sent 29 August 2023

Dear Provost Professor Jarvis,

We write to express concern and request action regarding the application of the salary sacrifice scheme and the 10% ‘uplift’ applied to the invoice rate for staff accessing the University nurseries. This has the intentional effect that up to half of the benefit of the scheme is taken by the University on the nurseries’ behalf. 

While this issue is being raised following a UCU member’s recent experiences joining the scheme, we understand that this practice has existed for a number of years. Acknowledging that the use of a salary sacrifice scheme for nursery care is a voluntary arrangement, and its existence is something we of course support, the branch wishes to challenge the moral basis for imposing this uplift as a condition of membership of the scheme, and moreover the information provided to scheme members on how these funds are used. Below we give more explanation and request action to address this.

As background, the guidance on the daynurseries.bham.ac.uk website states that applying a 10% uplift for those paying by salary sacrifice serves to ‘increase the level of funds available to support childcare facilities within the University. Those funds will be used to maintain and improve the childcare facilities available, benefiting the children who use them.’

However, there is no information given about what level of additional funding this provides each year, or how this funding is used to improve and maintain facilities. Given that this funding has been raised opportunistically by imposing an over-charge on staff who are opting for salary sacrifice rather than part of the core operating budget, it should be possible to quantify this funding and identify specifically how it has been used to provide facilities over-and-above what is provided through core budget. In the absence of a clearly defined additional benefit to children using the facility, the question arises as to whether the University is helping itself to money that in the spirit of the law is meant to relieve living costs for working parents.

Additionally, we believe that the University does not morally have a right to impose the deduction of this money as a condition of scheme membership. The saving associated with salary sacrifice for employer-provided childcare is allowed by tax law in order to support working parents, and it is the parents, not the University, who should decide how they use their saving – perhaps they might want to make an additional voluntary contribution to the nursery for the benefit of theirs’ and others’ children, but they may very likely wish to use the saving to support family budget and activities. During a cost of living crisis, the latter are under significant pressure for many members.

Finally, we believe there is a risk that the university is contravening the Consumer Rights Act 2015. According to the rates posted under Fees, the general public pays a rate of 8% higher than the university staff and student rate for a full-time week, 6% for the day and session rates. However, the 10% uplift means that university staff and students are actually paying rates higher than the general public. In other words, any advantage for university staff and students is not that which is as advertised on the website.

We therefore request that the University

1 – confirms that their implementation of the salary sacrifice scheme is indeed lawful, on what legal basis, and that legal (or otherwise) advice was taken in adopting this method of implementation.

2 – clarifies how long this uplift scheme has been in action, and quantifies the additional funding taken from parents’ tax savings per year over the scheme’s existence

3 – provides detail on how this additional income is being used to provide facilities above and beyond that covered by core budget

4 – explains whether the nurseries are operating in surplus or deficit, and how this income contributes to increasing the surplus or reducing deficit, and whether there is a set amount of surplus that the nurseries are required by the University to generate

5 – commits to making the uplift voluntary, at a level which working parents feel appropriate to their circumstances

We believe that the details provided in points 2-4 will enable working parents to make an informed decision regarding making voluntary contributions.

Regards,

University of Birmingham branch of UCU