Holyrood pressure mounts as Dundee leads Scottish sector crisis

The Scottish government was under pressure to indicate whether it would bail out struggling higher education institutions, amid a mounting financial crisis at the University of Dundee.

Dundee principal Iain Gillespie stepped down suddenly at the start of the month, after warning that job cuts could be needed to fight a £30 million deficit.

Michael Marra, a Labour MSP for North East Scotland who spent 12 years as a researcher at Dundee, said the university had faced a “regular drumbeat” of financial difficulties and job cuts, stuck in a “vicious cycle” of trying to bankroll its research off the back of a relatively small student population, and had been particularly exposed to recent downturns in international recruitment.

The Scottish Funding Council (SFC) has been working on a financial recovery plan for Dundee, according to reports.

“It is absolutely too big to fail in terms of the regional economy, so that will not and cannot be allowed to happen. So the question is, what will the Scottish Funding Council and the Scottish government do to sort it out?” said Mr Marra.

The Westminster government has faced significant scrutiny over its position on university insolvency, insisting that it will not bail out failing English institutions, but facing scepticism that it would actually allow a major provider to go to the wall.

Holyrood has been much quieter on the issue, despite the long-running squeeze on public funding pushing growing numbers of Scottish universities into financial difficulties.

“There are levers available – the Scottish government could do something about it, and they haven’t…despite knowing what the headlines are,” added Mr Marra.

“I don’t see evidence that they are more willing to do it [than Westminster], but they’re going to have to.”

Mr Marra said the ruling Scottish National Party seemed “reluctant” to get involved in bailouts, fearing that doing so would encourage other institutions to ask for help.

But Carlo Morelli, a senior lecturer in business and economic history at Dundee, said ministers “should be making sure that this university does not go bankrupt, and it shouldn’t be in a position where its management could possibly have led it to that point”.

He said staff and students would welcome a statement that Dundee would not be permitted to go under.

A Scottish government spokesperson said: “Whilst universities are autonomous institutions with responsibility for their own decisions, the Scottish government and the SFC will continue to offer support to individual universities, such as Dundee, as they develop their own plans to mitigate their financial challenges.”

patrick.jack@timeshighereducation.com