Beleaguered Scottish university orders probe by 'external agent' into £30m financial crisis

An “external agent” will carry out the probe at Dundee University, with the findings to be made public to “provide assurance internally and externally that lessons will be learned to secure our future”.

The announcement from interim principal Shane O’Neill comes the day after University and College Union (UCU) members voted to strike at the university over the failure to rule out compulsory job cuts.

The institution was plunged into turmoil in November after revealing it was facing a deficit of up to £30m, with redundancies “inevitable”. A few weeks later its principal, Professor Iain Gillespie, resigned with immediate effect amid escalating concerns over the scale of the financial woes.

In an exclusive interview with The Steamie, the political podcast produced by The Scotsman, First Minister John Swinney said on Thursday that he was “really concerned” about the situation at Dundee.

However, he denied the Scottish Government’s funding model was contributing to the pressures in the sector, describing it as “robust”, despite please from university chiefs for a review.

Prof O’Neill said a recovery plan, due to be published next month, would address the “size, shape, structure and balance of the university”. He said: “There will be change, but that change is necessary if we are to be fit for the future.”

Addressing the question of how Dundee University ended up in its existing financial position, he said: “Things have not been done optimally in the past, something which is clear when we consider where we are right now.

“We, the senior management of the university, do accept the responsibility we bear for that.

“Decisions have been made to support the university’s ambition to grow and to extend our impact, which have left us more exposed than we should be in the face of unprecedented challenges.”

Prof O’Neill said a budget deficit for 2024/25 of £11.5m had been expected, but the “extreme nature of the downturn exceeded our most pessimistic projections for student intake”.

He said: “As I outlined in November, the critical factors for our deteriorating financial position have been the severe drop in international student recruitment, in the context of the ongoing structural underfunding of higher education, allied to cost increases, inflationary pressures and a range of other detrimental changes, including an increase in our National Insurance contribution.

“We also, unexpectedly, performed poorly on our Scottish recruitment, which has compounded the issue - something we are addressing with urgency this year.

“Under-recruitment of students means that this year we have empty rooms in residences that we anticipated being full, resulting in a substantial further loss of income.”

The acting principal said the university’s executive group had been meeting daily to work on the recovery plan.

While staff reductions were “inevitable”, he said: “We will try to achieve as much of that reduction as possible through voluntary means, and we will bring forward more details of that as part of the full recovery plan.”

Prof O’Neill added: “An independent investigation, led by an external agent, will be undertaken into how we arrived in this position of financial crisis.

“This is something we are moving to initiate now. We will make the findings of that report public, so as to provide assurance internally and externally that lessons will be learned to secure our future.”