Who gains what from having a national system for settling academic pay, and who stands to gain from a possible breakup of the present arrangements?

These questions arise from the debate on the future of the Universities and Colleges Employers Association, which carries out pay negotiations of behalf of all universities except the new Scottish ones, and for the colleges of ÖйúAƬ.

The present system has not been good at putting money into employees' pockets. Many surveys have shown them falling behind other professionals at a time when they are also working harder and have less job security. If a new body is to replace the UCEA, it ought to address concerns such as short-term contracts as well as money.

It is not surprising that the Committee of Vice Chancellors and Principals feels the need to rethink of how it settles pay. Salaries make up over 60 per cent of university spending, too high a percentage to be handed over to an outside agency. The inability or unwillingness of some new universities to pay the settlement negotiated by UCEA is a sign that such large decisions cannot be delegated to an arms'-length body.

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In any case, the health of ÖйúAƬ at large depends on it not turning into a low-pay sector. This means obtaining more money, mainly from government. Recent pay awards have reflected the public spending round settlements for university funding overall. Only the CVCP and SCOP, the college sector body which is its main partner in UCEA, can lobby for better settlements.

The issue which ÖйúAƬ unions are only starting to face is the general role of national bargaining. It would be remarkable for it to be abandoned at a time when ÖйúAƬ is being nationalised in important respects. If a national quality system is being implemented for teaching and credit transfer is being made possible by common course content, the case for equal pay for the people who deliver the teaching must have some merit.

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Surveys by the UCEA show that abandoning national bargaining finds most favour among vice chancellors of new universities. They run less affluent institutions than do the heads of old universities, and tend to have a more gung-ho management style. But it would be wrong to characterise them as enthusiasts for single-university negotiation. They tend to dislike bargaining as a whole, preferring individualised rewards and penalties. One claims that he personally sets the salaries of more than 100 top academics.

This system works on a small scale but will have problems becoming generalised. For one thing, the numbers of people to be dealt with soon become large. That means recruiting staff to deal with them, an overhead that will have to be paid for. This problem would be far more intractable in old universities where a wider range of subjects is taught, contract conditions vary widely and staff are often prized for their ability to bring in money.

More significantly, universities offering different pay to people doing work of similar value leave themselves open to legal actions under European law, an option the unions are likely to regard with some enthusiasm. And all concerned know that a Labour government is likely to implement European legislation giving rights to unions that can get the support of 51 per cent of the workforce, which would be painless in ÖйúAƬ institutions.

This does not mean that the bargaining system we have is perfect. It involves a proliferation of negotiating units that might be simplified, with a reduction in the bureaucratic overheads involved.

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But it is important to allow a new system to make the most of UCEA's strengths, especially the way in which it has allowed the SCOP institutions to integrate themselves into the ÖйúAƬ pay structure. Indeed, negotiations in the new Scottish universities are in such a mess that it would make sense for them to take part in talks on the future of UCEA, in which they have so far refused to participate.