Dundee University’s principal and two senior members of its governing body have resigned after a highly-critical report blamed poor financial controls and a lack of transparency for its financial crisis.
An independent investigation carried out by Professor Pamela Gillies, published by the Scottish Funding Council (SFC), says self-inflicted damage resulted in a £35 million deficit.
It said a series of problems should have alerted senior members of the university to its worsening financial position.
Prof Shane O’Neill, who took over as interim principal in December and was previously the deputy vice-chancellor, resigned immediately along with Tricia Bey, the acting chairwoman of the university court, and Carla Rossini, convener of the finance and policy committee.
Professor Iain Gillespie, the former principal who left last December, along with other senior finance managers, were described as not having “a culture of openness” at all levels. He stood down weeks after he had told staff that job losses were “inevitable” in order to tackle a “significant deficit”. He blamed “an extremely challenging period” for the UK higher education sector.
The University today moved swiftly to appoint Prof Nigel Seaton as Interim Principal and Vice-Chancellor on a short-term basis. Prof Seaton joined the University in May as Interim Provost. He was previously one of Scotland’s longest serving Vice-Chancellors, having joined Abertay University in 2012 and served as Principal until 2022.
The Scottish Parliament’s education committee is expected to recall Prof O’Neill to give evidence next week to explain the situation that forced the Scottish government to provide a £22 million bailout to ensure the immediate future of the institution.
The investigation found that almost £40m of ringfenced money had been spent elsewhere and there had been “a lack of real action” to address an £8m “hole” due to a fall in international student recruitment.
It said those in charge of the university’s governance should have known well before November last year that there was a problem.
In the year to July 2023 the university saw its revenue increase by £33.7m, mainly driven by growth in international students and an increase in research income. However, the recruitment of overseas postgraduate students subsequently fell from 1,230 to 393.
An inevitable need for savings was not acted upon, said the report and this “set the university up for failure” in the 2025 financial year.
The report noted that the university’s message was one of “resilience” and “growth” which “set the tone within the university for investment and growth at a time when savings should have been rapidly implemented.”
It added: “This was at a time when the Principal was aware that there was an £8m “hole” in the (2024 financial year) budget.
“There were no plans in place to deliver savings necessary to move into a surplus position.”
Prof O’Neill said it was with a “very heavy heart” that he had decided to step aside, adding: “I have done all I can to set the university on a path to recovery, engaging with internal and external stakeholders to find the best way forward.
“I had hoped that we would be further along that path by now, and it will now be for others to steer that course into the future.
“I am truly sorry for the impact this financial crisis has had on many people, particularly our staff and students.”
The Scottish government’s Education Secretary Jenny Gilruth said: “Whilst the university is an autonomous institution which is ultimately responsible for decision-making around its day to day operations, the Scottish government will do everything possible to secure a positive future for Dundee.”
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