Alison Wolf

It is only a matter of time before government policy and staffing shortages spell the end of national pay scales

On current trends, the question is when, not if, universities abandon centralised, national pay bargaining. A commitment to "diversity" runs right through current government policy on higher education: support for more concentrated research funding; the idea of teaching or undergraduate-only institutions; and, above all, the freedom to set our own fee levels, albeit with a fairly tight cap. I think this commitment is serious - and completely incompatible with uniform pay scales.

Up to now, universities have competed mostly on quality (real or perceived) and on specialised degree content (though students' living costs also have some effect, notably on London universities' recruitment patterns). The idea behind differential fees is that they should compete on cost as well.

Universities have been outsourcing like crazy in recent years. Even so, almost two-thirds of the sector's spending is on salaries for directly employed staff. So what follows?

Suppose you are a successful research university. You are heavily oversubscribed and trying to hire in top names and new talent, in competition with North America or, increasingly, the Far East. To do that, you have to pay more, and not just to the professors (many of whom have consultancy income anyway). How can you, if junior lecturers or senior research officers are on the same scales wherever they are employed?

The problem is actually worse for universities aiming at local, mature and other debt-shy students. They will have less research income from which to cross-subsidise different activities but will be expected to compete by charging lower fees. I think we have all exhausted "efficiency gains" deserving of the name, so lower fees and the same salary scales as your richer competitors can only translate into pretty obvious losses in quality: even larger classes, even less contact time and even less access to support staff.

The Higher Education Funding Council for England's response is to flail around inventing bureaucratic, centrally administered wheezes, such as last week's "golden hellos" for lecturers in shortage subjects. These don't begin to address anyone's staffing and funding problems. No wonder that in the short term, with a £3,000 fee cap, many vice-chancellors think almost everyone will charge the maximum. Longer term, many will go for competing via salary costs. After all, if your house prices are far below the South's, why not play to this?

The chancellor floated regional pay variation for public-sector workers in this year's budget, and has since been back-pedalling in the face of union outrage. Universities, however, are nominally independent institutions, and explicitly encouraged to diversify their products and charges, and to reward staff for individual performance. Big winners from local bargaining might include some Scottish universities, saved from the consequences of an executive whose education spending priorities are different from Whitehall's. Biggest losers, if national pay scales disintegrate, will probably be lower-status London universities and their students; but who thinks the rest of the sector is going to immolate itself on their behalf?

The academic unions can see this coming. Unions, perfectly properly, tend to behave in a consistent way. They promote the interests of their largest subgroup or their median member. So even though the Association of University Teachers is dominant in the "old" university sector, don't expect it to be championing the victors in some winner-takes-all future.

Most of its members, inevitably, will be hard-pressed lecturing staff who agree that teaching "must be rewarded properly, ensuring parity of esteem with research".

The AUT website consultation on the white paper on higher education includes some highly revealing glosses. For example, on undergraduate-only institutions, the lead-in is: "Do you agree that this is an effective way to enhance the status of university teaching or do you feel it undermines the essence of what constitutes a university?" No prizes for guessing what the union view will be here. But the AUT is also caught in a dilemma. It campaigns for an independent (national) pay review for academic staff.

National pay bargaining is in its own interests, giving it power and visibility. But recognition is institution-specific, and it doesn't want to lose the big names to some rival. If the white paper proposals are enacted, I would give uniform pay scales five years maximum. The AUT will still be the recognised union for most "top" universities at the end of it - but expect a lot of blood on the conference floors first.

Alison Wolf is professor of education at the Institute of Education, London.