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Consultation update: proposal agreed with UCU and Staff Forum

Vice-Chancellor Robert van der Noort

Dear colleagues,

I was very glad that so many people were able to attend today's briefing session on Teams. I am sorry that it had to take place on such a busy day for those involved in Confirmation and Clearing. This is always a critical part of the University year, and this year more so than ever. I am extremely grateful for the efforts of everyone involved, particularly as for many it meant a return to campus for the first time in months. My thanks also to those who prepared the space and IT set-up in Library so that our call centre could operate safely.

This is a fairly lengthy update, for which I apologise in advance, but following the conclusion of discussions with the University and College Union (UCU) and Staff Forum, I want to provide a full update to all colleagues, and particularly those who could not attend today. Both the UCU and the Staff Forum have approached the consultation openly and constructively, and I would like to thank them for their informed and robust input and challenge.

First of all, a very brief recap of our position. As you know from my previous update, the University is projecting a £104m shortfall in income over three years. Nearly half of this - £46 million - is being met from our reserves and sale of assets. The recent sale of land at Cutbush South, for example, has happened more quickly than expected allowing us to access these funds sooner. The remaining £58 million of the shortfall needs to be met from our day-to-day budget, mainly from salary-related costs. If this were done purely through redundancies, it would amount to just under 500 jobs.

Outline of the proposal agreed with the UCU and Staff Forum

I am extremely pleased to say that following collective consultation we have agreed in principle a proposed series of measures with the UCU and Staff Forum that save around £50 million.

There is a detailed outline of the proposal and our memorandum of understanding with the UCU and Staff Forum on the Staff Portal, and a recording of today's session will follow on Monday, but the main points of the proposal are:

  • a pay freeze for three years - this relates only to the annual cost of living uplift negotiated nationally, normally effective from 1 August each year and there is no impact on incremental increases and no restriction on promotion and progression opportunities
  • tiered pay cuts for one year of 5% for grades 3 to 5, 10% for grades 6 to 8 and 15% for grade 9 and above - grades 1 and 2 will be unaffected
  • a three-year vacancy freeze - the additional layer of scrutiny applied new or replacement posts since March will continue, with an assumption that only 50% of vacancies will be filled
  • a 50% cut in travel costs for next three years, implemented through School and Function budgets
  • a reduction in interview costs flowing from recruitment restrictions
  • a 15% reduction in casual, sessional staff and other related salary costs.

This package, once implemented, would allow us to address the immediate shortfall in income and cashflow issues that result. This means that the next phase work of the work led by Mark Fellowes can take a longer term view about the University's future, the financial challenges we already faced prior to the pandemic, and the ongoing impacts of COVID-19 (for example, on pension valuation). There are currently no fixed proposals for this strategic review work, and no options are off the table, but the focus on the longer-term cultural and structural changes that will allow us to implement our Strategic Plan.

Under the UCU's internal processes, this proposal will go to a ballot of UCU members. This will open in mid-September, with a result likely by mid-October. The UCU will be communicating with its members about the proposal today. The University will take no further action on temporary changes to terms and conditions until the result of this ballot is known.

Timeframe and review

With the exception of pay cuts, most of these measures will start taking effect immediately following their formal agreement. University employers have already indicated in the national pay discussions that they will not be in a position to agree a cost of living increase this year.

Any pay cuts would not take effect until February 2021 at the earliest and we have agreed that the University, UCU and Staff Forum will jointly review of our financial position at the end of October, when final enrolment figures are known, and again at the end of January 2021 to determine if all measures are still required. We will then continue a three-monthly rolling programme of reviews for 3 years and the savings measures would be modified or stopped altogether if our financial position improves sufficiently.

No changes to terms and conditions of employment will be implemented until appropriate notifications and procedures have been followed, and we will provide more information about this soon.

When the temporary changes to terms and conditions come to an end, salaries will return to the position they would have been had these changes not been made, including any future cost of living uplift agreed in national negotiations.

Should we face further financial challenges from COVID-19, for example costs from any further lockdown or a worse than expected student recruitment, then we would call on the £50 million being held in reserve against this possibility, before other significant measures affecting colleagues' employment were considered.

Voluntary redundancy and other measures agreed by the University

In addition to this package of measures, the University has also committed to a number of additional steps including a time-limited voluntary redundancy offer. The details of this have yet to be decided, so I cannot say at this stage if will be the same as the voluntary redundancy package offered prior to COVID-19.

Colleagues will also have the opportunity to apply for a voluntary reduction in their working hours equivalent to the pay reduction, an extended period of unpaid leave, early or flexible retirement and "buying" additional annual leave entitlement. We will also undertake a review of our reward and bonus schemes to identify further possible savings. Further details of these measures will be developed and shared with all colleagues.

The University has also committed to a joint review of workloads and to provide opportunities for colleagues to have early scrutiny of major proposals and to conduct a review of workload issues. This will be critical to the proposals coming out of the Phase 2 work, and as Mark outlined in his recent message, to the successful implementation of future change.

Again, my apologies for such a lengthy message but I'm sure you will agree that it is essential that all members of our community understand these proposals. Given the volume of questions during the session, we unfortunately didn't have time to respond to everything. However, we will be developing a set of FAQs based on your questions, which we will share on the Staff Portal next week.

All those involved in the consultation fully understand that these measures will require significant sacrifice from everyone in our University community, and that is not taken lightly. However, this proposal provides a clear way forward and will put us in a strong position to weather this storm and meet the 100th anniversary of our institution with confidence.

Kind regards,

Robert

Professor Robert Van de Noort
Vice-Chancellor, University of Reading

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