Former Dundee University principal Iain Gillespie boasted the institution was “blooming” in a statement accompanying accounts showing a £12m deficit.
The Courier has seen a leaked copy of draft financial accounts for the year to July 2024, which are yet to be made publicly available.
The accounts were issued as papers for a meeting of the university’s court last November but never published.
A note accompanying the accounts states they are “materially and substantively complete”.
They show declines in money raised from grants, tuition fees and research grants during the year, though an increase in donations saw a slight rise in income to £328.1m, from £325.7m the previous year.
Dundee University is expected to publish its accounts by April 30.
University was described as ‘blooming’ weeks from cash crisis
But costs also increased – including a rise of almost £10m on staff spend, the university’s largest expense.
The underlying deficit of £12.3m compares to an underlying surplus of £2.6m in 2022/23.
The university’s cash position fell by more than £40m during the year – from £74.4m to £32.4m.
A black hole of at least £35m has since been identified, with a recovery plan putting up to 700 people at risk of redundancy rejected by the government.
Despite the concerning financial picture, the university’s then principal, Professor Iain Gillespie, was bullish in his report.
He said: “The year covered in this annual report has been one of consolidation, achievement and continuing recovery from the challenges of the pandemic, and of an institution blooming in the face of considerable external headwinds.”
Within weeks of the draft being prepared bosses at the institution would realise they were on course to run out of cash in a matter of months.
The lack of foresight is likely to be among the issues probed by an external investigation. Prof Gillespie is also likely to be questioned on the matter when he appears before Holyrood’s education committee in the coming weeks.
What do Dundee University accounts show?
The draft accounts showed the following changes compared to the previous year:
- Total income increased by 0.7% to £328.1m, up from £325.7m
- Falls in Scottish Funding Council grants (down £700,000), tuition fees (down £2.1m) and research grants (down £4.8m).
- Income from international students, one of the “essential foundations of the university’s future financial sustainability”, reduced by £400,000
- Donations to the university more than doubled, from £3.5m to £8.2m.
- Income classed as ‘other’ also rose from £39m to £44.3m
- Money spent on staffing increased by £9.6m, from £174.5m to £184.1m. This accounts for more than 56% on the university spend. Staff numbers increased during the year by 6.8%.
- Operating expenses fell from £130.8m to £129.7m due to “strong cost control over the year and a reduction in costs relating to international student scholarships”.
- Capital expenditure of £43.4m was accounted for in the construction of the Tay Cities Deal capital projects, space refurbishments and investment in IT systems and equipment. This was the main reason for the university’s cash declining by £42m.
- The accounts show an operating surplus for the year of £73m – but this is only due to a positive pension adjustment of more than £80m.
Stripping out Tay Cities Deal income of more than £5m, another non-recurring item, means the underlying deficit is £12.3m.
Accounts claim Dundee University was ‘comparatively strong’
Notably the section “events after the reporting period” is not filled out in the draft accounts.
A report by independent auditor Ernst & Young within the accounts says it found no “uncertainties” that would cast doubt on the institution’s ability to “continue as a going concern for the period to 31 July 2026”.
Summarising the financial performance, the accounts state the university numbers were “comparatively strong compared to much of the sector”.
It adds: “Strong cost control mitigated the overall impact of this reduction but with an overall adverse impact resulting in a small operating deficit.”
Dundee University publishes its report and financial statements on a yearly basis, like other institutions.
Because of its status as a Royal Charter, it is not required to file annual accounts on Companies House. Instead, it displays them on its official website.
Executive salary increases
The accounts also reveal what senior figures were being paid at the end of the last financial year.
Prof Gillespie is listed as being paid between £300,000 and £309,000.
This was a £35,000 pay increase on the previous year.
A Dundee University spokesman said the institution was working with auditors to publish its annual report.
He added: “It was recognised at the November meeting of court that the draft annual report and financial statements needed to be reviewed and revised, in light of the significant worsening of the university’s financial position since the year end to 2023-24.
“This is recorded in the publicly available minute of the court meeting.”
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