Prestigious Scottish university cuts deficit to £8.5m after 'swift and decisive action'

The principal of Aberdeen University has hailed “significant” progress in stabilising the finances of the ancient institution, cutting its underlying deficit to £8.5 million in 2023/24.

Professor George Boyne said the university had taken “swift and decisive action to secure a sustainable financial position”, despite rising costs and lower public funding.

The £8.5m underlying deficit represented a reduction on the £12.5m loss forecast earlier in the year.

The university’s annual report highlighted an improvement in its overall position since last year, when The Scotsman revealed its accounts for 2022/23 had warned there were uncertainties that “may cast significant doubt over the ability of the university and group to continue as a going concern”.

Professor George Boyne, principal of Aberdeen University | Submitted

Aberdeen University bosses had said one of their “key priorities” had been to remove this auditing phrase from its next accounts for 2023/24, which it has done.

A recovery plan was launched at the end of 2023, including a voluntary severance scheme. The latest accounts show savings of £19m were achieved in 2023/24, with £13m coming from staff costs and £6m from operations.

To meet its £6.7m deficit target for 2024/25, a total of £18.5m of savings have been identified to date.

As previously reported by The Scotsman, £10m had been set aside in 2024/25 to fund a fresh voluntary severance scheme. But the new report said “as things currently stand, there are no plans for this further ER/VS scheme”.

The accounts also show Prof Boyne’s salary increased from £281,000 to £292,000 in the year, with his package including living allowance and pension contributions up from £313,000 to £320,000.

In the report, the principal said: “Faced with rising costs, lower public funding, and a reduction in our international on campus student recruitment, set against an external environment fraught with political, economic, and social tensions, we took swift and decisive action to secure a sustainable financial position.”

Prof Boyne added: “Our progress has been significant and we reduced an initial projected deficit of £12.5m to £8.5m for 2023/24 and made in-year savings for 2024/25 of £18.5m.”

Several other Scottish universities have reported underlying deficits in their accounts for 2023/24.