UK universities need to ¡°reassess their priorities¡± and divert funds from surpluses and capital spending projects to invest in their staff instead, according to the University and College Union (UCU).

An analysis of financial data conducted by UCU identified that institutions had accrued a ?3.4 billion?surplus in the 2020-21 financial year ¨C although the universities of Oxford and Cambridge accounted for half of this.

The union claimed the excess money was generated by its members through their teaching and research and so should be spent on bigger pay rises, bringing staff onto permanent contracts and restoring pension benefits.

Instead, the union said universities plan to spend more on building projects, pointing to figures declared to the Office for Students by English universities?that showed overall capital expenditure is set to increase by 36 per cent this year, to ?4.6 billion.

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General secretary Jo Grady said while the union was not opposed to ¡°wise investment in infrastructure¡±, universities had committed to ¡°reckless and wasteful expenditure on vanity projects¡± in recent years that ¡°do not represent prudent investments¡±.

As evidence, she cited Glasgow Caledonian University¡¯²õ New York campus, which in February had only?seen 100 students graduate in eight years, and the University of Chester¡¯²õ Thornton Science Park, where students had to be moved off site because of the safety risk posed by a nearby oil refinery.

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¡°We are saying to all universities: reassess your spending priorities, use the wealth within the sector and invest it in staff. That commitment could prevent any industrial action this year and in subsequent years,¡± Dr Grady said.

In early September, UCU?plans to open a sector-wide vote?on whether to hold further industrial action over pay, working conditions and cuts to pensions.

A pay rise of 3 per cent for all but those on the lowest pay bands was implemented in August by the University and College Employers Association (Ucea) despite being?rejected by the higher education unions, who have argued for a rise closer to the level of inflation.

UCU¡¯²õ calculations, based on Higher Education Statistics Agency data, found universities generated a total income of ?41.1 billion in 2020-21, up from ?39.6 billion in 2019-20, but only spent ?200 million extra on staff. Currently, the pay award uplift will cost ?660 million, and UCU argued its evidence showed this could be ¡°significantly increased¡±. University employers have argued their own difficulties with soaring costs due to inflation mean this is the maximum amount that can be offered.?

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Dr Grady said universities could face ¡°unprecedented action¡± in the autumn unless leaders agreed to meet what she called the ¡°simple and affordable demands¡± of the union.

She agreed that universities were in different positions financially but argued ¡°wasteful vanity projects¡± were not just the preserve of richer institutions.

¡°Yes, different universities are in different financial positions, but they are all engaged in these needless wasteful activities, and we want to see an end to it and a redirection of those funds into the things that actually matter,¡± she said.

¡°Students are rarely calling for big, new, shiny buildings, what they do value is time with staff and investment in mental well-being, the things they know will make a difference to them. That doesn¡¯t tend to be campuses in Dubai.¡±

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Raj Jethwa, chief executive of Ucea, said focusing on aggregate financial performance of the whole sector ¡°masks the considerable variation between HE institutions¡± and said each had a legal duty to balance its books, while the nationally negotiated pay uplift had to be affordable to all.

¡°Many HE institutions are working hard to avoid redundancies, and others are struggling to balance budgets to maintain staffing levels, while delivering this year¡¯²õ pay uplift into staff pockets,¡± he added.?

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Mr Jethwa said capital investment accounted for less than 10 per cent of total spending, so UCU¡¯²õ focus on this area was ¡°disingenuous¡±. He said universities had cut back significantly in this area during the pandemic ¡°in order to devote resources to supporting staff and students¡±.

tom.williams@timeshighereducation.com