have broken down. The UCU hopes strike action will bring UUK back to the bargaining table. I spoke to Professor Bruce Baker, President of the Newcastle University branch of the striking UCU, to hear his explanation:

“Academics and academic-related staff deal with students every day, whether teaching in the classroom, supervising in labs, helping with research in the library, solving computer catastrophes, or counselling students through difficult times. We are in this line of work because we care about students, and we realise that students are very concerned about the pending strike. We certainly would not be doing this if we had any other choices open to us.

After completing graduate study and often going through several years of precarious, temporary employment, most lecturers only begin their careers when they are thirty or so. That gives us less time to pay into a pension. And since 2009, our pay has not kept pace with inflation. Our real wages are over 15% lower now than they were nine years ago. The one reassurance we had was that we knew what to expect in terms of a pension. USS was a defined benefit scheme where the pension pot you got when you retire was based on what you had earned and how long you had been paying in. The changes that Newcastle University’s management is imposing on us takes away that security. They are changing the scheme to an entirely “defined contribution” scheme — you put money in, the pension scheme invests it, and you get whatever happens to be there when you retire. How can we plan our lives with that kind of uncertainty? More to the point, we want the best and brightest and most committed people going into universities to work. We don’t get bonus payments when the University does well, and we don’t really want them. If we did, we would all be bankers. We want security so we don’t have to worry and can focus our energy on doing the best research and the best teaching we are capable of. But why would the best and the brightest teachers and researchers go into a university career with such a terrible pension scheme? This threatens the entire profession and will have long-lasting effects on the quality of Newcastle University if it goes through.

We are reluctant to take action, but we are preparing for the largest and strongest industrial action our union has ever taken. In the past, we have been on strike for a day or two and then come back and worked extra hard to reschedule classes. This strike will begin on 22 February and escalate week by week up to the Easter break. Students should be angry, but they should be angry at the management which has brought us to that point. They should be asking the University management how they plan to deliver the education students are going into debt for when the staff are on strike (and not rescheduling teaching later). The University management does not seem to be taking this terribly seriously. They said in a newspaper article yesterday “a working group had been formed to minimise the impact of any industrial action on students”. I would have thought the management felt more responsibility to students than that. We certainly do.”

Hitherto, we haven’t discussed the views of Newcastle University’s executive. I also reached the office of Professor Chris Day, Vice Chancellor of Newcastle University for his comment:

“I do recognise that staff and students are understandably concerned about the proposed changes to the USS pension scheme and also the potential impact that any strike action might have.

At the moment, we don’t know how many of our staff will take strike action so it is difficult to gauge what that impact will be. While we appreciate the strength of feeling in relation to the pension changes that has led to this, we need to minimise disruption for our students and will remain open throughout the strike days.

The decision to take industrial action is a national issue which cannot be resolved locally by the University. However, we are working closely with the UCU both locally and nationally and will continue to do so.

There are a number of reasons why we find ourselves in this current situation. Firstly, we are all living longer. This is a good thing, but the increase in life expectancy is faster than the increase in the pension age.

Secondly, interest rates have been lower than the rate of inflation for more than eight years now and there is no sign this will change. These combined factors have left a £7.5bn deficit in the pension scheme. This has impacted the pension sector globally.

We are going to work hard to keep our staff and students informed about the situation as it develops and hope that the national negotiations can find a resolution quickly.”

It is important to note that here the Vice Chancellor refers to the nationwide USS pension scheme with the heavily disputed quote of a £7.5bn scheme, the same NUSU President Ronnie Reid first claimed to be £17.5Bn, and not a local scheme specific to Newcastle.

However, members of the UCU, and many students at Newcastle believe there is much Newcastle University can do to resolve this issue locally. Hanna Tamminen, second year geography student and Feminist Society International students rep had this to say:

“The biggest reason for striking and fighting the pension cuts is clear: the absurdity of the situation wherein members of staff are being pressured like this. Pensions are something to rely on. Moreover, in academia it takes a long time to get the qualifications to gain that pension. Pension cuts seem absurd when so much money is already invested in University education, and members of staff can’t be disregarded when there are such big sums of money at stake.”

However, it is not only students getting involved and sharing the view that Newcastle University can in fact do more. Non-academic staff at Newcastle University are also getting involved in campaigning. One worker in Estate Support Services, who wished to be referred to only to as “M.”, had this to say:

“As an employee of the university I think it is important workers support each other in disputes such as this. Lecturers are being swindled out of their pensions while the university profits, spending money on new buildings, campuses outside of Newcastle, and filling the pockets of high-up executives. Today it’s lecturers, tomorrow it could be another section of the workforce. But it doesn’t have to be this way, by standing united as a class we can turn things around. Together we can stop this pensions reform. At the end of the day that’s what solidarity comes down to.”

“M.” and Hanna mentioned issues like spending on new campuses and high executive pay. By looking at the Newcastle University’s accounts for 2017 I investigated these claims to see if possible solutions could be suggested and investigated, in the unlikely scenario there were a significant USS deficit that needed to be covered. Solutions could include funding larger employer contributions to staff pensions, or taking a less formal measure of providing miscellaneous benefits or pay increases to staff in the eventuality the proposed changes to USS go through.

One way this may be funded is through the sale of assets, many of which are not student-facing. This could be divestment from financial investments — under student pressure, Newcastle University has already divested from fossil fuels. According to the annual review: “As of 31 July 2017, the University had £75.2m of endowments (2015: £63.4m). Endowments [investment vehicles, or a package of managed investments] are primarily invested in equities [stocks and shares]. The University uses Majedie, Baillie Gifford and Black Rock to manage its investments. The University’s ethical investment policy provides a mechanism whereby students or staff can challenge how the University invests its funds and also requires our investment managers to subscribe to the United Nations Principles for Responsible Investment (UNPRI).” In other words, Newcastle University has been pressured into divestment once before, and students and staff can facilitate this again.

Employer contributions to teaching staff pensions could be also funded by the sale of land on campuses across the world owned by Newcastle University in Singapore, London, and Malaysia. However, this may have an adverse impact on staff and students there. Newcastle University’s latest campus purchase was Newcastle University London, opened in September 2015. According to the accounts, Newcastle University as of 2017 has combined net assets in four learning schemes totalling a value of £12.7 million in Newcastle University INTO LLP, Newcastle University INTO LLP London, Newcastle Science Central, and Newcastle Science Central Management LLP. Critics of University pension policy could point to the purchase of new assets, and to the existence of these net assets, and expect instead that money be diverted to supporting staff and students directly.

The University could also seek to redistribute high levels of executive pay to lesser paid teaching staff. This strike action over pensions comes not long after a nationwide upset over high levels of University executive pay. According to the Chronicle, Newcastle University’s previous Vice Chancellor was paid £248,000, excluding other possible non-monetary benefits, in 2015–2016.

From the staff costs in the accounts, it would appear the Vice Chancellor pay and benefits package amounted to £356,100 in 2017 (this amount was the total paid to the two Vice chancellors as one retired and Professor Chris Day took over). The VC pay for 2016 was £316,900, so this constitutes about a 12.4% increase from 2016 to 2017. This comes at a time when total Newcastle University income in 2016–17 was £487.9m, an increase of a lesser 3% from £476.2m in 2015–16. In the accounts, one can find the numbers of other higher paid staff, which includes pro-vice chancellors:

This data lends some context to Bruce Baker’s earlier claim: “since 2009, our pay has not kept pace with inflation. Our real wages are over 15% lower now than they were nine years ago.” Rising executive pay and lower real wages for the majority reflects general trends. According to research by the TUC, “between 2007 and 2015, real wages in the UK fell by 10.4% — a drop equalled only by Greece. At the same time, students continue to face rising living costs in basics like rent and food as previously available support such as maintenance grants is removed. Many workers on Newcastle University campus are also not paid a so-called ‘living wage’ for basic needs, calculated at £8.75 an hour.

However, economic disparity in universities is not isolated to Newcastle. Ex-Bath Spa University vice-chancellor Christina Slade’s ‘compensation for loss of office’ meant she received over £800k in one year total when taking into account her salary. University executives are also often provided with ‘perks of office’ like luxury cars, expenses, and free housing.

What this research suggests is that Newcastle and other universities can provide alternative ways of funding a larger employer contribution to the USS pension scheme, or can afford to make less formal efforts to support staff, without resorting to removing resources from students on campus. Even if the deficit in the USS were real, and even if existing cash flow could not cover current pension payouts, there would be alternative ways to fix the problem without seriously impacting on learning.

Despite this, executives push ahead with the cuts to and marketization of pensions. Student activists on campus have already organised efforts to register their concern with planned cuts to staff pensions. A petition is running to declare student support for striking staff, and has 120 signatures at the time this article is being written. At least one information session is also planned to occur, this one right before Ronnie Reid’s motion goes to NUSU student council.

On the event description for the above event, the student organiser Amelia Ward had this to say about solidarity with striking staff:

“The UCU has tried to negotiate with employers but an agreement cannot be reached, they have no choice at this point but to strike. Industrial action is very much the last resort, the UCU and staff have been pushed to strike action for the collective good, to defend the long term security of their pensions to protect themselves, their family and their colleagues. They are not taking strike action lightly, they will lose pay on strike days and miss out on teaching students and carrying on with their research (which they love.)

Many students feel angry about the disruption to their education and the loss of contact hours over the upcoming strike period. This anger is warranted, however you should not be angry at lecturers. Your anger needs to be directed towards management of the University who are trying to impose the new unfair pension scheme and have forced the UCU into strike action. You should be angry lecturers who work hard are being treated this way and stand with them in solidarity against the pension cut.

Students in solidarity with striking staff will put pressure on the university and hopefully this can reopen negotiations early, reduce the strike action and stop intended changes from taking place.”

UCU and student activists want other students to get involved by leafleting, writing letters to the Vice Chancellor, protesting on campus, talking to your friends in person and on social media, and not ‘crossing the picket line’ and going to lessons during strike days. I got in touch with the student activists and they said they could be contacted at Newcastle.uni.solidarity@gmail.com.

Some of the student activists I spoke to also seemed keen to campaign on different issues in the future, such as the living wage and poverty on campus, and wanted to build a relationship for campaigning with staff. A Masters of History student, Henry Holborn, had this to say:

“Another clear case of injustice done by the management is the failure to accredit to the living wage foundation. This registered charity asks employees to give low-paid workers above minimum wage to £8.75, which is a realistic salary to get-by on. In a written statement to the Newcastle University Labour Society, Chris Day suggested that staff are already payed a decent wage, and that “all staff have access to an excellent benefits package including a defined benefit pension scheme.” The case of the UCU pensions strike seems to contradict this statement. Both the strike action, and the failure to accredit to the living wage demonstrates that staff on all pay scales are under pressure from above.”

Some students however just want to see a return of their teaching hours. One public event on Facebook set up independently from the main body of organising students, displays great concern over the impact the strikes will have on teaching hours, but remains broadly supportive of teaching staff’s efforts:

“We are paying £9000 [sic] to the university and it is their responsibility to resolve this. This is by no means belittling the reasons behind the strike, but we have the right to be angry at losing teaching time…. We need to display our discontent for the lack of cooperation by the university with the union. The loss of contact hours will negatively impact OUR FUTURES. I will not stand for this, neither should you.”

This reporter couldn’t find any staff, student, or worker events or organisation on campus opposing the view that lecturers should strike. All of the organisation hereto visible has been supportive of staff interests and puts greater expectation on the university management to come back to the bargaining table, or at least takes no position on staff interests.

This firmly puts proponents of cutting staff pensions in a tiny minority of elites. This is contrasted with a majority of people sympathetic to staff and/or injured themselves by the decisions to cut pensions pushed through by pension managers and employers. The decision to cut pensions is ultimately resulting in the loss of teaching for students, and the loss of pay for staff, as the hands of striking staff are forced. This decision appears to be a political choice as the supposed deficit figure is unreliable, potentially acting as a smokescreen to justify the shifting of liability for pension pots from Universities to individual staff, now finding themselves surrendered and sold out to the fluctuations of the stock market.

On the one side of this conflict, there appears to be university management and a sympathetic NUSU President, and on the other, a defensive group of striking staff, and students acting in solidarity. It’s hard to predict where this dispute will lead, but one thing seems clear: Student activists and striking staff are mounting a resistance to what they consider to be harsh and unnecessary cuts to teacher’s pensions, and they don’t look ready to back down.

Jamie Cameron is a second year Politics (BA) student at Newcastle University, and a Comment Editor at the Courier. You can find or contact him on Twitter @everegalitarian