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Britain’s highest-paid university chief huddled inside her tower at the university of Bath as the mob below hurled biscuits — bourbon creams, fig rolls and all-butter shortbread, among other varieties.

The confectionery assault was an expression of outrage that the university had covered a £2 biscuit claim as part of the £20,000 annual expense bill for its vice-chancellor, Glynis Breakwell.

“Does she have no shame?” asked a 27-year-old engineering researcher, who had gathered with hundreds of other students and staff on Thursday evening to demand her resignation. “Biscuits in, Glynis out!” he shouted.

Until recently, Dame Glynis was one of the most celebrated figures in British higher education, credited with transforming a fledgling university into a national powerhouse during her 17-year tenure.

But her reputation is crumbling after a wave of revelations about her £468,000 annual pay package, the highest of any British vice-chancellor, and claims of autocratic behaviour.

Dame Glynis Breakwell is credited with transforming a fledgling university into a national powerhouse during her 17-year tenure © SWNS

Many students and staff now regard her as proof that the burden of austerity that followed the 2008 financial crisis has not been fairly shared.

She has also exposed uncomfortable truths about the changing character of universities in Britain and the role of the vice-chancellors who lead them.

For better or worse, the high-minded academic of popular imagination is being displaced, say critics, by chief executives presiding over vast, fee-generating enterprises engaged in cut-throat competition.

“It’s not just the university of Bath, you see it elsewhere in the sector — this constant attempt to draw a direct comparison with business,” said George Lunt, a biochemist who served as Bath’s deputy vice-chancellor before retiring in 2008.

The problem, Mr Lunt argued, was that business, with its focus on shareholder returns, was not the same as academia. The school’s 26-member council, dominated by business executives, had “really lost sight about what universities are fundamentally about”.

Like others, he has struggled to understand how his former boss, a social psychologist, has found herself at the centre of such a storm: “What puzzles me is that someone whose whole academic career was spent looking at how people interact with other people could have got it so wrong and failed to understand how she’s perceived at her own institution.”

George Lunt: ‘It’s not just the university of Bath, you see it elsewhere in the sector — this constant attempt to draw a direct comparison with business’ © Christopher Jones/FT

Dame Glynis, who declined to comment, has tried to contain the controversy. On Tuesday, she announced that she would retire next year.

In an interview with ITV, she also attributed her pay to market forces, saying: “I think that we have a situation where we are in a globally competitive market for talent in higher education and that’s particularly true in terms of the leaders of higher education.”

Yet the terms of her departure, which include a paid sabbatical, continued accommodation in a listed Georgian townhouse and the write-off of a £31,500 car loan, only seem to have fanned the flames.

“It’s indefensible,” said Alice Maley, 20, a politics student, sitting inside a café in a new campus arts centre built under Dame Glynis’s leadership.

The biscuits, combined with high rates for student accommodation, were hard to digest for someone who expects to graduate with “about £50,000” in debt.

“They’re just taking advantage of the increase in student tuition fees to pay themselves more money,” Ms Maley said.

Bath has since announced a review of its pay practices and steps to strengthen its remuneration committee. “We are committed to the highest standards of governance,” Thomas Sheppard, the council chair, said in a statement.

Alice Maley: ‘It’s indefensible. They’re just taking advantage of the increase in student tuition fees to pay themselves more money’ © Christopher Jones/FT

Descended from a small technical college, Bath became a university in 1966. It sits on a hill just outside the historic spa town, paying the local council a peppercorn rent each year.

Like other British universities, it has been forced to navigate dramatic changes in the past 20 years. After decades of funding higher education, governments have cut back while asking students to pay up. In 1998, they introduced the first tuition fees, which have since risen to more than £9,000 per year.

David VandeLinde, an American vice-chancellor imported in 1992 from Johns Hopkins University, responded by trying to expand the university, emphasising research and increasing the student body. Dame Glynis, who succeeded him in 2001, has done so on a grand scale.

The student body has nearly tripled since she took charge. Research has focused on real-world applications, expanding into areas such as autism and fuel efficiency. There are so many new buildings, one staffer noted, that aerial photographs of the school are perpetually out of date.

“Some of the work up there staggers me,” said David Medlock, an entrepreneur and philanthropist who once sat on the university council. “It’s groundbreaking.”

Even critics credit Dame Glynis with stabilising the school’s finances, allowing Bath to avoid the painful job cuts that savaged other universities after the financial crisis. Annual turnover has grown to £260m last year.

The school also rose in the league tables compiled by newspapers. In 2011, The Sunday Times named Bath its “University of the Year”, praising the high levels of student satisfaction and success at securing job placements for its students.

Bath university purchased a £1.6m townhouse on Lansdown Cresent for Dame Glynis Breakwell in 2002 © Adrian Sherratt/Alamy

Mr Medlock described the vice-chancellor as unusually hardworking and devoted to the university.

Her critics, he argued, struggled to accept the new realities of higher education. “The message that has come through for the last 20 years is: ‘I’m sorry, guys, but we aren’t able to pay what is necessary for a world-class education,’” he said. “We’ve had that message consistently, from both governments, that the university must be more commercial.”

Even as Bath’s reputation was growing, there were signs of resentment. Eyebrows were raised in 2002 when the university purchased for £1.6m the townhouse that Dame Glynis lived in at 16 Lansdown Crescent, and then three years later when it emerged that she was paid far more than the vice-chancellors of Oxford and Cambridge.

A year ago, a local Labour councillor and former university employee, Joe Rayment, used a freedom of information request to disclose the biscuit expenses as well as the fact that the university was paying thousands for Dame Glynis’ council tax, utility bills and a cleaner.

The university pointed out that the property was also used for official functions.

Still, Mr Rayment, who favours a return to tuition-free higher education, said that people were shocked to discover that the university was paying a housekeeper to iron Dame Glynis’s bed linen. “The whole sector is broken,” he said.

Those perks may have appeared even more extravagant since the university’s non-management staff, whose pay is negotiated at a national level, settled for a 1.1 per cent raise last year.

Young academics were increasingly unable to buy houses in Bath, said Michael Carley, a Bath lecturer who is also president of the local branch of the union representing university workers, the UCU. “Austerity hits everybody but pay in universities has been going down in real terms for about 10 years.”

At the same time, stagnant wages were prompting students to question their ability to repay their loans. While serving on Bath’s council, Mr Carley asked to see details of Dame Glynis’ contract but was repeatedly rebuffed by the compensation committee, he said.

“She doesn’t behave like an academic and that’s what really irritates people,” Mr Carley said. “You get the sense that her values are not academic. They’re not the values of higher education.”

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