Universities need to be able to attract the best senior staff, and this means paying them well – otherwise the country will suffer, says Malcolm McVicar

Here we go again! It must be the season for having a go at vice-chancellors' pay. This follows a predictable annual cycle, which usually starts in the late summer with the "isn't it dreadful how standards in the GCSE have fallen", followed by "isn't it dreadful that so many people are passing their A-levels". Unfortunately, the frequency of the discussion adds nothing to its sophistication.

Whether we like it or not, vice-chancellors are chief executives of large and complex organisations. There are well established and robust methodologies for comparing the total remuneration package of executives in the private and public sectors and, in general, those in the public sector are significantly lower.

The pay of vice-chancellors and other university senior executives is generally determined by independent remuneration committees, which take these different factors into account. It is also determined by the need to recruit the best people to do the job.

If you compare the pay of a vice-chancellor of a medium-sized British university with that of his or her American or Australian colleagues, you will generally find that the British VC is paid significantly less. If you look at the size and complexity of the average British university with, say, around 30,000 gross student numbers, 2,000 to 3,000 staff, and a gross income of £200m to £300m, then you are talking about sizeable organisations. These exist in highly competitive environments, both nationally and internationally, and are subject to increasing levels of regulation and audit. Being a VC is an exciting job, but it is certainly not always straightforward.

There is an international market for senior university executives and academics; if the UK is to grow and succeed, we must be allowed to compete. Simply, if we don't pay appropriate salaries, we won't get decent people to run or teach in the universities.

There is a much bigger issue here than vice-chancellors' pay. The issue is whether we are going to operate a successful mixed economy in which we recruit and reward the best people, or whether we are slowly to degenerate to highly differentiated sectors, one private, where material rewards are high and unregulated, and one public, in which the low level of public debate and political point-scoring reduce the levels of reward to such an extent that we can no longer attract and retain highly qualified staff in our public services.

Of course, there have been obscene examples of excessive rewards in the private sector. There is none of that in the university sector. At a time of severe economic difficulty for the UK, university boards will be very careful in determining the pay of their senior staff. However, they also have to be free to set levels of remuneration that enable them to attract and retain the best senior staff. If not, the institution and the country will suffer.

• Malcolm McVicar is vice-chancellor of the University of Central Lancashire, he writes here in a personal capacity