5 threats facing Dundee University as it battles to recover

The Courier

02-05-2025

Dundee University's alternative recovery plan has been met with cautious optimism – but some threats and risks remain.
In the days after the first attempt at a potential solution to the £35 million crisis, First Minister John Swinney made clear it wasn't acceptable.
With some form of public funding required to support the rebuilding exercise it was clear the university would have to go back to the drawing board.
The result is a fresh attempt to set out a path to sustainability that has led to a pause in potential industrial action from outraged staff and more positive signs from the corridors of power – even with a hefty price tag attached.
But what are the risks?
The Courier examines potential pitfalls that still exist.
Uncertainty over the crisis, and admitted mismanagement, are at the heart of the risks.
Appearing before Holyrood's education committee, Interim principal Professor Shane O'Neill said he could not rule out potential criminality.
Several investigations are ongoing, including a probe led by Professor Pamela Gillies with the help of international audit firm BDO. The university's auditor, Ernst and Young, is also understood to be carrying out its own assessments.
A previous Holyrood education committee, attended by senior mangers, led to a series of explosive revelations that knocked the confidence of staff, students and even affected negotiations with the university's bank.
We revealed on Thursday that the institution's charity status could be at risk after it failed to submit its annual accounts on time.
While applications from home students are up there are fears some may opt to study elsewhere as a result of the damage caused in recent months.
The exodus of senior managers also posed problems, leaving a small group to run the university.
Prof O'Neill, who was the former principal's deputy, says he plans to remain in post but he may be criticised by the reports into how the crisis developed.
Any sudden change in the leadership, and an urgent need to recruit new senior managers to the top of the university, could prove difficult.
The biggest risk – and the university's main revenue generator – is student recruitment. The sudden financial crisis was in a large part down to significant challenges attracting people to study at the university in 2024.
Of the £35 million deficit that left it facing a cash crisis around a third was down to an under-recruitment of international fee-paying students.
There was also a under-recruitment of Scottish students.
In addition to a reduction in fee income, this also meant the university had to shell out around £2 million for under-occupied student halls operated by private companies.
Many of the challenges that led to this recruitment fall still exist – such as immigration changes which made the UK less attractive for postgraduates looking to study abroad. These are seen as unlikely to change.
The international market remains extremely competitive and parts of the world the university targets, such as West Africa, continue to have fragile economies.
The Scottish Government funding settlement for Scottish students is also unlikely to change significantly, meaning the sector will still rely on international income to make up the shortfall between what it receives for each home student and what it costs to deliver their education.
The Scottish Government has been clear it is prepared to consider further requests from the university for assistance.
It is expected the total cost could be around £60 million over two years, including financing for the voluntary severance scheme and potential liquidity support.
The university is also locked in negotiations for access to a commercial lending facility and access to this could prove crucial but may be dependent on student recruitment and the ongoing reputational damage.
The Holyrood election also looms large next year, adding an element of political uncertainty.
While there is a cross-party political consensus that Dundee University is 'too big to fail', a new government in power in Edinburgh could make a different choice about how much support it provides.
The university has ruled out compulsory redundancies and will first seek to achieve a reduction of 300 full-time equivalent roles through voluntary severance.
This will free up around £20 million and while Professor O'Neill says he believes the figure can be achieved, it will depend on staff choosing to take up the offer.
But using a voluntary severance scheme also cedes some control over who is lost from where in the university, with the departure of key staff from the wrong areas a possibility.
'We will try to manage it as carefully as possible, so that we're not seeing exits of staff from areas that are already overstretched,' Professor O'Neill told The Courier previously.
A worsening economic picture is another potential risk outwith the university's direct control.
Policy changes by the UK Government, such as an increase in employer's national insurance contributions, has made staffing bills more expensive.
And across the world, potential economic uncertainty has also increased costs in areas like the delivery of capital projects.