Observers from Scottish Government body sent in to crisis-hit university's meetings after £22m lifeline

A Scottish Government body has revealed plans to closely monitor decision-making at Dundee University after agreeing £22 million of emergency funding to prevent the institution from becoming insolvent.

It will include observers attending meetings of the university’s governing body and its key committees, as well as being sent regular financial updates.

The £22m support package was approved by the board of the Scottish Funding Council (SFC) last week, one day after MSPs heard “jaw-dropping” evidence from senior figures at the institution.

The testimony included that the university would run out of money by June without help, and that bosses did not know whether key financial information had been “deliberately” withheld from them by their predecessors.

The SFC has now revealed the conditions it has put on the liquidity support it is providing.

A poster at Dundee University | Lisa Ferguson

In a letter to Holyrood’s education committee, SFC finance director Richard Maconachie said the funding package was comprised of £12m in financial transactions (FTs), which are low-cost loans, and £10m of grant funding.

He said it was specifically to allow the university to meet its liabilities as they fall due, including capital payments and paying its staff.

The taxpayers money is not to be used to support any job losses, but SFC expects to be informed of any proposed redundancy programme, including the terms and conditions.

The SFC must also be allowed to attend “as observers” any meetings of the university’s ruling court, its finance and policy committee, and its audit and risk committee.

Meanwhile, the university should provide the SFC with minutes of all meetings of its financial recovery board within 10 working days, as well as updated accounts monthly and details of its current cash position.

Mr Maconachie said: “It is SFC’s expectation this funding will be recovered and replaced with alternative medium-term funding as part of finalising the financial recovery plan.”

He added: “SFC recognises the gravity of the situation at the University of Dundee and the committee's interest. We remain committed to sharing information as transparently and openly as possible.”

A spokesperson for the university said it was extremely grateful to the SFC for the support and it would continue to work closely with the organisation towards a full recovery plan.

The SFC has been working with the university since the scale of its financial troubles emerged at a meeting in November.

The Scotsman revealed last week how the university’s former principal, Iain Gillespie, broke the news of the institution’s crisis to stunned members of the court.

MSPs heard at a hearing that some senior figures had been under the impression the university was in a break even position in its 2023/24 accounts, before being told it had a deficit of £12.3m in 2023/24, and was heading towards a loss of £30m in 2024/25.

Mr Gillespie, who resigned in November, is now due to be called to give evidence to MSPs on the education committee, as will former court chair Amanda Millar, and former director of finance Peter Fotheringham.

The university recently announced plans to cut 632 full-time-equivalent posts. However, the Scottish Government and the SFC have told the university to look at “alternative” options to limit these cuts.

An independent inquiry is also due to be launched into what went wrong at the university. It will be chaired by Prof Pamela Gillies, the former principal of Glasgow Caledonian University, and could take three or four months to complete.