Dundee University had ‘overbearing leadership and lax financial controls'
An 'overbearing' principal, poor financial controls and a lack of transparency contributed to Dundee University's financial meltdown, a scathing report has concluded.
The results of the independent investigation carried out by Professor Pamela Gillies were published on Thursday by the Scottish Funding Council (SFC) and suggest that much of the harm which resulted in a £35 million deficit was self-inflicted.
Gillies was tasked with looking into the problems, which threatened to lead to hundreds of jobs losses.
The Scottish government has already provided a £22 million bailout to ensure the immediate future of the institution.
Gillies, who is a former principal of Glasgow Caledonian University, found that the University of Dundee had failed to adequately address issues around declining numbers of overseas students and did not take cost-saving action early enough, meaning it was 'set up to fail' in its 2024-25 financial year.
Professor Shane O'Neill, who took over as interim principal in December, resigned immediately after the report was published.
Tricia Bey, the acting chairwoman of the university court, and Carla Rossini, convener of the finance and policy committee, also departed with immediate effect.
Jenny Gilruth, the education secretary, said: 'It is evident from the findings that there are serious questions which must be answered by the University of Dundee's management team.
'This is obviously a difficult time for the university but I welcome the decisive action which has been taken with the changes in leadership. It is vital that we now move to a period of stability to ensure the institution can move forward and thrive into the future.'
O'Neill, previously the deputy vice-chancellor, and Professor Iain Gillespie, the former principal who left last December, along with other senior finance managers were described as not having 'a culture of openness' at all levels.
Gillespie's 'overbearing leadership style' was also highlighted as well as his dislike of 'awkward' questioning, while 'dissent or challenge was routinely shut down'.
Submissions made to the inquiry stated that Gillespie 'frequently demonstrated hubris, or excessive pride' in his role.
Financial controls were lacking in many areas with the university actually breaching its banking covenants, although that information was not properly conveyed to oversight committees.
Many investment decisions 'were not appropriately agreed against their effects on the University's sustainability'.
The report also called into question the 'credibility and accuracy' of the documents which were put forward for scrutiny by the university court.
It said: 'Information was generally presented in a manner which made it difficult to fully understand the true financial performance of the university.'
The 64-page document notes that poor oversight meant 'operational and investment decisions were made without awareness of the university's cash position'.
It also raised questions over how more than £40 million of cash was spent, having been raised from selling shares in the successful university spin-out company Exscientia, which uses artificial intelligence to aid drug discovery and development.
It was supposed to have been ringfenced for 'strategic development' but instead appears to have been used in the university's day-to-day cash spending
Alongside the poor financial governance, the cash problems were worsened by decisions to continue adding new members of staff instead of implementing a recruitment freeze. The total headcount peaked at more than 4,340 but had fallen slightly to about 4,100 by April this year.
Francesca Osowska, chief executive of the SFC, said: 'Given the seriousness of the situation, it was important that the investigation was conducted with rigour and transparency.
'The report has identified a range of issues that contributed to the financial challenges facing the university; however, it is quite clear that there have been failures in financial monitoring and reporting, and failures in governance.'
Michael Marra, a Labour MSP who used to work at the university, said: 'The report shows that the institution was failed catastrophically by a small group of executive leaders entirely out of their depth and cowed by a hubristic principal who brooked no dissent.
'Details of Iain Gillespie's leadership style are deeply troubling; sidelining, speaking over or publicly criticising women in the university who dared to speak up.
'There were also clear failures of governance, with inaccurate reports which masked the true financial picture, and public statements by the principal that were purposefully misleading.'
Miles Briggs, the Scottish Conservative MSP, said: 'This is a devastating report into the gross mismanagement that has existed for far too long at the University of Dundee.
'Senior figures were told what they had to do to get Dundee University into a sustainable position but they repeatedly failed to act, and covered-up the true state of its financial position.'
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