The University of Dundee has been told it cannot make any compulsory redundancies until it has a three-year recovery strategy in place as part of conditions placed on its bailout from the Scottish government.

Up to £40 million is being made available to rescue the beleaguered institution, after it emerged that it faced a £30 million black hole in its finances.

Owing to the “very significant amount of public funding” at stake, the Scottish Funding Council (SFC) is placing conditions on the money across five areas, according to a from its chair Cara Aitchison to Iain Mair, Dundee’s acting chair of court, published on 26 November.

The money should be used to help the institution develop a new three-year strategy that provides a “clear and evidenced route map to long-term financial sustainability”, the letter says, adding that this should be approved by June 2026.

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The strategy should “guide immediate decisions, to align immediate actions with future goals, and to ensure that short-term actions to make immediate savings do not risk undermining future recovery”, Aitchison’s letter adds.

Until such a strategy is in place, “there should be no new proposals for additional compulsory staff reductions”.

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Pointing out that the university has already cut about 250 jobs since it got into financial trouble, “making further staff cuts in the short term and in the absence of a strategic plan could risk undermining long-term sustainability and fail to use this pivotal moment as a means of rebuilding the culture, trust and confidence required to sustain the delivery of financial recovery”, the letter says.

The university will be able to carry out further voluntary redundancies as part of the plan but will not be able to use the funding to cover any severance payments or other costs associated with the job losses.

It should also “consider the timing of both voluntary and compulsory redundancies to minimise the impact on students”, according to the outlined by the SFC.

These conditions appear to represent a slight softening of the SFC’s position after earlier this year it said that future bailouts would be contingent on the university “restrict[ing] further job losses”, probably until a permanent leadership team was in place and a new strategic plan had been adopted after consultation with staff and students.

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Speaking to ����Vlog recently, Dundee’s interim vice-chancellor Nigel Seaton said that not being able to resize the university’s workforce would open up further risks to the university. 

Other conditions require the institution to produce a longer-term strategy by the end of July 2027 and be more transparent in the financial information it provides.

Dundee should also prioritise producing a “leadership and governance plan”, outlining how it intends to progress its search for a new permanent vice-chancellor and other members of its senior leadership team.

In a statement, Aitchison said the SFC “believes that the conditions of funding issued to the University of Dundee are reasonable, measured and justifiable and provide SFC with appropriate assurance for the provision of significant additional public funding”.

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“It is now for the university to consider the conditions. Following a period of engagement a formal offer of funding will be made at which point it will be for the university to decide whether to accept or reject.” 

A spokesperson for Dundee said that the conditions had been received and it will now be for the university’s court to consider them and make a response, which should happen by late December.

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tom.williams@timeshighereducation.com