Education secretary tells cash-strapped Dundee University to 'think again' about 700 job losses

A month ago the institution announced it was having to cut 635 full-time equivalent jobs to plug a £35 million financial deficit.

Only a fortnight ago, the university admitted this equated to 700 job losses, something new university Rector Maggie Chapman MSP said was “worse than expected”.

Job cuts ‘not palatable’

During a visit to the university’s life sciences school, Ms Gilruth said government officials were in talks with university bosses to bring down the number of redundancies, but said the 700 figure was “not palatable”.

Ms Gilruth said: “I think the government’s been really open, certainly the First Minister and I have, that the quantum of job losses being proposed is not palatable to ministers.

“We are asking the university to think again, and it’s been helpful that the senior management team has been open to that ask.

“The interim principal has said he will look at a range of different options, so they are working at pace with the Scottish Funding Council on different proposals to bring the total quantum of job losses down, and we are looking at what more support we might be able to provide to allow them to do that.”

She added both she and higher education minister Graeme Dey have been assured the job losses at Dundee will not rise past 700.

Ms Gilruth said no job losses are acceptable to government ministers - however, she added: “We have to be pragmatic here about the challenges that are facing the institution, and they are significant.

“They relate to governance and financial decisions taken by the previous senior management team.

“We are looking at what we can do, but there is an acceptance from trade unions and others that there will be a level of job losses - this is a really challenging time for the institution.”

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Government cash for Dundee

So far the government has handed £22 million in emergency cash to the university - this came as university bosses admitted the institution would have run out of money by the end of June without this help.

When asked if the government is planning to give more cash to Dundee University, she said: “We are looking at a range of different options.

“The only ask from the university so far is the liquidity support of £22 million, and that has been met in full.

“We have been perfectly open as a government in saying we want to support the university to have a thriving future, it is vitally important to the higher education sector in Scotland.

“The Scottish Funding Council is also looking at a range of different options put to ministers and we met last Thursday to talk through some of that.

“I hope to be able to say more in the coming weeks.”

How did we get here?

A £30m deficit, along with potential job losses, was first revealed in November - this quickly led to the resignation of Principal and Vice-Chancellor Iain Gillespie.

Only months before, Mr Gillespie had received a pay rise taking his salary to £305,000.

He also faced criticism after it was revealed he had racked up £131,000 in travel and accommodation expenses in just three years, including a £7,154 trip to Hong Kong.

Expenses receipts also show he had taken flights worth thousands of pounds to China, South Africa, Ghana, Kenya, Malawi, Iraq, Nigeria and south-east Asia, and stayed in luxury five-star hotels.

By March the university announced the deficit had grown to £35m and was axing 632 full-time equivalent posts, approximately 20 per cent of all staff.

In a letter to students it said the university’s structural deficit is estimated to be up to £65m, and the institution needs to make operational improvements to the tune of £75m before it can regain a strong cash base and repay all its loans.

Interim Principal Professor Shane O’Neill presented a recovery plan to the university court and said the deficit had been caused by a “severe” drop in international student recruitment, the underfunding of higher education, inflation and increases to employer National Insurance contributions.

However he also acknowledged the financial challenges were also due to “inadequate financial discipline and control” and “some poor investment choices”.

The university later said the number of projected job losses was 700, saying the situation was much worse than first anticipated.

The Scottish Government has handed £22m to the university and the current management team revealed the institution would have run out of money by the end of June without this support.

The comments were made when the new management team was grilled by MSPs on Holyrood’s education, children and young people committee.

Mr Gillespie is now expected to appear in front of this committee soon after initially turning down the invitation.

An independent taskforce led by former Glasgow Caledonian Principal Pamela Gillies has now been set up to investigate what went wrong at the university.

Full confidence in management team

Ms Gilruth met Professor O’Neill on Tuesday morning, and afterwards insisted she has full confidence in the new management team at the university.

She added: “The purpose of my visit today is to send out a very clear and positive message about the future of this institution.

“We want Dundee University to thrive, so we are here to provide that support, provide that assistance, and help.

“There is ground-breaking research happening here and it’s crucial we support that work into the future.”