The Office of the Scottish Charity Regulator (OSCR) has launched an investigation into the governance of Dundee University, following the publication of a sharply critical independent review that led to several senior leaders resigning.
The report for the Scottish Funding Council (SFC), issued on 19 June, highlighted a series of failings that resulted in a “financial collapse” at the university, a registered charity, necessitating a £22m government bailout.
Author Pamela Gillies cited poor financial judgement, inadequate management and reporting, a lack of agility in responding to a fall in income and weak governance around financial accountability among the “main causal factors of failure” at the university.
“These were compounded by the top-down, hierarchical and reportedly over-confident style of leadership and management, a lack of transparency and clarity in respect of financial data, the promulgation of a positive narrative around financial matters and a culture in which challenge was actively discouraged,” Gillies wrote.
The university's principal, Shane O'Neill, and two other members of its governing bodies left their positions after the report was published.
University ‘set itself up for failure’
At the time of writing, Dundee University was yet to file its accounts – which were due on 30 April – for the last financial year, and plans to cut around 300 jobs as it seeks to address a shortfall of £35m.
The scale of its financial problems was first revealed to its court of governors in November 2024.
The SFC report found a host of failings had contributed to the crisis, which unfolded against a tough financial backdrop for universities.
Despite falling overseas student numbers and a resulting drop in revenue, the university did not cut expenditure and “set [itself] up for failure” by not taking action to address an £8m budgetary hole it had identified.
It also spent around £40m of cash, generated from selling off shares in a subsidiary business during the 2020-21 financial year, which was meant to have been ringfenced for its capital programme.
Governing bodies missed ‘multiple opportunities’
“The reasons the university failed to manage its cash prudently are founded in a lack of governance, ownership (of cash management and reporting) and transparency,” the report said.
It added that throughout the 2023-24 financial year and into the first quarter of the next one, the institution “did not have effective internal systems and controls over financial management”.
Nonetheless, governing bodies “should have been aware of the worsening financial situation as early as December 2023 and certainly no later than March 2024,” the review found. “There were multiple opportunities to establish the position.”
“The failure of the financial governance system was self-inflicted and experienced multiple times and at multiple levels,” it added. “This led to a failure in identifying the worsening situation and not responding early enough.”
OSCR: ‘Concerns remain over governance’
A statement issued by OSCR said the regulator had “reviewed the report published by the Scottish Funding Council, following the independent investigation led by Prof Gillies into the University of Dundee – and its findings indicate that concerns remain about the governance of this charity”.
“That’s why we are now opening an inquiry into this charity, so that we can better understand these matters of concern,” the OSCR added. “We look forward to working with the University and its trustees, past and present, to determine whether regulatory action is required.”
A spokesperson for Dundee University said: “We are aware of the investigation and we will comply fully with any requests from OSCR for information.”
