Sussex Council will meet on 1 April to reconsider its decision to support pension cuts.
The following motion, drafted by the University Secretary, passed at the Senate meeting on 16 March 2022 by 27 for, 4 abstain, 7 against
"Senate is dissatisfied with the decision made by Council in relation to the UUK consultation on UCU's proposal for the USS Pension Scheme. That Council’s decision was made on the basis of a Report and recommendation submitted by UEG [University Executive Group] to Council on February 14th. Senate requests that Council reconsider its decision in the light of an analysis and correction of the UEG report (Feb 14) prepared by Jackie Grant (UCU Observer on Senate) and Gordon Finlayson (Elected Senator), and in the light of all new relevant information."
Analysis of Council paper supporting cuts to USS pensions
Prepared for Senators for USS Agenda item on 16 March 2022
Gordon Finlayson and Jackie Grant
The paper linked above, along with the Equalities Analysis for UUK cuts linked below, were sent to Senators ahead of the Senate meeting on 16 March 2022. The papers were not included in the official papers, despite repeated requests from Senators.
Executive Summary
The paper ‘UUK USS Consultation Response re UCU proposal’ [1] by the Vice-Chancellor and the Director of Finance, for a USS Council briefing on 18 February recommended serious cuts to USS pensions. The paper includes multiple incorrect and misleading statements that serve to undermine UCU’s proposals and misrepresent UUK’s cuts as ‘balanced’ and ‘proportionate’.
This paper is arranged as follows. Section 1 includes an introduction of the context. Section 2 includes a summary of the most egregious errors as
I. Omitting any of the consultation material
II. Misrepresenting Council’s previous views
III. Incorrectly costing UCU’s proposals and
IV. Incorrectly presenting the Equalities Assessment and giving no serious consideration to Risk Assessments.
Recommendation
We end (Section 3) by recommending that UEG produce a new and corrected paper that includes Equalities and Risk Assessments of UUK’s and UCU’s proposals. We recommend that the paper be made available to all staff in advance and for Council to review its decision in light of the new paper.
An Appendix details incorrect and misleading statements.
1. Introduction
Here we analyse the 15 page Council paper that advised Council, on 18 February, to vote in favour of a set text of 93 words supporting severe cuts to USS pensions. The cuts amount to around 40% for early career staff with USS’s current CPI projections. The value of USS is now half or less of the value of the Teachers’ Pension Scheme.
The paper to Council supporting cuts (from now on referred to as the Paper) contains over 40 incorrect or seriously misleading statements that we have identified and refuted.
These incorrect or misleading statements serve to vastly inflate the costs ot UCU’s proposals and then to dismiss them as unviable. The Paper presents the outcome of the consultation as a foregone conclusion. In several places it cites documents and text (see misleading statement 22 below) that clearly show the issue has already been decided by UUK and that the consultation and negotiations were merely for show.
The recommended text, that Council had less than a day to consider, was followed by an e-vote after a non-quorate Council briefing session. It is clear the recommended text to Council is an uncritical regurgitation of a view from UUK that the cuts are ‘balanced’ and ‘proportionate’.
The Paper, supporting UEG’s recommendation to cut pensions, remained confidential until 2 March, after the cuts had been confirmed by USS, making it impossible to comment or raise concerns at the time.
Below in section 2 we summarise the most egregious errors. Section 3 provides conclusions and recommendations. The appendix is a paragraph by paragraph itemised list of the erroneous, false or misleading statements in the Paper.
2. Summary of the most egregious errors
I. The Paper omits all of UUK’s official consultation material
The Paper claims incorrectly that
The full consultation request from UUK regarding the UCU proposal is included at Appendix 1.
Appendix 1 contains NONE of the UUK consultation materials. It is instead two short excerpts from unattributed emails (presumably from UUK) that explicitly claim, without supporting evidence, that UCU’s proposals are not viable. The email excerpts also claim the UUK cuts are ‘proportionate’ and ‘balanced’, the very same words used by the UEG to form the recommended text to Council.
There is a paper listed in the Agenda ‘UUK commentary on UCU proposal’ that was not part of the official consultation and that remains confidential even to Senators.
II. The Paper completely misrepresents Council’s previous views
The Paper argues that the previous Council responses rule out support for UCU’s proposals and instead are consistent with the UEG recommended text supporting pension cuts, claiming:
The approach is consistent with Council’s mandate for last year.
However, the Paper omits key parts of Council’s previous responses which, to the contrary, demonstrate SUPPORT for UCU’s proposals, and misinterprets others.
For example, the Council paper of May 2021 [2] opens with the following three points that argue for less prudence and for clear and visible justification of unnecessarily harsh cuts.
It is vital that UUK use this opportunity to encourage the trustee to be less prudent
… the acceptability of any recommendation for benefit and/or contribution rates changes will be considered by institutions and members in the light of strongly held perceptions that the USS proposals were unnecessarily harsh in benefit reductions due to the assumptions used.
It must be clear and visible in the public domain that any final recommendation for future service benefits/contributions is the best that can be achieved against appropriate assumptions.
These statements by Council in May are exactly aligned with UCU’s proposals, in particular point 1
That UUK call on USS to issue a moderately prudent, evidence-based valuation of the financial health of the scheme as at 31 March 2022, to be issued for consultation in June (at the latest); [Point 1 of UCU’s proposals]
As discussed in Section III below, the interpretation of a hardline Council position on Employers contributions of 21.4% is incorrect. In the June/July 2021 consultation the Council view was explicit that further adjustments could include higher contributions.
III. The Paper incorrectly costs UCU’s Proposals
The Paper argues that UCU’s proposals are unaffordable. However, the Paper repeatedly incorrectly costs UCU’s proposals by ignoring point 3, which is the cap on contributions from April 2023. In ignoring sections of the proposals the Paper echoes the pattern of serious inaccuracies presented by UUK, some of which were corrected following their identification by Mike Otsuka in a series of blogs at the time.
It also argues that previous positions of council
supported no rise in employer contributions over 21.4%
This is a mis-interpretation of the May 2021 consultation as detailed in the Appendix, point 4. It also ignores the tick-box answer in June 2021 (see page 15 here) that Council endorsed, that is explicit that further adjustments could include higher contributions, and that it was too early to specify a particular approach. See Section 2, point 25.
IV. Equalities and Risk Assessments were not given serious consideration
The Paper to Council supporting these cuts includes no Equalities Assessment (EA) and no Risk Assessment.
On Equalities Assessments: the Paper explicitly states in the opening cover sheet
Equalities Impacts: No protected characteristics impact.
However, this is strongly contradicted by the EA that was carried out by Sussex for UUK’s proposal in December but never shared with Council.
The Sussex December EA concludes
It is not possible to draw out any positive, negative or neutral impact of the proposed changes other than stating that any scheme requiring payment over the working life of a member will have a financial negative impact for younger members who will pay higher contributions for a longer period of time, compared to those older members who had paid lower contributions for longer, and for a better benefit basis.
The EA claims it is not possible to draw conclusions about ‘any positive, negative or neutral impact’, which is categorically not the same as the claim from the Paper to Council stating that there is ‘no protected characteristics impact.’ The inability to conclude whether there is an impact is, very simply, not the same as there being no impact. For one thing, ‘age’ is one of the nine protected characteristics listed in the Equality Act, so the statement that UUK’s cuts will have a ‘negative impact for younger members’ clearly implies that there are discriminatory outcomes. It is also explicit in other Universities’ EIAs that the cuts are discriminatory by gender.
The Sussex EA completes the section on ‘Action Required’ with
The only way in which there can be no negative impact on any of the protected characteristics is if the changes don’t happen at all, however given that this would lead to a backstop position that would be worse for all employees the changes are objectively justified by ensuring that the scheme is more sustainable for all employees.
So the EA concludes that the only way there can be no negative impact is if the changes don’t happen. Yet no EA was carried out for UCU’s proposals, which would have prevented the changes from happening, to see if these provided an appropriate action to mitigate any discriminatory impacts on members with protected characteristics.
On Risk Assessments. The paper to Council contained no risk analysis, yet Council already identifies in the Risk Register Staff Engagement, Industrial Action, and League Table Position as the most likely and most costly institutional risks. All of these risks intersect or are amplified by the vote to support UUK’s cuts to pensions.
Given the severity of the cuts, both the equalities impact and risks arising from UUK’s cuts should have been given serious consideration. They were not. In fact it seems clear that Council were misled with regard to the Equalities Assessment.
3. Conclusion and recommendation
Given the grave errors outlined above, as well as the 40+ false and misleading statements documented below, it is clear that Council has not had the opportunity to fully consider, to understand and respond to UCU’s proposals. Therefore Council should revisit its decision to endorse UEG’s recommendation which withheld crucial evidence, and seriously skewed the evidence, for example on equalities assessments, it produced in favour of UUK’s preferred outcome on UCU’s proposals.
It will also be important to address the uncritical acceptance of UUK’s statements and to hold UUK to account over misrepresentations.
In considering the claim of unaffordability, the Council should take into account the relatively modest gap between the UCU’s proposal and the present one. Properly costed UCU’s proposals would cost an additional £1.8-3.0m up to April 2023. The £27m to July 2026 claimed by the Finance Director greatly inflates the cost by omiting key parts of UCU’s proposals, uses the original UUK cuts as a baseline and unnecessarily extends the timeline to July 2026.
But the question of financial affordability is not the only one to consider. Can the university afford to take industrial relations to a new historic low point? Can it afford to lay waste to all the good work recently done in the light of the Halpin Review to improve governance at Sussex? Can it afford to make the USS pension half the value of the Teachers Pension, with all the implications for the attraction and retention of faculty this has, not to mention the incentives this creates for staff to seek employment in post-92 institutions? Can it afford to provoke new and bitter industrial action that will adversely impact on students and the student experience? Can it afford the predictable consequences for the sector in terms of the destruction of, and withdrawal of goodwill, and the further demoralisation of staff?
It is clear that the USS dispute is not going to end by acquiescence to the cuts. It is equally clear that the cuts can be revoked. Critically examining both the information provided to Council by UEG, and the process that led Council to support UUK’s recommendation will go some way to resetting the dispute locally and restoring trust in governance.
Recommendation: UEG to produce a new and corrected paper that includes Equalities and Risk assessments of UUK’s and UCU’s proposals. We recommend that the paper be made available to all staff in advance and for Council to review its decision in light of the new paper.
[1] The paper is marked confidential and ‘Restricted Principle 2’. This principle covers ‘commercial in confidence’ and ‘sensitive’ information. So this draft will discuss the opinions in the paper, and any figures quoted will be calculated independently from information in the public domain.
[2] The Council response of May 2021 is the most comprehensive. It was followed by a single tick box response in June and a short response in September that was only approved by UEG and not Council.
An Appendix details incorrect and misleading statements.
Photo credit Elaine with Grey Cats