The University of Dundee would have run out of money by the end of June without a government bailout, with insolvency still a “real possibility”, MSPs have heard.
An extra £10 million has been made available to the institution by the Scottish government after it announced plans to cut 632 jobs and scale back research activity, a move which staff warned would take a “wrecking ball” to the local economy. Dundee had already received £15 million of additional support in February.
Appearing before the Scottish Parliament’s Education, Children and Young People Committee, Tricia Bey, Dundee’s acting chair of court, said the university’s finances could still worsen, warning that it faced a “very grave cash crisis”.
“Without the very welcome liquidity support from the [Scottish Funding Council], we will run out of cash at the end of June. So this isn’t a, ‘Well, let’s just think about it for a few more years’ [scenario].’ Our advice has been from our lawyers that we do have to bear in mind the possibility that we could become insolvent.”
Bey said that should the university find itself on the “verge of insolvency”, it would need to bring in insolvency advisers.
Senior management present at the hearing stressed that the current management was largely made up of interim members, after various members of the executive left Dundee year. This included the university’s principal Iain Gillespie, who stepped down suddenly at the start of November, after warning that job cuts could be needed to fight a £30 million deficit, which the university has since revised to £35 million.
Shane O’Neill, the interim principal, said that there has been “inadequate financial discipline and control” across the university, as well as “inadequate oversights at executive and court levels of our financial position”.
But while O’Neill – who up until December was deputy vice-chancellor and provost – agreed with MSPs that there had been a level of “gaps in the competence that you would expect in the leadership”, he denied that this included himself.
Senior management explained that the extent of the university’s finances only became apparent in November, despite the university posting a £12.3 million operational deficit last July. O’Neill said the university court had been given “misleading information” that meant the extent of the university’s financial situation went undetected.
“There was a false assumption that towards the end of the last financial year we were close to breaking even; that was the way in which we were operating the university. That’s the way in which I was engaging with deans as budget holders. But that did not turn out to be the case. We were well off a break-even position,” he said.
The university’s budget set in July 2024 had been calculated based on savings assumptions that ultimately “weren’t delivered”, Bey said.
When asked if he believed any criminal activity had occurred at the university, O’Neill said he “hadn’t seen any evidence”, but added: “We’re asking those questions.”
The university is shortly set to publish the terms of reference into an independent investigation into the causes of the crisis in partnership with the SFC.
“Without pre-empting the outcome, I can say that we wouldn’t be sitting here if better decisions had been made,” O’Neill said.
