Statement on the Marking Boycott

From the 28th onward much of our work will not be marked.

In the face of a 13% real terms pay cut and huge rises in executive salaries, the Universities and Colleges Union (UCU) have called a marking boycott.

In simple terms unionised staff will begin an indefinite stoppage of all marking, including essays, dissertations, projects, lab reports, assessed work and similar.

This decision has not been taken lightly. UCU have been in negotiations for a very, very long time, and all they have been offered is a 1% pay rise. This is below inflation and essentially equates to (another) pay cut. Negotiations, petitions, occupations, demonstrations, strike action – none of these have led the university to reconsider, and so now the union is forced to escalate. If a less disruptive tactic had produced any kind of meaningful response from the university, we would never have reached this point.

When Nigel Thrift called an Assembly Warwick staff overwhelmingly passed a motion (100 to 4) asking the university to resolve the situation fairly. They have been ignored for long enough. Staff are taking action in our interests and in the only way left open to them.

We, Warwick students, need to support the staff when they are forced to take action. It might become be tough for all of us, particularly for finalists. Staff know this, and wouldn’t do it if they didn’t have to. There will be no member of staff involved in the boycott who has not seriously considered the effect it will have on their students.

Looking out for one another means directly fighting pay inequality, even when that fight is tough. It means putting aside our personal concerns about our essays, about our marks, and about our feedback in order to support our staff. For the good of the university we need to stand together.

If we fail to support the people who have supported us then we will all loose in the long run. Staff are not using us as “leverage”, they are defending our education system.

Yes, it makes us angry too – very angry. Angry that the university management are so obsessed with profit that they have completely and utterly failed in their duty to the people who actually do the daily business of educating. Angry that Nigel Thrift is paid 400k while outsourced staff still don’t get the living wage. Angry that the basic values of education – learning, exploring the world, transforming the future – now seem to be second to the business interests of Warwick University Ltd.

PROTECT THE PUBLIC UNIVERSITY – SUPPORT THE BOYCOTT

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STATEMENT FROM INSIDE THE OCCUPATION 3/12/2013

As a show of solidarity with striking workers, members of PPU Warwick today chose to stage an occupation within the Arts Centre.

Whilst not affiliated to the trade unions, this action was decided upon as a means to support the strike by increasing its visibility, and further disrupting the daily running of the university.

We have chosen to occupy this site in order to significantly disrupt the operation of part of the university which is central to its broader reputation, and thereby to raise awareness on campus of real terms wage cuts and exploitation of support staff and junior lecturers. In doing so we seek to initiate debate in the student community concerning these issues.

We have acted out of concern at the proposed 1% pay increase for staff at the University of Warwick. This figure is below the rate of inflation and so represents a reduction in the value of wages paid by the university. This below-inflation pay deal continues a trend in the HE sector that has seen a real terms wage decrease of 13% for university workers in the past four years. This devaluation of staff has taken place in a period in which the percentage of HE sector spending on teaching staff has shrunk from 58% to 55%. By 2012 the University of Warwick had accumulated a surplus of £31m. This suggests that the current pay settlement is neither necessary nor inevitable.

The extent to which this pay dispute affects all of us amounts to far more than a day of missed lectures or a disrupted workplace. In recent years student fees have risen sharply; at the same time, the money the university spends on the staff supporting students has fallen. The increasing price of education and the decreasing availability of jobs are driving students to prioritise what they perceive to be in their immediate interest. In fact the interests of students and staff cannot be separated. In order to protect the quality of the university, its research and the experience of students, we must recognise that an investment in staff is an investment in students.

The iniquity of current trends in the HE sector is not restricted to Warwick alone. Across the country students are finding their voice and fighting the different ways in which universities are being driven to produce inequalities in our society as a result of their increasing marketisation. In Birmingham students have recently occupied in opposition to privatisation and cuts, in Sussex students are in occupation now over the outsourcing of university services. These campaigns, together with our own, represent the forceful resurgence of a national student resistance to marketisation of the HE sector. There is much to fight for, and a great deal to be done, but we will all lose out if the current assault on universities, their students and their staff is left unopposed.

Protect the Public University.

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An open letter to Nigel Thrift in support of staff action, 3/12/13

The Context

On the 3rd of December, 2013, university staff belonging to the University and Colleges Union (UCU), Unison and Unite will go out on strike in protest at a proposed pay settlement put forward by the University and Colleges Employers Association (UCEA), an organisation that represents universities in the UK. The UCEA are proposing a pay increase of just 1% for both academic and non-academic staff. Although on paper the 1% increase is a pay rise, in practice, because it is below inflation, the agreement will cut the value of staff wages.

The extent to which this pay dispute affects all of us amounts to far more than a day of missed lectures or a disrupted workplace. In recent years student fees have risen sharply; at the same time, the money the university spends on the staff supporting students has fallen. The increasing price of education and the decreasing availability of jobs are driving students to prioritise what they perceive to be in their immediate interest. In fact the interests of students and staff cannot be separated. In order to protect the quality of the university, its research and the experience of students, we must recognise that an investment in staff is an investment in students.

We invite people to sign the letter below by clicking ‘leave a comment/reply’. (If you have comments or queries about the open letter please make them here - any comments or queries made below the letter will be moved to this page, where they can be addressed by PPU and visitors to this blog.)

The Letter

Dear Professor Thrift,

We are writing to express our concern at the proposed 1% pay increase for staff at the University of Warwick. This figure is below the rate of inflation and so represents a reduction in the value of wages paid by the university.[1] We understand that this below-inflation pay deal continues a trend in the HE sector that has seen a real terms wage decrease of 13% for university workers in the past four years.[2] This devaluation of staff has taken place in a period in which the percentage of HE sector spending on teaching staff has shrunk from 58% to 55%.[3] Finally, we observe that by 2012 the University of Warwick had accumulated a surplus of £31m.[4] This suggests that the current pay settlement is neither necessary nor inevitable.

As you will be aware, the vast majority of students on taught courses at this university are expected to pay for their study. You will also be aware that the amount incoming students are expected to pay has recently risen dramatically. We are dismayed that at a time in which the university is charging more than ever before for education, it is decreasing the amount that it pays for educators and the staff that support them. An investment in staff is an investment in students.

We support union members in their demand for a fair pay settlement. We hold the University of Warwick and the UCEA responsible for the loss of earnings and contact time that will result from industrial action on the 3rd of December. We are angered that students are put in a position where they must either forego valuable contact time, or cross a picket line of their staff and peers.

We urge the university to recognise the damage its current actions are doing to itself and those that depend upon it, to respect its students and staff, and to find a pay solution that demonstrates its recognition of its primary function in society. Finally, given your position as Vice-Chancellor of this university, and given that you yourself have recently benefited from a pay increase of £42000, we urge you personally to bring your influence to bear on resolving this iniquitous situation in a fair and timely manner.[5]

Yours sincerely,

The undersigned

References

1. http://www.ucu.org.uk/6846
2. Ibid.
3. http://www.ucu.org.uk/index.cfm?articleid=6810
4. http://protectthepublicuniversity.wordpress.com/the-ppu-report/
5. Ibid.

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Comments on the open letter to Nigel Thrift

The purpose of this post is allow people to post comments, queries, challenges and statements of solidarity for our open letter to Nigel Thrift in support of striking HE staff. Comments made directly on the letter page itself will also be moved to this page so as not to interrupt the list of signatories.

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Support your Staff! SOLIDARITY DEMO, TUESDAY 3RD DECEMBER #fairpayinHE

strikes12

In solidarity with lecturers, administrative and support staff taking strike action on Tuesday 3rd December, PPU-Warwick has called a demonstration to assemble outside Senate House at 1:30pm and begin at 2pm on the day of the strike. The strike is being held to protest the continued attack on the working conditions of university workers.

https://www.facebook.com/events/481320918652400/

We must reclaim our campuses from the relentless encroachment of market logic before it is too late.

SEE YOU ON THE PICKET LINE, SEE YOU AT THE DEMO!

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A Guide to the Proposed Student Loan Book Sell-off

Student loans in England

Since the academic year 1990/1, students in England have been able to borrow loans for help with maintenance costs incurred during study from the state-owned Student Loans Company (SLC).[i] In 1997, a report commissioned by the outgoing Conservative government recommended that students contribute to the costs of university education. The newly elected New Labour government chose to endorse the report’s findings, leading to the ‘Teaching and Higher Education Act 1998’ which introduced tuition fees of £1000pa to start in the academic year 1998/9. Students who were unable to pay the fees themselves were to borrow the cost of the fees from the SLC alongside their maintenance loans. The fees were subsequently increased to £3000pa by the ‘Higher Education Act 2004’. In 2009 a report commissioned by the New Labour government recommended making students liable for the entire cost of their university education. In 2010, the incoming coalition government chose to endorse elements of this report’s findings, making students liable for the entire costs of their courses, but capping the maximum fee that a university could charge per year at £9000.

Repayment

  • Loans made prior to 1998/9 are repaid under a fixed term system of monthly instalments which begin when the graduate earns over a specific threshold (currently £27,734).
    • Graduates with fewer than five loans from this period repay over 60 monthly instalments
    • Graduates with five or more loans from this period repay over 84 monthly instalments
  • Loans made between 1/9/98 and 1/9/12 are repaid on an income-contingent repayment system whereby borrowers pay 9% of earnings on gross income above £15795pa.
  • Loans made after 1/9/12 are also paid on an income-contingent repayment system, this time at 9% of earnings on gross income above £21000

Cancellation of debt

  • Loans made prior to 1/9/98 are cancelled under the following conditions:
    • If the borrower was under 40 years old at the time of borrowing, loans are cancelled at 50 years old
    • If the borrower was 40 or older at the time of borrowing, loans are cancelled at 60
    • All loans outstanding for twenty five years after the borrowers last loan agreement are cancelled
  • Loans made between 1/9/98 and 1/9/06 are cancelled when the borrower reaches 65 years old
  • Loans made between 1/9/06 and 1/9/12 are cancelled 25 years after graduation
  • Loans made after 1/9/12 are cancelled 30 years after graduation

In the case of loans issued before 1/9/2010, the strong likelihood of cancelations and defaults make the loan book an expensive investment for the state. This exposure to unrecoverable debt has increased exponentially with the new fee arrangement. Martin McQuillan observes that ‘[t]he student loans scheme that was rushed through in 2010 is widely recognised to be fiscally unsustainable. The resource accounting and budgeting charge (the percentage of loans that will never be paid back) is estimated by the Institute for Public Policy Research to stand at 39.4%, creating a considerable black hole in the deficit reduction programme.’[ii]

Interest rates

(The figures below are from November 2013)

  • Loans made prior to 1/9/1998 have their interest rate set each September based on the Retails Price Index (RPI) for the previous March

The current interest rate is 3.6%

  • Loans made between 1/9/98 and 1/9/12 have an interest rate of the lowest figure from either the Bank of England’s Base Rate (BOEBR) plus 1%, or the RPI measure of inflation.

The current interest rate is 1.5%

  • Loans made after 1/9/12 have an interest rate of RPI plus 3% until the point at which they become eligible for repayment, at which point a progressive rate of interest will be applied depending on income. This progressive rate is capped at RPI plus 3%, which will be applied to gross earnings over £41000

The current interest rate is 6.6%

Pre-2012 interest rates from student loans were designed to ensure there is no real cost of borrowing, making them ‘free’ in real terms. This is not so for loans taken after 1/9/12. Noting that ‘[t]he current interest rates of 6.6% on recent student loans are the highest rates students are charged in western Europe,’ The Guardian’s Angus Hanton has referred to the 2010 loan terms as ‘intergenerational theft’.[iii]

Terms and conditions

Crucially, all student loan agreements carry the following clause:

“You must agree to repay your loan in line with the regulations that apply at the time the repayments are due and as they are amended. The regulations may be replaced by later regulations.”

As such, students ‘are told to sign an open-ended loan agreement where the interest rates and term of repayment can change, at any moment in time, at the whim of government, without the need to [pass] legislation.’[iv]

Proposed sale of loans

‘Project Hero’

In 2013 Andrew McGettigan made a freedom of information request to the Department for Business, Innovation and Skills relating to plans for the student loan book. In June he received a copy of a report named ‘Project Hero’ which had been undertaken on behalf of the government by the Rothschild group in 2011. The report enquires into the possibility of selling the 3.6 million outstanding loans that first fell due in 2002, 2003 and 2004.[v] The delivery was a surprise since the government had deemed that it did not “lie in the balance of public interest” to reveal the fact that the report had been undertaken.[vi] Much of the report was intended to remain secret, and ‘over 90% of it was redacted,’ however, ‘the blacking-out was light enough that virtually the entire report can be read.’[vii]

The Rothschild Group’s recommendations

The report enquires into the possibility of selling the 3.6 million outstanding loans that first fell due in 2002, 2003 and 2004.[viii] It makes no recommendations for the sale of loans made under the current fee arrangement since these are considered ‘much riskier’[ix], will require ‘very significant refinancing’[x] and are unfeasible for sale before 2020.[xi]

The report’s recommendations are predicated on the fact that the current terms and conditions of the 02-04 loans are deeply unattractive to potential investors. In particular, the interest rate cap (which currently sets the loans at the lowest figure of either the BOEBR plus 1% or the RPI – see above) is ‘a major deterrent to potential investors, who worr[y] that if inflation outstripped the base rate they would lose out on returns.’[xii] McGettigan quotes the report as recommending that this ‘[financial] risk is best taken by government…; second best is it being taken by graduates…; and lastly by investors who want inflation protection.’[xiii] As such it suggests two possible ‘sweeteners’ that might be used to make the loans attractive to investors and ‘increase the estimated sale volume from £2 billion to £10 billion’:[xiv]

  1. A ‘synthetic hedge’

The student loans retain their original terms and conditions, but the government underwrites the risk ‘in effect using public finances to guarantee returns to private investment.’[xv] Under this proposal the government ‘would agree to compensate investors for the difference between the cash flow actually received from the student loans, and the estimated cash flow that would have been received without the Base Rate cap.’[xvi]

  1. New terms and conditions

This is an option that Rothschild ‘understand[…] that the government would consider’.[xvii] In its least subtle form, this would involve simply removing the interest cap altogether and bringing the loans in line with commercial rates. However, if this proves politically impossible, the report suggests ‘an offer of compromise, including a payment holiday, or an interest-free period or a different cap’.[xviii] Recognising that this compromise may still be unappealing to the 3.6 million people it would affect, ‘the authors suggest a script for ministers to persuade graduates to accept the worsening of their conditions. “We all live in difficult times,” they suggest ministers argue. “You have a deal which is so much better than your younger siblings (they will incur up to £9,000 tuition fees and up to RPI+3% interest rates)”’.[xix]

Current plans

On 27/6/13, the New Statesman reported that ‘Danny Alexander, the Chief Secretary to the Treasury, has confirmed that the Government will be privatising student loans as part of a plan to raise £15bn from sales of public assets, in order to boost investment.’[xx] This sale is not expected to be finalised until 2015, two years later than originally planned.[xxi] Prior to this announcement, Vince Cable had already categorically asserted that the government will not consider altering terms and conditions of student loans as part of any such sale:

I have ruled out categorically changing the terms of interest rates charged to graduates with existing student loans taken out before 2012. The Rothschild study which was completed in 2011, was a feasibility study which looked principally at how to sell the student loan book. Work on the feasibility of selling the outstanding student debt continues. However the study also contained a proposal which suggested a change in interest rates charged to existing students – that proposal was comprehensively dismissed two years ago and will not be taken forward by this government.[xxii]

This assurance has been echoed in a letter from David Willett’s to the NUS, who assures the union that:

We have made clear that the Government will not change the method of determining interest rates for borrowers who took out pre-2012 ICR loans, irrespective of whether a sale of the loans is taken forward. Therefore, if we decide to proceed with a sale of pre-2012 ICR loans the interest rate charged to borrowers will remain at RPI or base rate +1%, whichever is lower.[xxiii]

Potential outcomes

Although the government has twice stated that it has no intention of altering the terms and conditions of student loans, it should be remembered that members of the coalition had previously promised to oppose proposed changes to the student fee arrangement and then endorsed them once elected. As such the potential outcomes of both of the ‘sweeteners’ put forward in the Project Hero report should be considered.

  1. Potential outcomes of the imposition of new terms and conditions

There is no indication in any reports on the possible loan sale that buyers would inherit the government’s power to alter the terms and conditions attached to student loans. Thus any alteration would have to be made by the government at the time of sale. If the current cap on interest levels for loans that fell due in 2002-2004 were to be lifted today, rates would shift from 1.5% to 3.6% as the loans came into line with the RPI in March 2012.[xxiv] This would significantly lengthen the period in which graduates have to make repayments. For example, The Guardian reports that ‘one indicative calculation suggests that an employee on £25,000 a year, with £25,000 of undergraduate loans taken out before 2012, could work until retirement without ever paying off their debt if the interest rate cap were removed.[xxv] In this case, Angus Hanton observes, the changes to terms and conditions would effectively introduce ‘the concept of a career-long “graduate tax” to the UK.’[xxvi]

  1. Potential outcomes of the imposition of a ‘synthetic hedge’

The imposition of a synthetic hedge would see the government guarantee income for buyers against movements of the BOEBR and RPI. Thus the loan contracts would remain unaltered, but the government would pay the shortfall anytime the interest rates on loans dipped below an agreed level. As such, although the government would no longer own the loan book or benefit in any way from its associated income, the government would continue to pay to service the loans for the lifetime of the loan book. Whichever route the government takes, the selling of the loan book will lead both to an initial loss (debt cannot be sold at its face value) and a loss of future earnings, but in the case of the synthetic hedge, the sale will also incur an ongoing loss in the form of the governments underwriting of all future income of the buyer.[xxvii] Selling under such conditions has been described by The Financial Times’ Martin Wolf as ‘economically illiterate’.[xxviii]

Motives for the sale

The unpalatable consequences of either method of selling the student loan book pose the question of why the government is interested in doing so at all. Announcing the BIS’ plans to the Commons, Alexander said “[…] Mr Speaker, government is the custodian of the taxpayers’ assets. When we no longer need them, we should sell them back at a fair price – not act like a compulsive hoarder.”[xxix] But the above considerations show Alexander’s assertions that the loan book is no longer needed (insofar as this claim means anything at all) and that the loans are to be sold at a fair price to both be untrue. In reality, the sale of the loan books serve two ends. On the one hand, it is consonant with an ideological commitment to the privatisation of public concerns that animates a sizable part of the coalition government.[xxx] On the other hand, ‘It would make political sense to pass up some of what is owed to the government to shift liabilities off the balance sheet before 2015.’[xxxi] That is to say, the spectacle of the removal of several billions of pounds of public debt by the coalition government would be salutary in the run up to the 2015 general election, even if such a sale were to ultimately prove ‘short-termist and contemptuous of citizens’.[xxxii]

Reactions to the possibility of sale

A number of reactions within the media to the proposed sale have been covered above, with a general consensus being that such a plan is foolish, short-termist, contemptuous of graduates and citizens, and a form of intergenerational assault. It is worth also noting the reaction of the union that serves to represent the interests of students in this country. The National Union of Students has actively opposed the threat of a post hoc change in terms and conditions for student loans. Having received a letter from David Willet’s to the effect that these conditions will be protected in the even of a sale, the union put the following statement:

We are pleased to report that our pressure paid off. David Willetts has subsequently written to us to confirm that the Government will not change the method of determining interest rates for those borrowers who took out loans prior to the introduction of the 2012 funding system. There had been concerns that borrowers terms and conditions would be negotiated down prior to a pending sale. This will not happen as a result of the assurances we have secured.

But this is not the end of the story. Whilst the Government have no immediate plans to sell the post-2012 student loan book, we do remain concerned that new borrowers terms and conditions are not yet fixed in law. We have argued that those who have taken out student loans should be guaranteed that interest rates and other repayment conditions will not be changed retrospectively, particularly not in order to render the student loan book more attractive to private financiers. We will keep up the pressure to secure genuine protection for student borrowers’ terms and conditions over the sale of public assets for a quick buck.[xxxiii]

Clearly the removal of the government’s power to alter the terms and conditions of student loans post hoc is absolutely vital to protect students from any future attempts to politically capitalise on student loan books. However what the NUS construes as a victory is an agreement that pushes the government towards the imposition of a synthetic hedge, an outcome with the potential to affect tax payers for decades to come.

The future

The possibility of immediately wiping billions off of the public debt in the short term will always be a strong incentive for governments seeking re-election, and it is easy to predict the same threat presenting itself every five years for the life time of the SLC. It is equally easy to see that such a sale can never be in the interests of the electorate. As such, the loan book must remain in public hands, and the public must remain perpetually prepared to prevent its sale.


[i] Much of what follows in this section is taken from the Wikipedia entry on student loans in the UK.

http://en.wikipedia.org/wiki/Student_loans#United_Kingdom

Further information on the terms and conditions on the pre-1998 loan agreement was drawn from:

http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,3867066&_dad=portal&_schema=PORTAL

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Statement of Support for Staff Strike

On Thursday the 31st of October members of the University and Colleges Union took industrial action against English universities to demand a living wage for academic staff, a reversal of the downward pressure on wages, and a redress to the current pay inequalities between male and female staff members. We are not staff members, but we joined the picket lines because we believe that the cause for which the staff of our university are fighting affects each and every member of our community.

The extent to which this pay dispute affects us amounts to far more than a day of missed lectures. In recent years we have seen our fees rise sharply. At the same time, as UCU have demonstrated, the percentage of university income spent on teaching has fallen. The university is taking more but giving less.

Where is this money going? Although the number of private institutions has been rising exponentially since 2010, the majority of universities in England are public institutions, and therefore do not directly pass a profit onto anyone. Behind this veneer, however, universities are increasingly a lucrative source of income for private individuals and groups. Outrageous pay scales for VCs have made the news in this country, but beyond this vulgar and short-sighted venality, the biggest risk to our institutions come from parasitical outsourcing companies that are taking every means possible to tap the life-blood of our universities. It is no accident that the amount of money that universities spend on management is increasing by twice the amount that it is increasing for academic staff. It is no accident that teachers and researchers, the heart of any real university, are being squeezed at the same time that management costs rise.

Apathy is easy, but it harms us; while we defer on our responsibilities with the claim that we are not political, we allow the interests of others control over our lives and the communities we belong to. The only thing that can check these interests is our assumption of self-responsibility. To this end, we must not allow the same forces that are desiccating our institutions to pit us against our lecturers and staff. It is the same market ideology that depresses their wages, and drives up our fees. If we and the communities we belong to are to enjoy the benefits of a free and vigorous university sector then students and staff must find common cause against the myopic self interest that is harming all of us.

The draining of university resources by ever increasing management costs is forcing down the integrity of our education, our research, and ultimately our society. The logic of private enterprise is at odds with what we believe to be a site for the production and distribution of a public good. As students we have a responsibility to stand in solidarity with those who educate us. As members of broader society we have a responsibility to fight for the integrity of institutions that place the public good above private interests. We must stand with all of those who have the courage to take a stand for what is just and right.

PPU pledge our continued support to the staff of this university and urge our fellow students to do the same.

Join Us. PPU

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