An investigation has been launched to find out ‘what went wrong’.

Dundee University’s decision to axe 632 jobs has been branded "devastating", as the institution’s interim principal admitted financial mismanagement and “poor investment decisions” had contributed to the cuts.

Around 20 per cent of the crisis-hit university’s 3,000-strong workforce will be axed, including 197 academic staff, as it seeks to find £75 million.

Interim Principal Professor Shane O’Neill made the announcement during an online meeting, where he said an external investigation will also be launched to find out “what went wrong”.

Over 600 staff at Dundee University are to be axed. | Lisa Ferguson/National World

Professor O’Neill presented his recovery plan to the university court on Monday, where he said the £35m deficit was caused by a “severe” drop in international student recruitment, the underfunding of higher education, inflation and increases to employer National Insurance contributions.

However in a letter to students he acknowledged the financial challenges were also due to “inadequate financial discipline and control” and “some poor investment decisions”.

The letter said the university’s structural deficit is estimated to be up to £65m, and the university needs to make operational improvements to the tune of £75m before it can regain a strong cash base and repay all its loans.

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Staff cuts will hit every school at the university and includes 197 academic roles, 119 school-based service staff and 316 directorate-based professional staff.

The university says it will open a voluntary redundancy scheme, but added it is “very unlikely” it can avoid compulsory redundancies.

As well as staff cuts the university will also move from eight academic schools to just three - arts and social sciences faculty, engineering, science and allied health faculty, and medicine and life sciences faculty.

The number of taught modules will also be reduced by 20 per cent.

The university is also planning to sell off property, intellectual property and shares.

Professor O’Neill’s letter said these proposals “lay out the path” to financial recovery, but “do not yet constitute a complete plan to delivering financial sustainability”.

Dundee University has already made over £17m in savings this year after cutting back costs.

All courses will continue until the end of the current academic term, and degree shows and graduation ceremonies planned for this summer will go ahead as planned.

Professor O’Neill said: “The current financial crisis has challenged us to ask some very fundamental questions about the size, shape, balance and structure of the university.

“Getting there will not be easy and we are determined to take on board all relevant lessons from the past and the various factors that contributed to the current position.”

Dundee staff in the University and Colleges Union are currently on their last week of a three-week long strike against the job cuts - the union’s general secretary Jo Grady says staff are being made to pay the price for “egregious management failure”.

She said: “It’s four months since workers first learned that there was a problem, and it feels that very little has happened in the intervening period to turn the university around.”

This comes after former principal Professor Iain Gillespie told staff back in November that job losses were “inevitable” - he resigned a month later after the university defended a £7,000 business trip he took to Hong Kong.

Chair of the university court Amanda Millar also resigned last month.

Scottish Labour MSP Michael Marra said: “I think this is probably one of the biggest redundancies in the history of Scottish higher education.

“What’s clear is that there is a story of huge failure of leadership from the university over a period of years.

“There’s still, I think, a whole story to come about on how on earth they managed to create such a financial mess.

“But it’s people who are paying with their livelihoods.”

Willie Rennie MSP, the Lib Dems’ education spokesman, said: “This is devastating news for the workforce at Dundee University who now face profound uncertainty.

“It is also a devastating blow to the wider economy of Tayside and Fife.

“There have clearly been some reckless decisions taken by Dundee University leadership, but this situation also reflects the underlying Scottish Government funding model.

“That’s why we need an urgent review of funding arrangements to prevent further crisis in Scotland’s universities.”

Miles Briggs MSP from the Scottish Conservatives added: “These are staggering and devastating job losses, but Dundee University is just the most extreme example of the crisis facing Scottish further education.

“Thanks to the SNP’s funding model and years of failure to support higher education, many of our universities now face alarming cuts and uncertain futures.

“Meanwhile, several colleges have announced that their survival is in doubt.

“The SNP has presided over a catastrophic education policy that has let down students at every level.

“It is now essential to explore options for radical change if we are going to restore Scotland’s reputation for educational excellence.”

Higher Education Minister Graeme Dey said: “Whilst Dundee is an autonomous institution, it is my expectation that the university engages fully with staff and makes every effort to protect jobs.

“Compulsory redundancies should only ever be considered as a last resort, after all other cost saving measures have been fully explored.”

Mr Dey added the Scottish Government has recently announced an additional £15m for the Scottish Funding Council to support universities like Dundee.

Joe FitzPatrick, the MSP for Dundee West, said the level of job cuts is unacceptable, and added: “There still remains a lack of clarity about how the university ended up at this point and why these issues weren’t addressed sooner.

“Staff who are hearing that their jobs are at risk deserve more transparency from the university.”

Unison Scotland regional organiser Mo Dickson said: “Persistent underfunding has left many institutions in financial crisis, but essential support staff shouldn’t be bearing the brunt of budget woes.

“The scale of the cuts and their impact on employees and students highlight serious leadership failings at Dundee University.

“Staff are still in the dark about what the university will do to save cash. The priority should be finding savings without a reduction in roles that give a safe, secure and supportive experience for students.”

Unite general secretary Sharon Graham said: “The distressing situation unfolding at Dundee University is down to gross financial mismanagement plain and simple. It is not alarmist to say that the very existence of the university is at risk and this would have a devastating economic impact on the city.

“Unite will support our members every step of the way in defence of their jobs.”

More than 600 jobs to be axed at crisis-hit Scottish university

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