Dundee University insolvency 'a real possibility'

A senior Dundee University figure has told MSPs that insolvency is a "real possibility" as the institution attempts to tackle a £35m funding black hole.

Acting chair of court Tricia Bey said without forthcoming financial support from the Scottish Funding Council (SFC) the university will run out of money by the end of June.

Interim principal Prof Shane O'Neill told the Scottish Parliament's education committee he was given the "false assumption" last year that the university was close to breaking even despite having a £12.3m operating deficit at the time.

Prof O'Neill announced last week that 632 jobs would be cut at the university to address the eight-figure deficit.

The head of an independent investigation into the university's financial situation is expected to be announced this week.

Former principal Prof Iain Gillespie told staff in November that job losses were "inevitable" and blamed "an extremely challenging period" for the UK higher education sector.

He resigned with immediate effect in December.

Prof O'Neill began by telling the committee: "We wouldn't be sitting here if better decisions had been made."

The professor said that "misleading information" had been given to him and others last year over the university's position.

He said: "There was a false assumption that towards the end of the last financial year that we were close to break even.

"That was the way in which we were operating the university - that did not turn out to be the case.

"We were well off break even position and that only became clear in November."

The professor said that "all of the failings" of reporting at executive and court level were "very clearly stated" as subjects of the forthcoming investigation.

Prof O'Neill admitted that poor investment decisions had been made, but insisted that the right team was in place to take the university forward.

The university's acting chair of court Tricia Bey said it was "very clear" the university faced a "grave cash crisis".

She said: "Without the very welcome liquidity support from the SFC, we will run out of cash at the end of June.

"So this isn't 'let's just think about it for a few more years.'

"We do have to bear in mind the possibility that we become insolvent, and it is a real possibility."

Committee member John Mason MSP said that in December 2023, auditors had not identified any concerns that would not allow the university to continue as a going concern until July this year.

Ms Bey agreed, adding that even in October last year, there was a statement by the university's finance team that this was still the case.

She said: "Two weeks later, in a date that is etched in all our memories, we were told by the principal that actually, far from the financial situation we all thought we were in, the position was very different."

Ms Bey said the investigation was important to find out "whether things were deliberately kept from us".

She said: "Whether this is oversight/incompetence, or whether somewhere in those processes things have been deliberately kept from filtering upwards.

"At the moment, we genuinely don't know the intention behind it.

"I'm sure everybody in this room wants to know that answer."

During the session, committee convener Douglas Ross MSP revealed that the university's recovery plan document sent to trade unions included the number of job losses in its password.

Prof O'Neill replied: "I'm surprised at that, I didn't know that."

Mr Ross asked: "Do you think it's crass and wholly inappropriate that the number of job losses were included in that password?"

The professor replied: "If that was deliberate, yes I agree with you."