University of Dundee Taskforce holds first meeting To Advise On Its Serious Financial Problems

26th April 2025

An external advisory group established to advise on the future success of the University of Dundee held its first meeting in the city.

The group, which is chaired by Sir Alan Langlands, agreed on the urgency of action required to advise and support the university to address its current financial difficulties during the meeting yesterday.

Representatives from the University, Dundee City Council, business, trades unions, student union, enterprise and skills bodies and the Scottish Government were among those who took part.

Sir Alan Langlands, chair of the Advisory group, said, "All members were clear that the University of Dundee is a leading research intensive institution, providing highly rated education, and playing a crucial role in the economic, cultural and social life of the City, region, and the country as a whole. There was a collective commitment to support the University in ensuring its short, medium and long term sustainability.

"Our discussion focussed on the context in which it is operating, and the urgent need to tackle its financial difficulties, build on its strengths, and set out a clear plan for the medium and long term future.

"The group respects the autonomy of the University, the decision making responsibilities of the University Court, and the role of the Scottish Funding Council in navigating the future. We hope that the support and advice we provide will be considered by the decision makers in a timely manner."

Education Secretary Jenny Gilruth said:

"I am determined that the University of Dundee - with a vibrant community of staff and students at its heart - will thrive long into the future and the work of this Taskforce will help contribute to that.

"The Scottish Funding Council has already provided £22 million to University of Dundee as support for liquidity, which is giving them the space and time to work through a plan for financial stability. Ministers have been clear we will carefully consider any further asks made to the Government.

"Students should accept their offers from the University and can be confident in its future."

Professor Shane O'Neill, Interim Principal and Vice-Chancellor of the University of Dundee, said, "We welcome the support of Sir Alan and all parties involved with the Advisory Taskforce, which reflects the importance of the University to Dundee, the Tay Cities region and beyond, and the collective will to establish a more sustainable and successful future for the University.

"We will work with the Taskforce, the Scottish Government, the Scottish Funding Council and others to ensure we achieve that goal."

Attendees at the meeting included:

trade union representatives , including national and local representation
the leader of Dundee City Council
principals of Abertay and St Andrews Universities and Dundee & Angus College
the Convenor of Universities Scotland
the Dundee University Student Association President
local representatives of Scottish Enterprise, Skills Development Scotland and Developing the Young Workforce
the Chair of NHS Education for Scotland
for business interests, Tim Allan, Chair of V&A Dundee
In addition to the advisory Taskforce, the Deputy First Minister is chairing a cross-Ministerial group to consider what further action the Scottish Government may be able to take to support the University as it continues to develop its Financial Recovery Plan.

The University of Dundee is currently facing a £35 million deficit. To address this financial challenge, the university has proposed significant restructuring, including cutting over 600 full-time equivalent jobs. The Scottish Government has provided £22 million in liquidity support to help stabilize the institution. Additionally, an independent investigation has been launched to determine the causes of the financial difficulties and ensure lessons are learned for the future.

The situation has led to staff protests and strike action, with hundreds of university workers expressing concerns over job security and the institution's long-term future5. The university leadership has acknowledged inadequate financial discipline and oversight as contributing factors to the crisis.

The budget cuts at the University of Dundee will have significant consequences for students and academic programs.

The Story So Far

Course Reductions: The university plans to reduce module delivery by 20%, meaning fewer course options for students and potential discontinuation of certain programs.

Faculty Restructuring: The current eight academic schools will be consolidated into three faculties, which could lead to larger class sizes and fewer specialized courses.

Research Limitations: The university is reorganizing research into a smaller number of focused institutes, which may limit funding for certain research areas and reduce opportunities for postgraduate students.

Student Support Services: Cuts to technicians and student support roles could affect academic assistance, career guidance, and mental health services.

Tuition & Fees: While tuition fees for Scottish students remain unchanged, international student enrolment declines may lead to higher fees or reduced scholarships.

Students and faculty have raised concerns about the impact on education quality, and strike action has been proposed to challenge the restructuring. The university is working on a financial recovery plan, but uncertainty remains.

Other Universities
Universities across the UK and Europe are implementing various strategies to navigate budget cuts and financial challenges. Here are some common approaches:

Merging Departments: Many universities, including Cardiff and Durham, are consolidating departments to reduce administrative costs and streamline operations.

Reducing Staff: Institutions like Durham University have announced £10 million in cuts, leading to 200 job losses. Cardiff University is also cutting 400 full-time jobs.

Increasing Tuition Fees: In England, tuition fees have been raised for the first time in eight years—from £9,250 to £9,535—to stabilize university finances.

Diversifying Income Streams: Universities are exploring alternative funding sources, such as corporate partnerships, research grants, and alumni donations, to reduce reliance on tuition fees.

Cutting Courses: Some institutions are discontinuing less popular programs, particularly in arts and humanities, to focus on financially sustainable subjects.

Efficiency Measures: Universities are implementing cost-saving initiatives, such as reducing campus maintenance expenses and optimizing digital learning resources.

The financial crisis is affecting 40% of England's universities, with some institutions facing a material risk of closure unless they take drastic action.

Funding
University budget management varies across countries, but some key trends have emerged globally:

Performance-Based Funding: Many countries, including the UK and the US, are shifting towards performance-based funding, where universities receive financial support based on metrics like graduation rates and research output.

Cost-Sharing Models: Governments are increasingly reducing direct funding, leading universities to rely more on tuition fees, private donations, and corporate partnerships.

Endowment Funds: Prestigious universities, especially in the US, use endowment funds to secure long-term financial stability. These funds are managed through investments and asset management.

Public vs. Private Funding: Some countries, like Germany and Norway, maintain strong public funding, while others, like the US and Australia, rely more on private sector contributions.

International Student Revenue: Universities in countries like Canada and the UK are increasing international student enrolment to boost revenue, as these students often pay higher tuition fees.

Performance-based funding (PBF) has mixed effects on education quality, depending on how it is implemented. Here are some key impacts:

Improved Accountability: PBF encourages universities to focus on graduation rates, student retention, and research output, leading to more structured academic programs.

Unintended Consequences: Some studies suggest that PBF can pressure institutions to prioritize metrics over student learning, potentially leading to grade inflation or reduced academic rigor.

Funding Inequality: Universities with historically lower graduation rates—such as those serving underprivileged students—often receive less funding, exacerbating resource disparities.

Short-Term Gains vs. Long-Term Stability: While PBF can lead to quick improvements in performance metrics, it may not sustain long-term educational quality.

Impact on Research: Some institutions shift funding away from research to focus on student completion rates, affecting innovation and academic contributions.

The effectiveness of PBF depends on policy design—some models include equity adjustments to support disadvantaged institutions, while others strictly reward high-performing universities.

Digital Transformation: Institutions are investing in online education and digital infrastructure to reduce costs and expand access to education.

Edinburgh University
The University of Edinburgh is grappling with a severe financial crisis that has forced the institution to take drastic cost-cutting measures. Here are the key points regarding the finance problems:

Significant Budget Deficit: The university announced the need to cut around £140 million from its budget—a deficit so large it's been described as a "black hole" amounting to roughly 10% of the university's annual turnover. This shortfall highlights the mismatch between stagnant public funding and rising operating costs over the past several years 2.

Cost-Cutting Measures and Staff Redundancies: In an effort to stabilize its finances, Edinburgh implemented a voluntary redundancy scheme, with roughly 350 staff accepting severance packages. This step is projected to deliver annual savings of around £18 million. However, the principal has also indicated that further measures, including the possibility of compulsory redundancies, might be necessary if the situation does not improve. In tandem, a freeze on academic promotions for the 2025-26 academic year has been introduced, signalling broader uncertainty regarding the university's staffing and operational structure.

Operational Challenges Compounding the Crisis: Beyond the headline figures, the finance problems extend to operational issues. There have been reported challenges with the university's internal finance system—often referred to as People and Money—which have led to delays in processing payments for staff, students, and suppliers. These delays not only disrupt day-to-day operations but also add to the overall financial strain, further undermining confidence in the administrative infrastructure .

Underlying Context and Broader Impact: The root causes of these budgetary issues include a prolonged period of funding stagnation amid rising costs for wages, housing, food, and energy. The crisis at Edinburgh is part of a wider pattern seen across Scottish higher education, where institutions have become increasingly reliant on income from international student enrolment—a model now under threat due to global geopolitical shifts and changing immigration policies.

These measures are having a profound impact on the academic community, introducing a climate of uncertainty among both staff and students. The financial pressures are prompting debates about the sustainability of the current funding model and raising concerns over potential impacts on academic programs, research quality, and overall student support.

Aberdeen University
Aberdeen University is facing significant financial pressures that have led to concerns about its long-term viability as a going concern. Here's an overview of the situation:

Financial Uncertainty and Warning: In its latest annual report, the university highlighted "material uncertainty" regarding its ability to continue operating over the next 12 months. This warning is driven by a combination of rising operating costs, reduced Scottish Government funding, and a notable decline in international student enrolment, which has significantly impacted fee income2.

Aggressive Recovery and Cost-Cutting Measures: In response to these pressures, Aberdeen University has implemented an aggressive financial recovery plan. To date, the university has managed to cut costs by approximately £18.5 million through measures that include early retirement, voluntary severance, and various operational efficiencies. However, further savings are likely necessary, with proposals on the table for additional voluntary job cuts worth around £10 million, aimed at bridging a predicted financial gap in upcoming fiscal years3.

External Factors Fuelling the Crisis: The downturn in international student recruitment—largely attributed to recent changes in UK immigration policies—has directly reduced a crucial revenue stream. Alongside this, prolonged cuts to government funding have compounded the financial issues, leaving the institution in a precarious position despite its recovery efforts.

Long-Term Outlook: While university management and its ruling court express confidence that Aberdeen can adjust to these challenges through further agile and effective actions, the financial accounts leave little doubt that the external pressures and internal cost-cutting measures create an uncertain future. The institution is therefore closely monitoring the situation and considering additional measures should the recovery plan fall short of addressing the broader financial deficit.

Robert Gordons University
Robert Gordon University (RGU) in Aberdeen is also facing significant financial challenges. The university has announced plans to address an £18 million budget shortfall, which includes opening a voluntary severance scheme targeting up to 220 job cuts. This follows earlier measures where 130 jobs were already cut.

The principal of RGU, Professor Steve Olivier, has described the situation as a "major existential threat" due to severe underfunding, including a 22% real-terms cut in teaching funding over the past decade. Staff at RGU have begun strike action over these redundancies, with further strikes planned2.

The financial pressures stem from a combination of factors, including underfunding, rising costs, and challenges in student recruitment. It's a tough time for the university and its community. What are your thoughts on how universities can navigate these challenges?

Glasgow Caledonian University
Glasgow Caledonian University (GCU) appears to be in a relatively stable financial position compared to some other Scottish universities. Recent reports indicate that GCU recorded an underlying surplus of £13.5 million in its latest accounts, which is slightly lower than the £14.5 million surplus from the previous year. While this suggests that GCU is managing its finances well, the broader challenges facing the higher education sector in Scotland—such as funding cuts, inflation, and reduced international student numbers—could still pose risks in the future.

University Of Highlands and Islands
The University of the Highlands and Islands (UHI) is facing financial challenges. Several of its partner colleges, such as UHI Moray, UHI Shetland, and UHI North, West and Hebrides, have been identified as being in "financial distress." These colleges have received over £8.3 million in loans and grants from the Scottish Funding Council to ensure their sustainability. Measures like voluntary severance schemes and workforce reductions have been implemented to address budget shortfalls.

Additionally, UHI has been undergoing restructuring to improve financial sustainability, which has included streamlining operations and reducing staff costs2. The financial pressures are part of broader challenges faced by the higher education sector in Scotland.