Independent investigation launched into Dundee University financial crisis

An independent investigation has been launched into the financial crisis at the University of Dundee.

It comes a week after University chiefs told a Government committee that financial mismanagement led to a £35m funding shortfall.

The University previously announced that it plans to cut more than 600 full-time jobs to address the deficit.

Every school and directorate within the university will undergo a “significant” restructuring resulting in a loss of around 20% of its 3,000 strong workforce, it said.

Even with all of the cuts, Dundee University bosses previously said the school will be “out of cash” by the end of June.

On Tuesday, the Scottish Funding Council (SFC), public body in charged of funding Scotland’s further and higher education institutions, confirmed it was investigating.

The enquiries will try to understand the school’s funding challenges and determine why the position deteriorated so seriously and apparently so suddenly.

More specifically, it will look at the causes of the “worsening financial situation” and the balance between external factors – such as declining international student figures – and internal factors, like leadership and cost control.

It will also look at the “reasons the University failed to manage its cash prudently, allowing it to deteriorate
to critically low levels” and the reason why “key signs of distress” were not reported to the University Executive Group (UEG) and court in a timely fashion.

It will also scrutinise the role of the university’s management and governance in the deterioration and look into whether or not the appropriate questions were asked at the UEG, court and its committees.

“The investigation will provide the opportunity for the University to learn lessons from the circumstances that led to the deterioration,” the SFC announcement said.

“SFC will also share any lessons that might be beneficial to the wider sector across Scotland.”

Professor Pamela Gillies, former principal at Glasgow Caledonian University, has been appointed to oversee the investigation.

Francesca Osowska, SFC chief executive, said Dundee University is “one of Scotland’s world-leading institutions”, and said the Funding Council was committed to working with institution chiefs to “see it return to a position of financial health”.

“Alongside this work, it’s vital that the circumstances surrounding the financial challenges at the University are fully investigated, with rigour and transparency, and that lessons are learned to minimise the risk of this situation arising again,” Ms Osowska said.

“The appointment of an independent team will ensure a robust process. We will share the findings once this work has concluded and expect the University to act on those findings.”

The investigation is being launched one week after the SFC agreed to provide a £22m support package to the University of Dundee.

Funding chiefs agreed to make the money available to the cash-strapped institution in a combination of grants and low-cost loans.

It meets the request made by the university for help in a recovery plan drawn up in a bid to plug a £35m deficit – with bosses also seeking to cut 632 full-time equivalent posts as they look to make savings.

The funding comes after the Scottish Government announced an additional £25m was being made available to help the higher education sector.