Scottish Government announces 'unprecedented' bailout for Dundee University

The Scottish Government announced an “unprecedented” bailout for Dundee University on Tuesday afternoon.

The Scottish Government will give the university up to £40m over the next three financial years to help stabilise its finances.

Education secretary Jenny Gilruth said how the money is spent will be closely monitored.

“The use of this power is unprecedented and has been made necessary by the exceptional circumstances at the university”
Education secretary Jenny Gilruth

The bailout is in addition to the £22m that the Scottish Government previously provided in March to keep the university going when the financial crisis was first revealed.

The decision comes just days after a scathing review of the university’s financial crisis was published.

The investigation was commissioned by the Scottish Funding Council (SFC) after the university announced that hundreds of jobs could be lost due to a £35m blackhole.

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Watch: Scottish Government announce additional funding for Dundee University

Led by Professor Pamela Gillies, the review found serious concerns over governance and transparency at the highest levels of the university.

It found senior leaders at Dundee University breached ethics rules, ignored financial red flags, and operated in “isolation of facts”.

“This is a unique and unprecedented set of circumstances, which requires a unique and unprecedented response,” Gilruth said on Tuesday.

Gilruth said the legal process does allow ministers to “target a direct settlement to the University of Dundee”, and to place “specific conditions” on that funding in this “unprecedented set of circumstances”.

“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,” Gilruth said.

“The use of this power is unprecedented and has been made necessary by the exceptional circumstances at the university, as set out in the findings of the Gillies Report, which recount ‘poor financial judgement’ and ‘weak governance’.”

Gilruth added: “I can therefore confirm that the Scottish Government will provide funding in principle of up to £40 million over two academic years, or three financial years, via the Scottish Funding Council, to support the University of Dundee.

“This funding is subject to further due diligence prior to any expenditure occurring.”

Gilruth said Dundee University will need time to work through the implications of the Gillies review, but she said Ministers will “support that endeavour” via the SFC.

“A line must now be drawn under mistakes made by a collective few, and we must jointly, across this Chamber, endeavour to support Dundee University to rebuild, to thrive and once again, to flourish,” Gilruth concluded.

“The SFC will provide an update to the Education Children and Young People Committee on its associated next steps. Ministers will provide a further update to Parliament early in the new term.”