London Metropolitan University (LMU) pay out £1m in “performance-related pay”

Published: 27 August 2010
by TOM FOOT

A UNIVERSITY has paid out a bonanza of bonuses to senior staff implicated in a financial scandal that led to hundreds of staff losing their jobs.

London Metropolitan University (LMU) paid £1million in “performance-related pay” to senior staff responsible for wrongly claiming £36million.

LMU finance bosses came under fire last year over their inaccurate reporting to the ­gov­ernment’s funding auth­ority of the student drop-out rate.

The handouts have enraged unions who told the Tribune they felt senior managers have been “rewarded for failure”. 

A University College Union spokesman added: “The bonus payouts highlight the wider issue of the completely arbitrary way pay for senior staff in our universities is decided.

“The lack of transparency has allowed institutions to dole out taxpayers’ money to those at the top with no explanation for far too long.

“The majority of staff have received real term pay cuts this year.”

University staff escaping the cull are fighting a pay rise offer well below the level of inflation.

Max Watson, chairman of LMU’s Unison branch, added: “Our pay offer currently stands at a pitiful 0.4 per cent with further cuts on the horizon, and we’ve got our workload doubled to cope with the job of losses of last year.”

The senior bosses’ payments were revealed in an internal email sent by a senior member of the university’s human resources department which said: “PRP [performance related pay] for around 200 research institute directors, academic leaders, professional managers, senior managers and professors total around £1million per annum.”

Just £100,000 is paid as “merit awards” to support staff and £600,000 to academic staff.

In the August news­letter to staff, LMU vice-chancellor Malcom Gillies said “2010/11 is the year in which we have to improve services, reduce costs, be prepared for the unexpected – and payback £4million.”

He said there would be two major reviews – of “undergraduate education” and “business processes” – in 2011.

Mr Gillies replaced vice chancellor Brian Roper, who quit in April 2009 after the details of the huge Government payback emerged. 

Mr Roper remained on a £240,000 salary until Christmas 2009 when the rest of the board of governors agreed to quit in August.

Two independent reports had pinned the failings on senior management. 

A subsequent inquiry by the law firm Eversheds ruled out disciplinary action against members of its executive board.

The university claimed in a statement this week that it was “misleading” to refer to the payments as bonuses. 

It said: “Performance-related pay has, from the founding of the univer­sity in 2002, formed an embedded part of the contract for academic staff and for senior staff more widely. 

“Two separate but similar schemes operate: one for around 200 senior staff and the other for all other levels of academic staff. PRP is not a ‘bonus’ paid on top of annual salary. It is paid for performance against specific targets, set annually and measured by quantifiable output.”