1.  The Committee of Vice-Chancellors and Principals is the representative body for UK universities, and regularly submits evidence to public bodies on issues that affect universities and higher education.

  2.  CVCP was invited by the Science and Technology Committee to submit a memorandum to its current Inquiry. Specifically, CVCP was asked whether it knew of initiatives in UK universities similar to the practice in American universities of "paying academics at 80 per cent of the full rate for an 80 per cent university workload, thus allowing those concerned to pursue more commercial interests and, hopefully, make up the rest of their income".

  3.  The simple answer to the Committee's question is that contractual arrangements of this sort are not routine or widespread in UK universities. Special arrangements are occasionally negotiated, usually on an individual basis and typically at professorial or other senior level, but precise data on their extent is not available. The fields in which contracts of this sort are most familiar are in medicine and related clinical disciplines, where appointments allow for the combination of teaching, research and clinical duties, but there is no single dominant model.

  4.  The American practice is itself not ubiquitous and can vary—not all universities follow the practice of MIT, for example. A common version is full-time contracts lasting for nine months of the calendar year, with the expectation that research grants, or perhaps teaching in a third semester, will cover the rest—these latter options being perhaps more common than earning 20 per cent from industry. The 80 per cent/20 per cent formula has the appeal of simplicity ("one day a week"), but further information is needed to determine what it might mean in terms of academic workload and in level of remuneration (both of which vary from the USA to the UK).

  5.  A group of Vice-Chancellors and senior technology transfer managers from 11 UK universities visited last November seven universities in the USA with a track record in technology transfer, as part of ongoing work with the Gatsby Charitable Foundation. The aim was to consider what lessons could be learned from the US experience. The attention of Vice-Chancellors, like that of members of the Committee, was drawn to the nature of academic contracts in the USA. A report of the visit will be launched at a national conference on 11 February, a copy of which will be forwarded to the Committee.

  6.  The American practice on contracts may be less significant in itself than in what it is an indication of, namely that in certain commercially successful universities in the USA the emphasis is not so much on allowing staff to work for industry as positively expecting them to do so. This emphasis is expressed partly through contractual arrangements but more generally through the immersion of staff and students within a tradition of strong university-industry links. This includes extensive academic-industry collaboration, industrial affiliate programmes and community business orientation programmes. As a result, the most successful American universities have not only established a leading economic role but are also in the van in grappling with issues arising (equity share in start-up companies, IP rights, conflicts of interest, etc). It should be stressed, however, that this does not apply to all American universities.

  7.  80 per cent/20 per cent contracts may thus be regarded in principle as an interesting approach, certainly worthy of consideration by at least some UK universities. But it is not clear that the practice could or should simply be replicated in the UK. Structural and cultural differences between the US and UK university systems should not be underestimated. It would be unwise to assume that a particular feature found in one system could simply be abstracted and applied in another and very different one. It is also worth noting that in the USA leading researchers rarely see undergraduate students, whereas in the UK senior academics teach at all levels.

  8.  It is unlikely that the practice would commend itself equally across the very diverse university sector in the UK, not least because ours (unlike the US) is overwhelmingly a publicly funded system. In addition, opportunities to recoup income foregone would not be equally available to all institutions and all staff. Encouragement to explore flexible arrangements would be more attractive, and more in keeping with a system of diverse and autonomous institutions, than any hard and fast approach.

  9.  It is worth pointing out that it would be a mistake to believe that contracts on the model cited would lower university costs—not simply because university salaries in the USA are often substantially higher than those in UK universities. Something that all universities would vigorously resist would be any suggestion that arrangements of this sort could lead to a lowering of public funding.

  10.  In the UK staff typically undertake outside work within the terms of their full-time employment. The UK system is not structurally designed to motivate staff to seek outside engagement and remuneration, but this does not mean that work outside the institution is not regularly undertaken. On the contrary, consultancies and other outside engagements are actively encouraged. They are seen, where consistent with university duties and mission, as activities beneficial to staff themselves, to their universities and to the economy. Consultancies are important ways of attracting and retaining staff in fields where university salaries struggle to compete with market rates. In some cases consultancy is a valued source of marginal income for the institution.

  11.  Overall the scale of outside earnings in the UK is not thought to be very great (probably less than the 20 per cent of the American formula), although the earnings may be significant in some individual cases. Some universities restrict consultancy earnings (eg a limit of 10 per cent of university earnings is common in medical schools). Exact figures are unavailable, because owing to Inland Revenue regulations the data can only be gathered on a voluntary basis.

  12.  The Committee will be aware that pay scales and conditions of service in HE are negotiated nationally in the UK. An Independent Review Committee (chaired by Sir Michael Bett) has been established to make recommendations on a new framework. In the course of 1998 the Review Committee invited written submissions, heard oral evidence and commissioned external research. The report of the Review Committee is expected early in 1999, and will form the basis for negotiations between employers (universities are represented by the University and College Employers Association) and unions.

  13.  In sum, contracts on the American model represent an interesting option, but may not be the principal issue in facilitating the commercialisation of research. In our view other factors are more important, not least the availability of finance to support new enterprises in the early stages of exploitation.

  14.  These and other issues will be covered in more detail in the report currently in preparation. CVCP would be happy to arrange for a representative to appear before the Committee to discuss what Vice-Chancellors learned on their visit to the USA.

11 January 1998