The unions are taking a now-or-never approach to the pay dispute, while the employers favour pleading poverty. Phil Baty and Alan Thomson chart the history of the industrial action and consider possible outcomes.

THE UNIONS

It's "now or never" in the fight for decent pay as far as the Association of University Teachers and lecturers' union Natfhe are concerned.

They are able to wield unprecedented industrial muscle as they move towards an historic merger in June. This, coupled with a rare income boost for the sector with the introduction of top-up tuition fees from 2006-07, has convinced the unions that if they don't secure a significant pay rise now, "they may as well pack up and give up", in the words of Andy Pike, senior Natfhe higher education official.

The unions say their case for a major pay rise is irrefutable and has been well made and widely accepted for many years. They claim that lecturers'

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pay has fallen 40 per cent behind equivalent professions in the past 20 years, and that lecturers have increased productivity by 150 per cent in the past 30 years as student-to-staff ratios have increased dramatically.

The unions even claim the tacit backing of Tony Blair, who acknowledged in 2004 that academic pay had seen "practically no increase in real terms over two decades".

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They insist that their demand for a 23 per cent rise over the next three years is clearly costed and affordable given the ?3.5 billion coming into the sector over the period.

Grass-roots members of both unions appear up for the fight - both the AUT and Natfhe recorded turnouts of about 50 per cent in their ballots for industrial action, with more than 80 per cent in both unions backing the continuous assessment boycott.

But employers are keen to exploit two potential stumbling blocks - doubts about the grass-roots members' stomach for a long fight and growing tactical differences between the two unions.

There is little doubt that despite public solidarity, Natfhe sources are known to have private concerns that the AUT's "militant" tactics leave little room for an exit strategy or "how to march our members back down the hill again", as one Natfhe source puts it.

The AUT declared a formal dispute before talks with employers even began, losing, in the view of some at Natfhe, the moral high ground. And it is known that Natfhe is more willing to meet the employers' demand that the ongoing boycott be suspended, even if just for a nominal 24-hour period, to enable formal negotiations to resume in good faith and get things moving.

Perhaps employers' biggest hope is that the action will drag on long enough to weaken resolve.

By the time the next informal talks take place on April 18, the assessment boycott will have been running for six weeks. By then, the action will really be starting to bite. While this may give the unions a strong hand, it will also cause a big headache for individual lecturers, who will face complaints from irate students unable to progress, or even to graduate.

Some might expect this personal conflict, combined with the emergence in many universities of tangible financial benefits brought by the conclusion of the 2004 pay framework reforms, to break the resolve of even the most vociferous union activists. Adding to the pressure will be the looming threat by vice-chancellors to dock the pay of all staff boycotting assessments for the partial performance of their contractual duties. By this stage, a number of "hawks" among the vice-chancellors may have already begun withholding pay.

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But as one union activist told The Times Higher : "If they dock pay, they will never get their marks. It takes only one or two activists in each department to scupper the exam results of thousands of students. And we are ready to stand firm to the bitter end."

THE EMPLOYERS

Academics are nowhere near as low paid as the unions claim, the employers insist.

And while vice-chancellors have been quick to claim that they would love to reward their loyal staff with more competitive salaries, there is simply no money available to come even close to meeting the 23 per cent three-year deal that the unions are demanding. Much of the anticipated extra income from the introduction of top-up fees has already gone into pay, they insist, following historic pay reforms and increased levels of staffing.

There is undoubtedly a little more money available than the "opening" offer, of 6 per cent over the next two years, made by employers suggests. But the Universities and Colleges Employers' Association has gone to great lengths to lower expectations.

Last month, the public sector pay review bodies recommended the lowest pay rise for a decade (2.25 per cent) for civil servants and other public-sector workers. And Ucea left the unions incandescent with rage when it released a barrage of hotly contested figures to suggest academics were doing well financially.

Since 2001, they say, average earnings have increased 20.3 per cent, while the unit of funding per student has increased by just 16 per cent.

As for the low salaries bandied about by the unions - such as the oft-quoted ?24,352 for lecturers - Ucea explains that these are the minimum levels and that few staff are paid these rates at the start of their careers.

Indeed, Ucea insists, academics earned an average of ?40,657 in 2005 (sourced to the Office of National Statistics, as opposed to the unions'

preferred source of the Higher Education Statistics Agency), compared with an average national earnings rate of ?28,210.

Employers say that the 2004 pay reforms will already bring salary increases of about 3 to 5 per cent this year on top of any annual offer, as the August 2006 deadline for implementation of the framework arrives. Under these reforms, Ucea gleefully points out, the AUT claims to have achieved increases of almost 30 per cent for some job grades at some institutions.

With such a provocative line, Ucea seems remarkably relaxed about the ongoing action - it refuses to talk to the unions formally unless they agree to suspend their assessment boycott, and it seems happy to allow the dispute to drag on, presumably in the hope of weathering the storm and breaking the resolve of union members.

Ucea has pointed out that despite the high proportion of votes in favour of industrial action and the historically high turnout of members for both unions, only 8 per cent of university staff voted for the action.

But the unions sense that the uncompromising stance taken by Ucea is beginning to crumble, as a number of "dove" vice-chancellors break ranks and make more conciliatory noises.

While the "hawks" who are determined not to bow to the unions, especially in the year of their merger, appear to still dominate Ucea, in recent weeks several vice-chancellors have appeared anxious that Ucea may not be doing enough to get back to the negotiating table. These include the heads of Manchester, Portsmouth and Kingston universities.

Leeds University staff have been told that they won't have pay withheld for boycotting assessments, and Alan Gilbert, Manchester's vice-chancellor, last week voiced concern that Ucea had not done enough to resume talks.

It remains to be seen whether the doves will start outnumbering the hawks as the dispute bites.

THE STUDENTS

Students seem to be playing the role of piggy in the middle in the pay dispute but in reality they hold all the power.

There are some 2.3 million students in the sector and they represent a sleeping giant with the power to make or break the academics'

industrial action for more pay. Academics and employers recognise this and both are using student muscle to further their cause.

On the one hand, the unions are goading students with threats of massive disruption to their coursework and exams in the belief that they will seek to sue their universities and thereby force employers to settle the dispute at any cost. Indeed, the reason the unions began industrial action before official negotiations had begun was to inflict maximum damage during the spring exams.

On the other hand, employers exploit students as a moral shield. They voice vicarious outrage at the unfairness of assessment boycotts on behalf of students, most of whom are paying, one way or another, for their education.

Already employers are using students as justification for punitive sanctions against boycotting academics.

Students are like children caught between warring parents. They are in a difficult position and this is reflected in the less than comfortable stance of the National Union of Students.

The NUS naturally sides with its sister lecturing unions and yet it also has a clear duty towards the welfare of its student members, who may be badly affected by industrial action.

Kat Fletcher, president of the NUS, said: "We are interested in the future of higher education in the long term and students and lecturers are crucial to that future. We cannot work together unless we are united and it is in the interests of students to have well-motivated teachers," she says.

"But if this dispute continues, it will go to litigation. We have already been approached by students who wish to use litigation.

"Our particular concern is about the non-setting of exams, and we have raised this with the Association of University Teachers. The AUT's response has been that they have to use every weapon in their armoury. It does not appear to me that they will budge on this."

Most local student unions agree that academics deserve better pay, but there is a sizeable minority that feels NUS leaders should be doing more to support students affected by the dispute.

Simon Green, vice-president education at De Montfort University student union, helped co-ordinate an emergency motion questioning the leadership's stance. It was submitted to, but not debated at, the recent NUS national conference in Blackpool.

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Mr Green said: "The NUS has sent out posters saying students affected by the boycott should complain to their institutions. It's all left up to individuals and a lot of students don't want to be seen to be rocking the boat.

"So at De Montfort student union we have been urging students with problems to come to us and then we approach their head of department to see if there is anything they can do. This is the sort of proactive leadership that should have come from the NUS."

Matters will come to a head for students in May and June when exams and marking begin in earnest.

It is then that all parties - employers, unions and student leaders - could feel the wrath of students furious at the disruption to courses for which they have paid good money.

CAPITAL MICROCOSM

The national pay dispute is being played out in microcosm at Westminster University.

Geoffrey Copland, vice-chancellor of Westminster, is representing all vice-chancellors in the pay talks as chairman of the Universities and Colleges Employers' Association. So, what goes on in his institution could be a key barometer for the national picture.

Jill Jones is one of the leading branch activists for lecturers' union Natfhe. She is driving the local industrial action over pay at Westminster.

Ms Jones, a Business School lecturer, is also a key national figure in Natfhe. She sits opposite Copland at the national negotiating table as chair of Natfhe's national higher education committee.

For Jones, standing firm at Westminster sends a crucial message to the entire sector. "We have an active branch here, and have added a lot of members since the dispute began," she says. "We are very, very solid."

She says that the action has had little impact at Westminster. But she adds that after Easter, when the exam period is in full swing, the branch, which represents about three quarters of academic staff, could create a big impact if pay demands are not met.

Westminster student union has been one of the key branches to break rank with the National Union of Students in condemning the marking boycott as an unfair attack on students.

Rob Watson , student union communications chief, says: "We are caught in the middle between some big beasts here. We can't support action that deliberately harms students."

SCENARIOS

Worst case

This is the nightmare start to the brave new world of top-up fees and the higher education market: the examination and graduation process in chaos, applications for places next year in freefall plus untold damage done to the UK's standing in the international student market.

At a more personal level, employer-academic-student relations are in tatters as students sue universities while boycotting staff struggle to survive on wages docked by employers.

Add to this the potential knock-on effect for the health service and schools starved of trainee nurses and teachers unable to qualify, and the worst-case scenario might even have the makings of something approaching a national emergency.

This may seem fanciful and it is hoped by all that sense will prevail. But the dispute is already more than a month old and employers and academics have still to meet at the negotiating table.

There are no winners in this doomsday scenario.

Best case

Once upon a time a group of hard-working yet underpaid academics asked their bosses for the fantastical sum of 23 per cent over three years.

The kindly employers, fully aware how much they owed to their toiling staff and mindful of their own equally fantastic 24 per cent pay rise over three years, agreed immediately.

Overjoyed, the academics apologised to their students for hiding their marks and they all lived happily ever after. The end.

Unfortunately, the time for fairy-tale endings has passed. Even if employers and unions can get to first base and hold a negotiating meeting, it is unlikely that employers will suddenly find themselves in a position to significantly improve on the 6 per cent offer over two years.

The unknown

This covers a multitude of possibilities that range from the not-a-bad-result-all-things-considered scenario to the OK-we-avoided-meltdown-but-what-a- bloody-mess scenario.

How close to these two poles higher education finds itself depends largely on how quickly the dispute is settled. If it is settled before the main exam period in May, academics ought to be able to ensure exams go ahead and are marked in plenty of time for students to graduate as normal in late June and early July.

New universities, where Natfhe members predominate, may be better off than old since Natfhe has instructed members to set exams. AUT members have been told not to set exams and this could delay marking and graduation for students in old universities, leaving them more vulnerable to litigation.

It is possible that some universities will settle locally, deciding that it is cheaper in the long run to meet the claim than risk the far greater damage to finances and reputation that a long dispute could bring.

DISPUTE TIMELINE

OCTOBER 2005

October 2005 : Natfhe and Association of University Teachers demand at least a third of top-up fee income for pay, which they say vice-chancellors agreed. They set a December 2 deadline, 8 months before pay review

October 25 : Universities and Colleges Employers' Association rejects demands

DECEMBER 2005

December 2 : AUT and Natfhe confirm plans to merge in June

December 6 : AUT declares formal dispute with employers. Ucea says no talks can be arranged till January and criticises AUT for declaring dispute before start of talks.

JANUARY 2006

January 9 : Unions ask for pay rises of 20-23 per cent for all academic staff over three years. Ucea says this is more than half of the extra top-up fee income and higher than their original claim

January 10 : Employers fail to make an offer and pay talks collapse, but they say they will consult vice-chancellors. Natfhe declares formal dispute. Both unions ballot members.

FEBRUARY 2006

February 17 : Unions announce large votes in favour of strikes and action short of a strike, with turnouts of about 50 per cent. Ucea says this represents only 14 per cent of academic and related staff.

MARCH 2006

March 1 : Ucea asks for delay of strike action pending formal pay talks on March 28 and April 25

March 7 : Joint Natfhe-AUT one-day strike

March 8 : Joint Natfhe-AUT indefinite examination and assessment boycott begins

March 24 : AUT and Natfhe express outrage as employers stress that they will not be welcome at March 28 talks unless they suspend action

March 28 : Ucea offers 6 per cent over two years around a negotiating table that excludes Natfhe and AUT, which reject the offer. Non-academic unions also reject the offerApril: Examinations set by academics.

APRIL 2006

April 3 : Informal talks about resuming talks fail

April 18 : Further informal talks about resuming formal talks scheduled

April 25 : Joint Negotiating Committee for Higher Education Staff pay meeting.

MAY 2006

Early May : Summer term begins and modular assessments and exams start across the sector

May 10 : AUT conference

May : Natfhe conference

JUNE/JULY 2006

June : Exam committees and boards meet.

June 1 : Natfhe and AUT amalgamate.

Late June : Universities due to issue exam pass lists.

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July : Degree ceremonies/graduations.