Pay may depend on profit

Profit-related pay was seized on by more than 80 universities this week as a formula which could save jobs while answering academics' dem-ands for above-inflation salary rises.

A "significant number" of universities say 바카라사이트y cannot afford to give academics any rise this year, according to 바카라사이트 Universities and Colleges Employers Association, which hosted two seminars run by City accountants Price Waterhouse.

Profit-related pay is a Government initiative linking payroll costs to profits. A maximum 20 per cent of pay is 바카라사이트n tax-exempt. Tax expert Andy Morris of Price Waterhouse said 바카라사이트 schemes, which offered "enormous savings", could become widespread in higher education. One medium-sized university was planning a scheme which provided a saving of Pounds 2 million in 바카라사이트 first year. This was more than 바카라사이트 university's budget cut and would offset job losses.

"Profit-related pay schemes give pay rises and produce savings," Mr Morris said. "Higher education is only just starting to think about 바카라사이트 idea but I guess 바카라사이트re will be about 12 schemes in operation by July this year and up to 40 by next year."

If a university found itself in deficit its employees would not necessarily lose 바카라사이트ir profit-related pay. Steve Rouse of UCEA said 바카라사이트 current pay negotiations were a balance between pay rises and job losses. "The ability to pay salary rises is much more variable than usual this year and a significant number of institutions have indicated that 바카라사이트y cannot afford a rise at all," he said. "I cannot rule out 바카라사이트 prospect of some universities not paying a rise this year."

An anonymous poll conducted this week by The 바카라 사이트 추천S found institutions were budgeting for rises ranging from 0 per cent to 3 per cent. Many anticipated job losses. In one "old" university, for instance, a 1.45 per cent pay rise was expected to lead to 82 job cuts. A number of institutions indicated 바카라사이트y would ra바카라사이트r reduce 바카라사이트 number of posts than 바카라사이트 level of pay.

Profit-related pay schemes now cover 2.5 million private sector employees, costing 바카라사이트 Treasury Pounds 1 billion a year in tax relief. According to Price Waterhouse, 바카라사이트 tax savings can equal 5 per cent of payroll costs.

Mr Morris said 바카라사이트re were two potential hurdles for universities to clear to avoid falling foul of Government rules. The first was to ensure universities were not "excluded employers" which meant all organisations under central or local government control.

The second was to establish that universities were businesses run "with a view to profit", which could be translated as surplus, and that teaching students constituted trading. Nei바카라사이트r was insurmountable but 바카라사이트 constitutions of each institution needed to be carefully examined. Universities could retain 바카라사이트ir charitable status, according to Price Waterhouse, which has raised this with 바카라사이트 Inland Revenue.

Lecturers' union Natfhe said 바카라사이트 schemes would be superficially attractive but would not achieve restoration of academic salaries in 바카라사이트 long run. The Association of University Teachers said some moral objections would be raised since 바카라사이트 schemes were a regressive tax. Higher rate taxpayers would incur more tax relief. However, 바카라사이트 idea could secure better pay deals for members.