Academics at Sheffield Hallam University have walked out for four weeks in a dispute about proposals to employ staff through a subsidiary company without access to the Teachers’ Pension Scheme. London South Bank University staff have also backed strike action over planned changes to contracts involving use of a subco.  

The strikes at Sheffield Hallam, taking place between 27 May and 19 June, were backed by 88% of University and College Union members, on a turnout of 73%. They come after the university proposed employing teaching staff through a subsidiary company, removing access to TPS, as well as cutting jobs, ending automatic career progression and increasing maximum teaching hours.  

UCU general secretary Jo Grady blamed management choices for the institution’s need to save money. “The current financial woes are down to systemic governance failures, including a London campus that's been beset by delays and looks more and more like a white elephant each day it remains empty. It is completely unacceptable that staff and students be forced to pay the price for these failings,” Grady said.  

Sheffield Hallam’s London campus was originally due to open its doors in 2025-26 but is now expected to do so in the 2026-27 academic year. The university denies spending “tens of millions” on the project as claimed by UCU, saying the building will be leased.  

A Sheffield Hallam University spokesperson said: “We are disappointed that UCU are taking industrial action. During any strikes, our priority will be to do everything possible to minimise the impact on our students and wider university community.”  

The spokesperson added: “Like all universities, we are having to make some tough decisions due to the financial challenges being faced across higher education. To date, we have been able to make significant savings without the need for any compulsory redundancies. With the overall financial picture for universities likely to be challenging for some time, it is clear that failing to take action would undermine the university’s long-term financial sustainability. We are focused on securing a stable future for Sheffield Hallam, while continuing to support our students, staff and wider community.”   

The university is proposing using a subco because it wants to save about £6m a year by moving the majority of academic staff from the TPS to the Local Government Pension Scheme, of which most of its professional services staff are already members. It is lobbying government to change the requirement to offer TPS. 

Strikes could also disrupt teaching at London South Bank University, which educates a fifth of all new nurses in London. Nine in 10 (89%) UCU members backed strike action on a turnout of 61%. Almost all (97%) support action short of a strike, such as a marking boycott. 

The union said LSBU is proposing to terminate all academic contracts and rehire people based on a two-track system, where those classed as non-research teaching staff are employed through a subsidiary company without access to TPS. According to UCU, the inferior employment terms would predominantly affect women. 

LSBU’s UCU branch secretary Federica Rossi said: “It is frankly scandalous that the university's leaders are showing such callous disregard for our work [and] the gender equality implication of the cuts.”

Rossi said the proposed cuts could have profound implications for the NHS and the capital's health.

Grady added: “Senior leaders now need to halt the cuts and get round the negotiating table and work with us; if they refuse to do so, we will have no choice other than to shutdown graduations.”  

These developments come after academics walked out at Southampton Solent University over proposals to transfer all of them to a subsidiary company with a defined contribution scheme. UCU has also not ruled out a strike ballot at Chichester University, which has been hiring new joiners through a private company since the start of April. Several other new universities are similarly embroiled in disputes with staff over pensions and subcos.  

The practice of creating companies to avoid expensive public sector pension contributions is becoming more widespread among post-92 universities, which have a statutory obligation to offer TPS to academics. Employer contributions to the more generous TPS are close to 29%, compared with 14.5% in the Universities Superannuation Scheme offered by traditional universities.  

Earlier this year, Grady wrote to education secretary Bridget Phillipson and skills minister Baroness Jacqui Smith, asking them to rule out legislation that would allow sector-wide opt-outs of TPS and to impose sanctions on universities that fire and then rehire staff through subcos. She also urged them to provide a cash injection to help post-92 institutions finance their pension contributions.  

Employers in the higher education sector, meanwhile, have been lobbying for changes so that post-92 universities are freed from the obligation to offer TPS, citing financial challenges.  

TPS employer contributions have nearly doubled in the past seven years, rising from 16.48% to 23.68% in 2019, and then to 28.68% in 2024, as the relevant discount rate – 'superannuation contributions adjusted for past experience' – was reduced to CPI+1.7% in 2023, from CPI+2.4%. The rate is based on a forecast of long-term GDP growth by the Office for Budget Responsibility.

Pensions minister Torsten Bell recently announced that the Scape rate for the ongoing 2024 valuations will be CPI+2%. This will be reflected in employer contribution rates from April 2027.  

Sheffield Hallam said it will factor the new contribution rate into its ongoing negotiations around the proposed pension changes as soon as the rates have been confirmed.  

The Universities and Colleges Employers Association has welcomed the higher Scape rate. Chief executive Raj Jethwa said: “This means that TPS employer contribution rates will reduce, potentially significantly, with effect from April 2027. We encourage confirmation of the new contribution rates from government as soon as possible.” 

However, he added that while the higher discount rate will provide some relief to employers, “there is still anxiety among UCEA members that it will not address the long-term stability and fundamental challenges facing the [higher education] sector in its statutory obligations to offer TPS”.