The University of Dundee is at risk of insolvency, its leadership has warned, as it battles a £35m financial deficit and prepares for over 600 job cuts.
Interim principal Professor Shane O’Neill told MSPs that the full extent of the university’s financial troubles only became clear in November 2024, admitting that previous reports had provided misleading information about its finances.
The crisis has prompted a major cost-cutting plan, including 632 full-time job losses, aimed at saving £49m. However, O’Neill acknowledged that the actual number of affected staff could be higher when considering part-time positions.
University at risk of running out of cash
Tricia Bey, acting chair of the university’s governing court, described the situation as a “grave cash crisis”, adding that without emergency financial support from the Scottish Funding Council (SFC), the university would run out of money by the end of June.
“We have had to consider the real possibility of insolvency,” Bey stated, emphasising the urgent need for financial restructuring.
Newly appointed finance director Helen Simpson, who joined after her predecessor left in October 2024, said she immediately raised concerns about the university’s cash position.
“I was extremely concerned from my first day,” she said. “It quickly became apparent that the university was unlikely to have sufficient cash to get through the financial year without external support.”
What caused the crisis?
O’Neill identified multiple factors contributing to the deficit, including:
A sharp decline in international student recruitment, which he blamed on UK immigration policies
Rising costs, including inflation and increased employer national insurance contributions
Poor financial discipline, mismanagement of resources, and weak investment decisions
A joint external investigation by the university and the SFC is now being launched to determine how the situation escalated to this point.
O’Neill admitted that “better decisions should have been made” and apologised for the impact on staff, students, and the wider Dundee community.
Controversial handling of recovery plan
The university leadership also faced criticism over a leaked password for a document shared with trade unions, which allegedly contained a reference to the number of job cuts.
O’Neill, caught off guard by the revelation, agreed that this was “crass and inappropriate” and promised to investigate how it happened.
As the university grapples with its financial future, mergers and closure are being ruled out, with leadership committed to securing a sustainable recovery plan. However, concerns remain over whether the proposed cuts will be enough to prevent insolvency.
