The University of Dundee and our future

The University of Dundee is facing significant financial challenges, with a budget deficit this year that requires urgent action. Professor Shane O’Neill, Interim Principal and Vice-Chancellor of the University, has outlined the current position and how we are responding to it, with a commitment to delivering a comprehensive recovery plan:

We are busy every day delivering excellent education programmes, and high quality, impactful research. We will continue to do this for the long-term because we will come through the difficulties we are facing just now. We will emerge stronger and more resilient so that we can continue to have a positive impact on our city, the region and beyond. 

I do not underestimate the scale of the challenge before us, to get back to a position of financial sustainability and to ensure a suitably balanced profile of activity that provides stable foundations for the long term. It will take a lot of hard work, and it will require some difficult and painful decisions, but we will do it. 

The recovery plan and associated proposals we will be bringing forward in a matter of weeks will address the significant financial challenges we are facing and will underpin our sustainability and future success. It will address the size, shape, structure and balance of the University. There will be change, but that change is necessary if we are to be fit for the future. 

How did we get here? 

Things have not been done optimally in the past, something which is clear when we consider where we are right now. We, the senior management of the University, do accept the responsibility we bear for that. 

Decisions have been made to support the University’s ambition to grow and to extend our impact which have left us more exposed than we should be in the face of unprecedented challenges. While we were ambitious about growth, we did anticipate challenges to the financial underpinnings of that strategy, particularly with respect to international student recruitment. We had a deficit budget of £11.5 million approved for 2024/25, as we set about making substantial savings to mitigate that pressure. 

However, the extreme nature of the downturn exceeded our most pessimistic projections for student intake in 2024/25, as was the case for many other institutions in the sector. We are seeing the impact of this in the widespread difficulties for many universities across the UK wrestling now with significant deficits. 

As I outlined in November, the critical factors for our deteriorating financial position have been the severe drop in international student recruitment, in the context of the ongoing structural underfunding of higher education, allied to cost increases, inflationary pressures and a range of other detrimental changes, including an increase in our National Insurance contribution. 

We also, unexpectedly, performed poorly on our Scottish recruitment which has compounded the issue, something we are addressing with urgency this year. Under-recruitment of students means that this year we have empty rooms in residences that we anticipated being full, resulting in a substantial further loss of income.

We are committed to applying more rigorous financial oversight and scrutiny, and more transparent decision-making to safeguard the University’s future. One of our priorities is to rebuild trust and faith in our financial management and governance. 

What is happening now? 

The recovery plan we are working on is comprehensive and complex, reflecting our nature as a large, multidimensional organisation with a diverse range of income sources and an array of cost pressures. 

The process we are undertaking to develop this plan involves discussion with external stakeholders and it will then have to be taken to the University Court for their input and approval. That will happen in February. 

At its core, the plan is designed to build on our strengths so as to ensure the long-term success of the University. We need to deliver greater levels of operational efficiency, while fostering collaboration, and ensuring academic and research excellence in all our education, research and enterprise activities. All of these measures are necessary if we are to create a sustainable, resilient and thriving institution for generations to come. 

The recovery plan has been the key priority for the University Executive Group over the past months, and we have been meeting daily to consider the various strands that are being woven together into a coherent and compelling plan. We will share the full details of that plan once we have the approval of the University Court. 

An independent investigation, led by an external agent, will be undertaken into how we arrived in this position of financial crisis. This is something we are moving to initiate now. We will make the findings of that report public so as to provide assurance internally and externally that lessons will be learned to secure our future. 

As you know, we took some immediate actions to improve our position, by introducing a freeze on recruitment, cutting back on capital expenditure, and eliminating all but essential operational expenditure. 

We have a smaller student population than we planned for, and so we will have to resize in all other respects. This, unfortunately, means that a reduction in staff numbers is inevitable. We will try to achieve as much of that reduction as possible through voluntary means, and we will bring forward more details of that as part of the full recovery plan. I had hoped that we could share details of this sooner, but the complexities of the situation have not allowed us to do so. 

We will consult with staff, exploring all possible options, and we will ensure that these processes are handled fairly and sensitively.  

I appreciate that morale among colleagues is low amid the uncertainty and anxiety created by the current situation. I do appreciate everything you have done to ensure we continue to do excellent things in teaching, research and delivering wider impact. 

I also appreciate the concerns of students amidst the headlines they may be seeing. It is our first priority to ensure that all our students continue to have an excellent experience, and that is a commitment we can also make with confidence to those prospective students we hope to see join us soon. 

As a parent of an alumnus of this institution, I can say that the student experience is at the heart of my own personal commitment to this University and the city of Dundee. Had my son not had a great experience here, which set him on a positive professional trajectory, I would almost certainly not be here myself. Students have always been the heartbeat of our institution, and their experience remains our top priority for the future. 

We have challenging times ahead but there is a long and positive future for the University of Dundee ahead of us. I will do everything I can, working with the leadership team and colleagues, to ensure that we will deliver this. 

Professor Shane O’Neill
Interim Principal and Vice-Chancellor