USS dispute - Notes of national UCU meetings on Tuesday 13th March

We promised summary notes from our national UCU meetings on 14 March. This was meant as a report on  the major events of the early week around USS so that we could answer questions. But we know many people are not using OU email during the strike, so this is not the end of the conversation! Here's an update and we intend to have our next all members' meeting on 26th March.

We also wanted to say a huge thank-you to everyone who is supporting the industrial action--it has been amazingly effective. The union's very strong negotiating position and leverage is because of all of your enormous efforts, and the incredible activity we've seen across the country.

The decision to reject the ACAS proposal
The proposal was made public late on Monday. ACAS negotiations involve trying to find an agreed compromise, and prior to that everything is confidential.  Lesley explained that the timetable was driven by the USS Joint Negotiating Committee. The previously imposed JNC 'agreement' in place was the plan for Defined Contributions (DC) in the absence of any other agreement.

A JNC was scheduled for Wednesday 13th and one of the reasons for the hasty negotiation was to try to have an alternative plan agreed at that meeting. However, the haste meant that members did not receive contextual information about the timetable or the benefits/disadvantages of the plan.

The Higher Education Committee (HEC) was called to look at the proposal on Tuesday morning, but there was already a meeting in the diary of the Branch representatives. That's an informal body, not a voting body, charged with reporting back about local issues and the strike effort. Because of the timing, HEC decided to review the proposals from 10 am and then observe the Branch Reps meeting 11-2. Our president, Lesley, is a member of HEC, so she attended the full day of meetings and took part in the HEC vote. Caitlin attended as the OU Branch Rep.  

Branches have different rules about formal meetings. The OU branch requires 5 days of notice for an Emergency General Meeting so we issued a call on the email list, Twitter and the website for as much feedback as possible within the very tight timeframe. We know that this meant we only heard from a small proportion of members (roughly 10%)--however, we did hear back from many of those who had been on the picket lines every day and a wide range of other members across staff categories. While many are anxious to see an end to the strike, the general OU view that Caitlin represented was roughly 70% against the proposal plus about 15% not sure.

Other branches had much higher proportions to reject --in some cases hundreds of members were unanimous or recorded only one or two abstentions. The important thing to keep in mind here is that some of these branches had gained 20-50% new members because of the dispute, and that this strike action is the strongest in at least 10 years. Unless OU members have been attending other pickets and events, they might not see the really amazing level of support from staff and students for the strike. (Here at the OU we've also had unprecedented levels of support and activity--but this is much harder to see because of our geographical dispersal.) Other quite conservative universities that had inactive branches are completely revitalized now and felt they could not recommend anything that would lose the goodwill and commitment of their newly active membership.

There was only one branch where 50% of those attending a formal meeting had voted for the proposal and 50% against, so that branch was equivocal--all other branches rejected it. There was also a massive demonstration outside of UCU HQ against the proposed agreement.

The proposal details

The reasons given for rejecting were basically as follows (with thanks to Leicester UCU for a clear outline).

First, Branch Reps represented that after all the work done by UCU and its members to expose the fact that the projected deficit was not real (the scheme is in surplus), the new proposal used those parameters. Therefore this meant higher contributions and a significantly worse pension entitlement based on a lower accrual rate. An independent valuation was promised but would not take effect before 3 years, during which time quite a lot could happen to university finances, to the stock market, the will to defend pensions, etc. We might well be fighting the same battles again in 3 years but from a position of less strenghth.

Because of the timing there were no full workings or modellers available, but pensions experts in various institutions worked overnight and produced estimated figures--for example c 33% cuts. This was potentially as severe or even worse for some members than the DC scheme over which members went on strike.

The plan had the advantage of retaining Defined Benefits. However, this protection of Defined Benefits was greatly reduced to a cap of £42,000 from the current £55,000. This meant a much larger proportion of scheme members would lose out.  The plan also included a Consumer Price Index (CPI – a measure of inflation) cap of 2.5%. This meant the ‘defined’ part of the benefit would actually lose value in real terms whenever inflation becomes higher than 2.5%. This happened recently in 2017 when CPI was 3% so it was not a theoretical problem. Employees would pay more, which feels the same as taking a pay cut. That means a loss of income for staff and, overall, much worse pensions than those of teachers and peers in post-1992 institutions.

There was a final point that was a particular problem for traditional universities and our ALs. The plan encouraged lecturers to reschedule missed classes and tutorials, even though they were not paid for that work (which was cancelled owing to strike action). Branches felt this was a terrible precedent for future action and would raise the expectations of students and managers that staff would happily make up work for free.

It's possible that such a proposal would have been acceptable if the strikes had been weak.  As the proposal showed considerable progress from the UUK starting point, it could be presented in that context as a reasonable compromise and the best that could be achieved. However, the union effort was so strong that this was not the context. The negotiators acted within parameters set by UUK on both the discredited valuation and the JNC timetable because UUK presented these as absolute and fixed parameters. The valuation position, for example, is very complicated but is partly based on legal requirements for how private pensions are valued regardless of the special circumstances of USS.

In rejecting this  deal the union in effect said that members were so unhappy with the deal on offer that they were prepared to hold out until political will and creativity were found to get around those parameters.

Balloting the members

Had the Branch Reps meeting been split on the issues, it would have been essential to have a ballot of the members. Only such a ballot can ever end a dispute--any final outcome has to be ratified. However, the Branch Reps felt, first, that UCU could not recommend this to the membership if it balloted (so members would be asked to vote 'no' in that case) and, second, that the outcome could not possibly be in doubt owing to the strength of feeling reported by the Branches. There was therefore a question of the political usefulness of a ballot to say 'no'. HEC, as the union's elected body of HE reps, took the view that holding a ballot was an unnecessary use of union resources, and could deliver the wrong message because UCU normally ballots only on proposals that are likely to be accepted, and suspends the action during such a ballot. It was instead decided that the union would be in a much stronger negotiating position if it maintained the strike from Wednesday and kept up the pressure

What next?
In rejecting this deal despite the USS timetable for consultation on the DC plan, the union entered new territory. It was assumed that the USS statutory consultation (due to start 19th March) would carry on alongside the industrial action on a parallel track. We are now in new territory, and a lasting solution will require the political will to change the valuation methodology which is based on private sector employment and risk of bankruptcy. There is a petition to provide a government guarantee to the pension as a way to get around the valuation problems--this would mitigate the risible 'risk' that many universities could go bankrupt simultaneously. https://petition.parliament.uk/petitions/214210.

HEC has also agreed to schedule a further 14 days of strike actions in early summer if necessary, as an indication of the depth of feeling about this.

Happily we have two immediate signs that this approach is useful.

1. UUK immediately agreed to re-enter talks though as of the 15th a schedule has not yet been released.
2. The USS machinery to impose the DC scheme has now been put on hold even though the negotiators were told this was impossible.

In other words, we are already seeing political will and pressure to find a solution. All of this is because of the extraordinary strike action and the commitment of members.

Further information
Here are some sources of information that this branch has been recommending to members and others, in case useful.

First, Professor Dennis Leech (emeritus) of Warwick University explains the difference between Defined Benefits and Defined Contributions, the problems with the valuation methodology, and why USS does not have a deficit.
https://henrytapper.com/2017/11/25/is-the-uss-really-in-crisis/

For a quick version here's a short video from Cardiff Uni that explains the key problems with the valuation. Link to be added shortly.

Finally, Dr Sean Wallis of UCL covers the political context, including the role of the Pension Regulator and the push by government bodies toward moving pension risk and cost onto the individual.
https://heconvention2.wordpress.com/2018/02/08/made-in-westminster/