First survey of senior staff pay also shows nearly half of vice-chancellors paid over £300,000

Six universities in England paid their vice-chancellors £500,000 or more in salary, bonuses and benefits last year, while nearly half of all VCs received more than £300,000, according to the higher education regulator’s first survey of senior staff pay.

The Open University, London Business School and the University of East London topped the table for leaders’ remuneration, with the OU paying out £718,000 in 2017-18, including compensation for loss of office, to its departed vice-chancellor Peter Horrocks.

The figures from the Office for Students (OfS) watchdog suggest that calls for pay restraint have had little effect. Average pay for top staff – not including benefits, such as accommodation and pension pots, given to many vice-chancellors – rose by 3.5% in a year, from £245,000 to £253,000.

Below the most senior level, more than 60% of universities increased the number of staff paid £100,000 and above in 2017-18. Overall, there was a 15% rise in staff in the £100,000-plus pay band.

Angela Rayner, the shadow education secretary, said it was wrong that vice-chancellors’ pay was growing while frontline staff faced real-terms pay cuts and students had mounting debts.

“This is just another result of the Tories’ failed free-market experiment in higher education. There is no sign that the government will take serious action to tackle the endemic inequality in our universities,” Rayner said.

Quick guide Financial and disciplinary challenges at British Universities Show Hide University challenges De Montfort University Dominic Shellard, vice-chancellor since 2010, is stepping down for undisclosed reasons. His departure coincides with an investigation by the Office for Students (OfS) watchdog over “regulatory matters”. Reading University Reading has reported itself to the OfS and Charity Commission over the lucrative sale of land worth £121m belonging to a trust controlled by the university. Sir David Bell, Reading’s VC when the land sales took place, stepped down at the end of last summer and moved to Sunderland University. Reading has yet to name a replacement. Warwick University The university badly mishandled a disciplinary case against male students who used an online group chat to discuss raping women on campus. Two of the men were given 10-year bans from Warwick; two others received one-year bans. But after an appeal the university cut the 10-year bans to just a year each. Eventually the two men opted not to return to Warwick. Swansea University

In November Swansea announced the suspension of its vice-chancellor, Prof Richard Davies, and three other senior staff members but refused to say why, leaving even their colleagues unable to explain what was going on. Davies denies any wrongdoing. A number of issues have slowly emerged, thanks to dogged reporting by Wales Online, including the university’s involvement in a £600m joint venture for a private university in Kuwait and a £200m project for a “wellness village” in Carmarthenshire. Davies’s suspension came despite his impending retirement after 17 years in the post. Liverpool John Moores University At the start of the academic year LJMU abruptly announced that its vice-chancellor, Prof Nigel Weatherill, was to step down “with immediate effect” after seven years in the post. The university said the decision followed “discussions between the board of governors and the vice-chancellor”. Richard Adams, Education editor Photograph: Christopher Furlong/Getty Images Europe

Dominic Shellard, the vice-chancellor of De Montfort University in Leicester, received the highest pay rise in England last year, the report revealed. De Montfort had announced on Monday that Shellard was leaving his role, in unexplained circumstances, having last year awarded him a 22% increase, taking his total pay to £358,000.

The University and College Union said the continued rise in pay showed the new universities regulator, launched in England last year, was a “paper tiger” that had failed to halt the increase in wealth being transferred to senior management.

“The OfS fails to ask why some vice-chancellors are still picking up double-digit pay rises and doesn’t even look at their expenses or other benefits in kind. This report sends a message that those who accept such largesse have nothing to fear from the new regulator,” said Matt Waddup, UCU’s head of policy.

Waddup noted that Nicola Dandridge, the OfS’s chief executive, told MPs last year that universities would have to justify executive pay above £150,000. But, he noted, only four out of 133 institutions paid their vice-chancellors less than £150,000.

“With this lightweight report the OfS has shown itself to be a paper tiger incapable of stopping the pay and perks scandals that have plagued universities,” Waddup said.

Dandridge defended the regulator’s approach. “It is not for the Office for Students to set a vice-chancellor’s pay. We understand that running a university is a significant and complex task, and it is right that those who excel in their roles should be well rewarded,” she said.

“Despite this, where pay is out of kilter, or salary increases at the top outstrip pay awards to other staff, vice-chancellors should be prepared to answer tough questions from their staff, student bodies and the public.”

Damian Hinds, the education secretary, said 45% of income for universities in England came from public funding, “so they are rightly subject to public scrutiny”.

He said the regulator may need to take action. “We have given the OfS powers to take action if universities do not do this and we expect them to be used where necessary.”

It is a sensitive time for the institutions involved, as they face a potential financial hit. A review of tertiary education funding is expected to suggest cutting annual undergraduate tuition fees in England from £9,250 to less than £7,000 a student.

If carried out, without substantial replacement funding from the Treasury, the sector would lose a substantial portion of the income that many rely upon after years of rapid expansion.

The Guardian reported last week that Reading University’s debts has risen to nearly 100% of its annual income, following two years of operating deficits totalling more than £40m, including £27m lost on a joint venture in Malaysia.