Vince Cable has accused the university sector of lacking ¡°realism and self-sacrifice¡± and urged ¡°restraint¡± in pay for vice-chancellors and other senior staff.

The business secretary, who has overall responsibility for higher education, said he was ¡°taken aback¡± when he found out that vice-chancellors¡¯ pay rose by more than 10 per cent in 2008-09. He said it bore ¡°no relation¡± to the economic problems facing the country.

In a letter jointly signed by David Willetts, the universities and science minister, he also asks the leaders of every college and university to do ¡°more with less¡±.

Mr Cable told the Daily Telegraph: ¡°I was very taken aback to discover that last year the pay of vice-chancellors rose by over 10 per cent in the middle of a financial crisis.

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¡°There is some gap between reality and expectations in some of those institutions and although it is not our job to control pay ¨C it is an independent mechanism ¨C we want to signal to them that there has got to be some restraint.¡±

Referring to a recent visit to a struggling car plant where managers were taking a pay cut, the Liberal Democrat minister added: ¡°I just get absolutely no sense in the university sector that there is the same degree of realism and of self-sacrifice that is going to have to happen if we are going to preserve the quality of university education.

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¡°There is clearly salary escalation at the top level that bears no relation to the underlying economics of the country.¡±

Figures published in Times Higher Education in April show that pay and benefits for the leaders of 152 higher education institutions rose by 10.6 per cent in 2008-09, taking the average vice-chancellor¡¯s salary package to ?219,156.

However, the Universities and Colleges Employers Association said at the time that settlements for 2009-10 were much lower, with 70 per cent of heads receiving either no increase at all or only a 0.5 per cent rise.

Steve Smith, president of Universities UK, said Mr Cable was referring to decisions made almost two years ago and that institutions were now showing restraint.

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¡°Obviously vice-chancellors are paid a large amount, but the vast majority will not see pay increases this year or next year, and that seems appropriate in the current economic climate,¡± he said.

Meanwhile, the annual accounts from the Higher Education Funding Council for England, which have just been published, show that chief executive Sir Alan Langlands earned ?230,000 last year.

simon.baker@tsleducation.com