From life sciences to medical training via creative design, Dundee University has made its name as an internationally-respected institute for research and teaching.
But its hard-earned reputation is now under threat as a funding gap of up to £10 million means the prospect of cuts to crucial fields has been raised.
In a letter to staff, which has been leaked to The Courier, Professor Sir Pete Downes, the institute’s principal and vice-chancellor, reveals “a real threat to our financial sustainability”.
He said an estimated Scottish Government cut of 3.3% which could change when figures are confirmed in the coming days as well as a 2% rise in both pension and National Insurance contributions are likely to lead to “significant cost savings”.
Given the university’s budget only just broke even in the last financial year, the potential 6% reduction going forward is being seen as a massive blow.
Sir Pete wrote: “We have an imbalance in our research/teaching profile that needs to be corrected so that the costs of our research can be better matched against the income we can generate through teaching.
“The negative implications this has for our finances has brought us to a point where we have to fundamentally look at the sustainability of the university and consider the shape and size of the institution.
“We are doing too many things that have an adverse effect on our financial position, and we are not as efficient as we could be in the delivery of some of our research and teaching.”
Sir Pete said the university was “showing very positive results” bringing in students, particularly for post- graduate and overseas students, both of which generate income. But he confirmed such growth alone would not address the monetary shortfall.
The university court will be asked at its meeting next week to consider outline proposals to target a return to a surplus budget over the next three years.
Labour will today lead a debate at Holyrood in which they will call for the protection of education spending in real terms over the next five years.
Iain Gray, the party’s opportunity spokesman, said: “The First Minister pledged to make the education the driving and defining priority of her government. Instead we are seeing universities having to make swingeing cuts because of the SNP budget.
“This cuts off opportunities for our young people and short changes the future of our country and our economy.”
A Scottish Government spokeswoman hit back at criticism.
She said: “We have invested over £4 billion in the higher education sector over the last four years.
“Notwithstanding a very tough budget round, we will continue to invest over £1bn in our higher education institutions in 2016-17, ensuring that all of our institutions receive financial support to enable them to deliver high-quality teaching, world-class research and knowledge exchange.”
A Dundee University spokesman declined to comment further on Sir Pete’s letter, adding sending it round all staff proved the institute was being transparent about its finances.