The pay package of Dame Glynis Breakwell of Bath University caused outcry but universities seem too reticent to learn lessons from it, a report found

Grade inflation, fat-cat pay and a “sneering” attitude towards patriotism have meant universities have lost the trust of the nation, according to vice-chancellors and senior governors.

They fear Britain’s higher education sector is viewed as out of touch and is a “sitting duck” for the government as it draws up policies to appeal to newly-won northern seats.

Authors of the report from Policy Exchange, a think tank, set up by Michael Gove and other senior Tories when they were in opposition, interviewed about 50 vice-chancellors and chairmen of university governing bodies. Their findings suggest there is growing frustration within higher education at universities’ inability to modernise and reform themselves.

Universities must show “that they speak for and reflect the whole nation”, the report said, adding