Plans to employ professional services staff through a subsidiary firm at the University of Surrey risk creating a ¡°two-tier¡± workforce which could ¡°ruin¡± its ability to attract good people, a union has warned.

All new hires in non-academic roles at the institution will be made via a wholly owned subsidiary firm, Operate Surrey, under the proposals, with the University and College Union (UCU) branch warning that these employees will receive worse terms and conditions.

These include a reduced pension, sick pay and sick leave, while staff could also be ineligible for union membership. Pay rises will also be dependent on performance criteria, which does not apply to existing University of Surrey staff.

Several universities are increasingly?employing staff through subsidiary firms in a bid to avoid paying pension costs. However, these have typically been post-92 universities, which are required by law to offer employees the Teachers¡¯ Pension Scheme, which has an employee contribution rate of 28.68 per cent.

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Staff at Surrey are either on the Universities Superannuation Scheme,?which offers a much lower employer contribution rate of 14.5 per cent, or the University of Surrey Pension Plan, which has employer contributions of 12 per cent.?

UCU claims that the staff employed by Operate Surrey will be offered a different pension, with a minimum employer contribution of 6 per cent.

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¡°We¡¯re in a sector which is troubled, admittedly, but people still feel proud to work for a university, and the university is able to get good staff because of that,¡± said a UCU branch spokesperson.

¡°I think this would completely ruin that, as it would make people feel less appreciated, and make them feel like they were second-class citizens in the university compared to those that were employed through the university directly.¡±

The spokesperson added that the union had calculated that the changes would save about ?500,000 a year, which ¡°was not worth it¡± and a ¡°drop in the ocean¡± at a university that had recently spent ?20 million on a new building.

¡°It¡¯s not clear to us that the savings that they will achieve from doing this warrant the risk of dividing the university¡¯s workforce and creating resentment, and creating potentially high staff turnover.¡±

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A petition against the move has so far received more than 950 signatures, which the union hopes sends ¡°a very clear message¡± to university leaders, and they said a strike ballot could follow if the university does not back down.?

The institution is expected to make an announcement on the proposals in the coming weeks, and a Surrey spokesperson said it had been forced to take ¡°difficult but necessary decisions over the past two years in response to the serious financial challenges facing the higher education sector¡±.?

¡°These steps have helped to improve our financial position, allowing the university to achieve a surplus as we come to the end of 2024/25. But we must continue to plan carefully for the future so we have the resources that are needed to remain resilient and deliver on our long-term growth ambitions.¡±

They added that Operate Surrey ¨C which according to??is run by members of the university¡¯s senior management and governance board ¨C is a wholly owned subsidiary of the university, and has been in operation since 2022.?

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¡°There is no transfer of work to an external third party, and so it is inaccurate to characterise such a change as outsourcing,¡± the university spokesperson said.

The subsidiary firm gives the university ¡°more flexibility in how we shape employment offers, with terms and conditions that are competitive and support our financial sustainability¡±.?

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Last year, 130 staff left Surrey through a voluntary severance scheme, prompting a vote of no confidence in the university¡¯s leadership.

juliette.rowsell@timeshighereducation.com