24-06-2025
- Business
- The Herald Scotland
Unprecedented £40 million bailout for Dundee University
It follows the publication of a damning report into the university's handling of its financial crisis.
The Gillies Report, published last week, led to the resignation of three senior staff members, including interim principal Professor Shane O'Neill.
It described the circumstances which led to the establishment needing a government bailout as "self-inflicted".
Ms Gilruth said the funding has been agreed "in principal" with the Scottish Funding Council, which normally issues cash independently.
But "specific conditions" will be placed on the funding, and it will only be released after a long-term recovery plan is put in place by the university.
Dundee University already received a £22 million bailout in February, meaning the Scottish Government has now provided £62 million for the institution this year.
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That bailout was part of a £25 million package made available to the SFC to help universities facing significant financial challenges.
"This is a unique and unprecedented set of circumstances which require a unique and unprecedented response,' Ms Gilruth said in a statement in Holyrood on Tuesday.
Dundee University is currently struggling to deal with a £35 million financial black hole, with the institution warning hundreds of job losses could be needed.
The scathing report into the institution's finances also criticised Professor Ian Gillespie, who resigned as principal in December.
It described him as having an "overbearing leadership style".
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As well as the resignation of the interim principal, the acting chair of court, Tricia Baym and chair of finance and policy Carla Rossini brought forward their own departures to quit with immediate effect.
Ms Gilruth added: "Where there has been the appearance of financial mismanagement at an institution, Scottish ministers are obliged to consider whether it is necessary or expedient to issue a direction to the SFC about the provision of financial support.
'Subject to the public value tests I have set out today, Scottish ministers consider it is both necessary and expedient for a direction to be issued to the SFC under Section 25 of the Further and Higher Education Scotland Act 2005.
'The use of this power is unprecedented and has been made necessary by the exceptional circumstances at the university.'
But she told MSPs the £40 million was not about "rewarding failure".
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Miles Briggs, education spokesman for the Scottish Tories, said: 'While the priority must be ensuring Dundee University gets on the road to recovery, it is hard to accept that we should just draw a line under the financial vandalism that went on for far too long.
'Those responsible for that gross mismanagement have rightly fallen on their sword but we must now see SNP ministers robustly scrutinise how the university will bring their finances into a sustainable position going forward.
'Staff and students remain deeply concerned about the precarious position the university finds itself in and will be worried that there appears to be no sign of a Plan B currently.
'There was clearly something rotten with the culture that was allowed to fester within Dundee University and that came from the very top.
'Too many of Scotland's universities are in an unsustainable position currently, yet we are still to see SNP ministers or university bosses address this crisis with the leadership that is required.'
