The tuition fee income that universities receive from students has grown by a third over the past five years as institutions have expanded rapidly, although spending on lecturers and other staff has not kept pace.
Universities received £21.5bn in student fees in 2019-20, more than a third more than the £15.5bn they got in 2014-15.
Spending on staff salaries has grown more slowly, with a 10% rise over the past two years compared with a 13% increase in student fees.
Jo Grady, the general secretary of the University and College Union, said: “The university sector is performing strongly, and this is down to the efforts of staff who work tirelessly to provide students with the best possible education.
“But staff will rightly be sickened to see that the significant financial growth universities have enjoyed has not been shared with them, with spending on staff being held down whilst some vice-chancellors are adding tens of thousands [of pounds] to their already eye-watering pay packets.”
Grady said that university staff wanted to see the sector’s strong performance reflected in a better pay offer, the current below-inflation increase of 1.5% being considered “offensive”. Staff also wanted an end to the wave of redundancies that has swept across universities since the start of the pandemic.
Raj Jethwa, the chief executive of the Universities and Colleges Employers Association, said the 1.5% offer included a higher percentage pay rise, of up to 3.6%, for those on lower pay grades. “Around half the staff covered by these collective negotiations are also eligible for additional progression pay increases,” he said.
The official figures from the Higher Education Statistics Agency (Hesa) showed considerable variation among universities on how much they spent on staff salaries, an element students consistently say in surveys they consider a priority.
Oxford and Cambridge, which have a unique teaching method in which students regularly receive one-on-one tutorials and an extensive college-based pastoral system, and University College London (UCL), one of the largest institutions, spent nearly twice as much on staff salaries as the next biggest spenders. For example, Oxford spent £889m compared with £451m at Imperial College London.
For the first time light was also shed on the earnings of university leaders in the official data. Alice Gast, Imperial’s president, was at the top of the table, being paid £527,000 in 2019-20, followed by Nemat Shafik, the director of the London School of Economics, with £507,000. Exeter had the highest pay ratio, with its leader earning 17 times more than the average staff member.
The biggest spenders on buildings were the two largest campus universities, UCL and Manchester. UCL spent £252m during the first phase of a five-year overhaul of its teaching facilities aimed at transforming the university into a “world leading campus” that includes a new branch focused on interdisciplinary learning, based in east London.
Universities also posted record operating surpluses worth £3.5bn last year. However, Hesa’s accounts warn that due to changes in the way pensions are accounted for this might not represent a fair comparison with previous years.
The impact of the Covid-19 pandemic is not yet fully visible in Hesa’s accounts, since universities follow varying financial years, meaning that some accounts end in February 2020, which was before lockdown.
The report stated: “Although the more extreme fears proved misplaced in 2019-20, providers continue to face challenges and will be impacted by the financial consequences of the pandemic for a few years to come.”
• This article was updated on 1 July 2021 to include a comment from the UCEA.