Looking for answers to the crisis at Dundee University
Dr. Carlo Morelli, 17 January 2025. An edited version of this article was published on The Courier website
Visitors to Dundee University’s main teaching block cannot miss the portraits of all the University Principals who had the privilege of serving the University established in 1967. That is except for the last two. Prof Andrew Atherton was initially suspended from office and never returned. His tenure lasted from January to November 2019. He was succeeded by Prof Iain Gillespie, who stood down with immediate effect in December. To lose one Principal is unfortunate but to lose two … raises serious questions.
The University of Dundee faces a major financial crisis, such that its continued viability has been questioned. A £30m deficit for 2024-25 is now expected to lead to major job cuts and, probably, closure of courses. Senior staff have stated the University could close within two years if no cuts are made, and have anonymously criticised the University Executive Group (UEG, i.e., the university’s top level of management) for having ‘burnt the house down’.
Graeme Dey MSP, Minister for Higher Education in the Scottish Government, has stated that staff, through their trade unions, should be fully involved in any recovery plan from the start and that the Government body responsible for Higher Education, the Scottish Funding Council, is, ‘all over it’. Yet he has repeatedly refused to commit to ensure the university’s survival.
The Westminster and Sottish Governments hands are certainly all over this crisis, indeed they fashioned it. The reckless decision making of a weak and unaccountable UEG created the crisis but governments prepared the ground for it.
A university isn’t simply a place where teaching takes place. It develops today’s research, and the intellectual knowledge for tomorrow’s researchers. Research is expensive and requires subsidy from academic areas that can generate surpluses. One estimate of the additional cost of doing research (provided by the University) suggests that the £74m of research grants awarded in 2023-24 costs £97m to carry out. Universities therefore are fundamentally a mechanism for transferring surpluses, primarily from teaching into support for research. Both aspects of this mechanism are mutually dependent upon one another for the success of the institution as a whole.
Dundee University maintained this balance successfully for the first fifty years of its existence. There were industrial disputes over cuts to teaching previously, but none as a result of threatened bankruptcy. In recent years, this balance has been upset by new demands on the surpluses generated and the inability to fund the university’s research activities.
The trigger for the current crisis has been a fall in recruitment of both home and international students. 300 places for home students remained unfilled in September 2024, not due to lack of student interest, but rather because of the poor implementation of an untested new IT system, severely hampering the processing of applications. These problems persist today. Admissions staff have worked over Xmas to address backlogs. Dundee University, like other UK universities, banked on a never-ending supply of international students. Once this bubble burst, income went down as well. Falling international student fees probably account for £2m of the £12m expected deficit in 2023-24.
International student recruitment has been hit badly by the continued racist scapegoating of migrants coming to the UK. Westminster governments have used racism deliberately to court popularity and deflect society’s anger over a crisis in living standards, directing it towards vulnerable minority populations. Changes to immigration policy have made it more difficult for international students coming to the UK. Unsurprisingly, international students who are willing to pay tens of thousands of pounds for their education are not going to come to a country which portrays them as a burden. The truth is international students are integral to our UK Higher Education system and not just financially. Their migration to the UK brings real and lasting cultural, social and intellectual benefits.
However, while student income has fallen, it was UEG’s decision to divert that additional income from the previous growth in student numbers from activities required of a financially sustainable university into a series of unrelated investment areas.
In just two years from 2021-22 to 2022-23 the University’s budget for external contractors rose from just under £11m to over £31m. This included outsourcing of sections of the workforce which saw the £84,000 budget for external contractors on electrical work increase to a budget of £785,000. Still greater was the rise in General/Other contractor costs associated with the Tay Cities Deal, which saw the annual bill rise from £9.5m to £28.9m in two years.
The Tay Cities Deal is a consortium of Tayside organisations and the Scottish Government which has created the major financial crisis for the University. As mentioned above, it is not only responsible for the rise in external contractor costs to £31m in 2023-24 but it also requires the University to contribute a further £10.2m in 2024-25. In creating the Tay Cities Deal, the Scottish Government has off-loaded responsibility for regeneration projects onto Dundee University. Joining the consortium is one of the poor managerial decisions made at Dundee University. The Scottish Government is indeed ‘all over’ the University of Dundee and already knows the cause of the financial crisis.
In other areas of activity, the University has sought to avoid disclosing important details and the costs involved. For example, a subsidiary company of the University, University of Dundee Enterprises Ltd., was permitted to establish its own subsidiary company, a wholly foreign owned enterprise (WFOE), which operates in China. These arrangements mean that activity in China is not directly reported to the University’s governing body, University Court. This WFOE organisation is not a UK registered company. Yet, as a company owned by UoD Enterprises Ltd its losses are attributed to the University of Dundee. Worryingly, UoD Enterprises Ltd has failed to publish its 2024 financial accounts.
The Tay Cities Deal and the costs incurred in China are just two examples of an unaccountable management. The crisis at Dundee University is a warning to us all as to what can happen when highly paid managers act without adequate oversight, and without ‘checks and balances’. It is facilitated by the Scottish Government’s desire to devolve responsibility for regional regeneration onto local partners without the security of funding to meet the requirements of the agreement.
The Scottish Government needs to strengthen governance structures in higher education to ensure students, staff and wider stakeholders have genuine control over decision making. Transparency and accountability should be central to those structures. As any MSP could testify being elected to office for a fixed term is a powerful tool in ensuring transparency and accountability. Elections of senior managers and academic leaders, combined with pay controls, for example ensuring that university Principals do not earn more than the First Minister, are all part of a parcel of governance reform urgently needed in Scottish Higher Education.
The current fiasco at the University of Dundee demonstrates how damaging the current model is for our higher education system, and our society more widely. Universities play a hugely important social and economic role in our communities. They cannot be allowed to fail.