Education, Children and Young People Committee [Draft]

Meeting date: Wednesday, October 29, 2025

Official Report 933KB pdf

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University of Dundee

Welcome back. Agenda item 2 is on the University of Dundee. I welcome Michael Marra and Maggie Chapman, who have joined us for this item. Ross Greer has sent his apologies for this part of the meeting.

I welcome Professor Nigel Seaton, the interim principal and vice chancellor, and Lee Hamill, the interim finance director, at the University of Dundee.

We will go straight to questions. Professor Seaton, where are we with the recovery plan for the University of Dundee?

The two principal elements of the recovery plan are the reorganisation of the university on the academic and professional services side to become more effective and more efficient. We have been planning the reorganisation for many months and have just begun to work on it, which will facilitate the reduction of costs. We have already made big steps in the reduction of costs. Our voluntary severance scheme was broadly successful and we have disposed of some assets that we do not require, which has brought in some money. In the coming months, we will begin our plan for further reductions in costs. That is partly contingent on having created the new organisational structure.

Do you feel that you are on target, or are you behind schedule?

We are on target for where we wanted to be with what we had planned over the past few months. If we take a longer view of the history of the university since the crisis became evident in November, we would all have wished that we had been able to move more quickly. I recognise that there was a period during which we did not move quite as quickly as we ought to have done. However, over the past few months, I think that we are more or less on track with what we wanted to do.

Really? Plans have been produced by your predecessors and by you and the current board, but they have not been taken forward through the Scottish Funding Council, the Government or whoever takes those decisions. The committee has debated whether those plans have been rejected or not. Is it your view that the previous plans that were presented have been rejected?

It is clear that the recovery plan that was presented in the spring was unacceptable. The plan that we presented to the Funding Council in early August was a wide-ranging plan that included sections on the student experience; learning and teaching; research; the estate; and strategy, including the strategy that was behind that plan. Much of it has not been subject to discussion with the Funding Council, but a letter from the Funding Council of 18 August advised that there were two problematic elements that we should not proceed with: the reorganisation of the university and the reduction of costs over the coming year. In that sense, if I was forced to get off the fence, I would say that it was rejected. However, most of the plan was not discussed.

Was it not discussed by the Funding Council?

Yes.

Sorry—are you saying that it was not discussed by the Funding Council?

Yes. Obviously, it was discussed by us as we were putting the plan together. Indeed, many elements of the plan were part of a document that was produced for the Funding Council in order to secure the funding. It was a varied document that contained many elements that had previously existed and elements that were in the process of being planned when we started writing it. The focus of the letter from the Funding Council and further discussions with it was primarily about the reorganisation and the plans for the reduction of operating costs.

To go back to my earlier point about whether you are on schedule or not, if you submitted a plan in August and it has not been allowed to go forward because, by your own admission, it has been rejected by the Funding Council, surely you cannot possibly be on schedule. You have had to come up with another plan and we are not there yet—we do not have that.

The Funding Council has not impeded our work on the two elements that I mentioned, which are the reorganisation of the university to become more efficient and effective and to improve leadership, and the work on cost reduction. We have carried on with that. It is important to emphasise that senior and junior colleagues across the university spent a lot of time on the plan and it was useful for us and, I hope, for the Funding Council to bring it all together. However, many elements already existed, particularly on learning, teaching and research.

Work on the reorganisation began before we submitted the plan and it continued afterwards. The submission of the plan was a punctuation mark, if you like, in our interaction with the Funding Council. We did not delay doing anything. It might seem as though there was not that much activity, but there was activity in preparation for the change that we have just started, which is the creation of faculties from the academic schools and our reorganisation of professional services.

We will get on to that later, because we received an email from the student union last night and significant concerns have been expressed at the university about it.

Is all the work being done internally? Are you using your own internal skills and expertise or are you seeking outside advice?

I feel that we have a very capable senior team and there are many capable people in the university. We are primarily doing the work ourselves, but we are taking advice when we need it. Personally, I have a broad network of contacts and advisers. We are getting advice at a corporate level from Universities Scotland, for example, and we get advice when we need it from the Universities and Colleges Employers Association, but we are not contracting with external advisers to do the work.

Did you not think that that was an option? Why did you not take that option?

Generally, our approach is that, if we have the ability, we should do it ourselves.

However, do you have that ability given that, by your own admission, the plan that you submitted in August was rejected by the Funding Council? Does that not indicate that you do not have the ability to produce the plans to the level that is required by the Funding Council, the Scottish Government and others?

10:15  

I emphasise that the plan was submitted to the Funding Council and not to the Scottish Government, although we had some discussion with the Scottish Government. We never had any hint that the Funding Council thought that the plan was not at the required level, although we felt that it did not like some of the measures that it presented. We never heard any criticism about its quality.

There must be, though, because we still do not have a plan.

With your permission, it will perhaps help if I say a little about what happened after the plan was submitted. The letter of 18 August from the SFC was responded to by the university—the letter was not directed to me, but to Ian Mair, the chair of court. Having had two conversations with the university court, he responded as the chair, reflecting the court’s conversation, on 15 September.

Since then, the conversations that we have had with the Funding Council have been about helping it to understand what the university intends to do and how it works, which is very necessary. The objective is to put the Funding Council in a position in which it can give us the conditions of grant and confirm the funding. There has also been a lot of analysis of the university’s cash balance and cash flow.

We were required to produce the plan, so we did so. It led to the letter, which told us that there were some things outlined in the plan that we should not do. That letter was responded to, and we have had barely any conversations with the Funding Council about the plan since then. The process has really been about the SFC gaining an understanding of how the university operates and what is intended, and preparing—we hope—to confirm funding.

Minutes before you arrived today, we had the cabinet secretary here, and she said that she has not received the information that she expected about the conditions for the funding. The Funding Council has clearly rejected things. Therefore, even in the light of what you have described as having happened after that, I am still looking at the situation from the outside, as an MSP—along with the public who are watching and the media, including The Courier, which has done great coverage of the issue—and wondering where we are. I have had no sense from you today about what the next steps will be so that the public, the staff, the students and the university family can think, “Yes—there is now a plan that we can get behind to see the University of Dundee prosper after a very difficult period.”

There is a lot in that question. I should perhaps say that, because I sit in the university, I have a partial view of the situation. The other important actors are the SFC and the Scottish Government.

We have had a number of workshops with the Funding Council, which have, from our point of view, been very successful. The Funding Council seems to have been pleased with what it learned from them, and I understand that we are approaching the point at which conditions of grant might be decided by the Funding Council. We would, of course, be required to meet the conditions of grant, but we do not write them; the Funding Council does that. I think that it is close to completing them and to agreeing the funding and its timing. I realise that the situation will look different from different angles, but that is how we see it.

We have a lot to get through this morning, so I will move on. I want to take you back to Mr Hamill’s predecessor, Chris Reilly. What happened there? When his appointment was confirmed, he was praised by the university as someone with a wealth of experience. I have looked at his background and he has turned around quite substantial businesses here in the UK and across the world. He came in and lasted, in effect, one day. He had been in doing some research up to that point, but he left after his first full day.

As a point of correction, he left at the beginning of his second week. I am afraid that I cannot say any more about that because we are currently engaged with a legal matter, but I might be able to later.

Can you tell me why you, as the new vice-chancellor and principal, did not do more to keep him in his post? If he said to you that he was unhappy about things to the extent that he had to leave within days of taking up the role, why did you not do more to keep him?

I appreciate that that is a very reasonable question to ask, but I am afraid that I cannot answer it at the moment, for the reason that I have given.

Have you been given legal advice to that effect?

I have been given internal legal advice from our legal team within the university, yes.

I have quite a lot of information on this that I am quite happy to put into the public domain. I cannot imagine that what you say here will compromise anything, and it just looks suspicious if you will not answer. I am not saying that it is suspicious; I am just talking about what it might look like from the outside.

I am, of course, not trying to look suspicious. I am sorry if it looks suspicious, but I am afraid that I can only repeat my previous point. I do not feel that I can say anything about it.

Not a single thing? Is that what you are telling us? Can I continue to ask questions, and you can decide?

Yes. It might be productive, but I do not feel that I can answer those questions.

Well, let us try. We will see where we get to.

Did Mr Reilly send you a lengthy email with concerns about the university and the way forward? You then suggested that he was raising significant issues and that you would require an additional hour’s meeting with him the next day. At the start of that one-hour meeting, he resigned, having had a brief conversation with you. Is that a correct timeframe?

I do not feel that I can answer that question, because it impinges on aspects that I do not feel that I can comment on.

Did Mr Reilly suggest that you use the services of PwC when producing the recovery plan?

I can answer that, because it is a matter of record. His predecessor produced a paper for court—I am not sure that he commented on it personally; forgive me, but I cannot remember—in which it was proposed that we contract out a large part, and particularly the financial analysis of the recovery plan, to PwC. I know that he supported it.

Who rejected that? Was it you personally? You told us—

It was the university court that decided—

Was it on your advice?

I spoke against it, but it was spoken against by other people, too.

Just to be clear, you were against appointing PwC, despite the recommendation from Helen Simpson, the interim finance director at the time, which was supported by the incoming interim finance director. You felt that your view was better informed than their view.

I felt that the university senior team and finance colleagues had the capability to do it. I was in favour of internal people doing it, so I supported that. As it turned out, we did have the capability to do it.

I personally disagree, because we are still at a stage where we do not know where we are, but others might take a different view.

You are saying that, internally, people supported that view. Your interim finance director, who came across very well when she appeared before us, and who—this is rare in our considerations of the University of Dundee—impressed the committee, was telling you to appoint an external company, PwC, to assist you, the board and the university in coming up with a recovery plan. That was supported by your incoming interim finance director, whom you and the university welcomed. However, you took a different approach. Why were those two very senior people who are involved in the finances of the university wrong, and why were you right?

I did not say that they were wrong. I expect them to say what they think, and they did say what they thought. I am bound by other considerations as well as what senior colleagues advise. I am bound by the effective use of money, much of which is public money, and I feel that there is benefit in an internal team doing something if they have the capability to do it. I felt that the internal team had the capability to do it, and I was right. We had the capability to do it.

I can offer further evidence on that. We have had further work carried out by Deloitte, which has been contracted by the Scottish Government. It has analysed the financial content, particularly of the university recovery plan, and found it to be very sound. It is a matter of record that our internal team was able to do this without spending what would have been hundreds of thousands of pounds of money that the university really does not have.

I am therefore perfectly happy with that decision. I do not feel that I am obliged to follow recommendations that are made by colleagues. I will say what I think, and what I thought was that we had the capability to do this ourselves; that there was merit in doing it ourselves, because of the ownership of our team in doing it; and that it would save money, which was scarce. Those were my reasons. I am not obliged to follow the recommendations of colleagues.

At the board meeting at which that was determined, did you withdraw the paper from the interim finance director from the agenda?

No.

A paper was presented by Helen Simpson to the board meeting on 23 June. I am asking a specific question about a paper, not an oral update. Was a paper presented, as on the agenda, on 23 June?

Are you referring to the paper that was about contracting out part of the work?

No. It was a financial update.

That paper was not withdrawn.

It was not on the agenda.

Forgive me—I do not remember the content of the agenda that was written on the page, but there was no finance paper provided to court for that meeting.

Was there a finance update that was on the agenda, which only materialised because Helen Simpson ensured that she could put across her points of view?

Forgive me. At that meeting? No, there was not. Sometimes agendas are changed when papers are not provided. I cannot remember what was on the page at that meeting, but there was no paper submitted by Helen Simpson on finance. I understand it not to be the paper proposing getting PwC to do work on the plan. No finance paper was provided to the court through the—

If it was not a paper, was there due to be a finance update from the interim finance director—as was the normal process for court meetings—which was then removed from the agenda? Did Helen Simpson still insist on giving an update?

I beg your pardon. Do you mean an oral update?

She had to give an oral update in the end, but was there an agenda item that suggested, prior to the meeting, that Helen Simpson would do that, which did not then happen on the agenda, although she insisted on giving an oral update?

I do not recall. Forgive me, but I am still slightly lost. You are asking whether there was a paper in existence that was withdrawn—

If it was a paper. You are saying that papers would not be normal, but was there an agenda item that was then removed?

No—it was normal that there would have been a paper, but there was not one.

Okay. Why was there not a normal paper on the finance of the university when you were discussing a recovery plan?

I do not know that. I am not involved in preparing the agenda for court, as university principal. That is a matter for the chair of court and the secretariat that supports him. I forget the precise day, but I think that I was in my first or second day as principal. Even if I had been there for months, I would still not have produced the agenda. That is a matter for court. I can give you my recollection of what happened, but the preparation of the agenda is a matter for court and the secretariat, and not for me.

However, you know that such an update is a regular agenda item. Did you raise concerns that it was not on the agenda?

It was the first court meeting that I had chaired as principal. There was a suggestion that a paper had been produced and somehow suppressed. We investigated that and we could not find any evidence of it. It is perhaps obvious that there should be—

We are now getting to where I was a couple of minutes ago. I think that my earlier questions were clear, but I apologise if they were not. You are now saying that you knew what I spoke about a few minutes ago—that a finance update was normally presented to court, but that did not happen on this occasion. You investigated—

The university court had very frequent meetings at a certain point, and I would not be able to say whether there was normally such an update. I know that such updates have been produced before. I do not have any particular insights as to what happened on this occasion as I did not organise the agenda and I had been in post for only a day or two. I repeat that it is primarily a matter for the court.

Yes, but you would also repeat that the matter was thoroughly investigated. You said that.

A statement was made that this paper had been submitted and that it had been suppressed. A complaint was made. We had an extensive investigation at the university, which established that it had not been submitted through the normal channels. An extensive investigation was made of emails and other possible routes through which it could have been submitted, and no evidence was ever found.

It was submitted to the governance secretary. It was not just about financial analysis; it included corporate restructuring.

Do you mean submitted for that meeting?

Yes.

We looked into that, and we found that it was not.

Just to be clear, as I am getting conflicting information, you are saying that no paper of that nature—a financial analysis that addressed corporate restructuring—was submitted to the governance secretary.

10:30  

If it is the paper that I am thinking of. My recollection of that meeting is reasonably good. I cannot remember the exact layout of the agenda, but a statement was made later that a paper of that nature was submitted and then suppressed. We checked carefully and diligently and found that it was not. There might be some other paper—we might be slightly at cross purposes, as we do not have the paper in front of us. However, if I understand your question correctly, which I think that I do, we checked diligently and carefully and found that that paper had not been submitted.

That is very interesting, because it is the polar opposite of what I am being told, so there is an issue there.

That was Helen Simpson’s final court meeting. In my personal view, she had done outstanding work. She saw the problems before anyone else. When she sat in the witness’s chair next to Mr Hamill she told us that, at the end of day 1, she saw the problems at Dundee university that others internally—and, I have to say, externally, including the likes of the SFC—had missed for months.

If that was her final meeting, surely you, as day 1 vice-chancellor and principal, would have expected to hear from her and see a report from her.

I do not want this to sound overly focused on me, but I came in at very short notice to a university in the deepest crisis of any British university at least since the second world war, which we are now dealing with. It is a very deep crisis, and I trusted my chair, the court members and the secretariat supporting the court to deal with court business. I am not trying to suggest that I should be completely divorced from court business, but that is governance. I am a leader and that is governance. I was in—I think—my second day as principal, having taken over at very short notice, and I just did not spend a lot of time trying to think about how the chair, with the support of the secretariat, should organise the agenda. I had other things to think about.

You have far more experience in the sector than I have, or ever will have, and I respect that. Nonetheless, given everything that you knew about Dundee university when you went into that job, I would have thought that the court was an area to which you would have wanted to pay considerable attention, because it had dropped the ball so many times.

Absolutely—I agree with every word of that. The story of the University of Dundee is one of leadership failure and ineffective governance oversight—I agree absolutely with that, but I was focusing on other things. There is clearly a need to reform court, but there is also a need for me to give space to the chair of court and to the people on it for them to do what they feel is right. I am supporting that, and all the people in the secretariat who are supporting court report ultimately to me, so it is a shared responsibility. However, I did not, at that time, concern myself about the detail of a court agenda on what I think was my second day in office.

I have a couple of final points. The meeting that we have just been discussing at length was held on 23 June; it was your first court meeting as principal and vice-chancellor. How quickly should minutes be published for meetings such as that?

Minutes should be made available when they are confirmed, which should normally be at the next meeting of that committee, so it would be after the next court meeting. There are sometimes extraordinary meetings at which normal business is not done and the minutes might not be confirmed. In general, however, they should be confirmed at the next meeting and they should be available after that.

Do you see the minutes before they are published and agreed by the court?

No, I do not. I do not have any special locus in the minutes—it is a matter for court. I am—

I am not saying that you have—

I am a court member, as principal, but the court approves the minutes.

I am not saying that you have any special locus, but do you ask to see the minutes?

No, I do not.

You do not. Do you think that it is right that the minutes of that important meeting on 23 June were not published until earlier this month?

That is probably the normal rhythm for a routine court meeting. I think that what probably happened—again, I do not recall exactly—is that it is quite common in times of difficulty to have extra court meetings. At one time, before I joined, there were meetings every week and then every two weeks. I think that it is quite common, with extraordinary meetings, for the minutes to be approved at the next regular meeting. That might be what has happened here, but I cannot confirm that. I can get that information from our governance team and report it as soon as I can after the meeting, if that is of interest to the committee.

It would be of interest to me. However, I am just asking whether you think that that is acceptable. In my view, at the moment, there are no routine meetings of the University of Dundee court. There is nothing routine about Dundee university at the moment. Therefore, the onus is on the university to demonstrate openness and transparency. Not having, until October, publicly available minutes for a meeting that happened in June does not meet that criterion.

I take the point, but, as I am not sighted on quite what happened with the minutes, I do not feel that I can say more. However, I take the general point about transparency, and I am happy to provide more information later, after investigation.

I found some interesting points in the minutes. I now know that more than 2,500 students attended the welcome week sports fair to see the facilities and browse the sports that are on offer—I got that from the minutes.

What I did not get from them was an update on the cash position, because the university claims the exemptions of sections 30 and 33(1)(b) of the Freedom of Information (Scotland) Act 2002, and you have reserved that information. I got no update on the financial statements, because you reserved that information. I got no update on a number of other issues, including the financial recovery plan procurement, student numbers and the Blueprint Recruitment Solutions system, and I got no information on the SFC indicative funding. All those things are reserved business in those public minutes.

You are happy to tell us about 2,500 students looking at the sports facilities, but you are not happy to make any of that information public. Should the University of Dundee not be far more transparent than that at the moment?

I am personally committed to transparency. I will not give you a list of the things that I have done to improve transparency, because it is not relevant to your question, but I am personally committed to that. I have improved the transparency of the senate minutes and how they relate to court minutes. I chair senate; I do not chair the court. I am not trying to pass the buck, but there is a necessary distance between me, as the chief executive of a charity, and the governing body. I do not determine how the court interacts with the Freedom of Information (Scotland) Act 2002. I understand your point and, as I said, I am committed to transparency and openness, and that is really a matter for the court, not me.

However, as the principal and vice-chancellor, will you commit to discuss with the chair of the court the issue of its meetings being more transparent?

I am happy to. I know that the chair of court will wish to hear—indirectly, as he is not here—from the committee, and I am happy to talk to him about that.

I want to get to other members, because I have taken up too much time, but first I want to ask you a question, Mr Hamill. When you came into this job, what did you think about the very quick departure of your predecessor? Did that worry you?

As Professor Seaton said, that matter is with lawyers at the moment—

Have you received the same legal advice not to comment on the matter?

I have received internal legal advice, and it is something that I am not able to comment on at this time.

Okay. Were you excited about joining the University of Dundee, given its financial challenges?

I think that “excited” is probably the wrong word. I was very committed to doing all that I can to help the University of Dundee to come through this very difficult time, recognising the huge impact that this situation has had on staff, students, the community and all the stakeholders that are involved with the university. I was very mindful of the seriousness of the situation and extremely committed to doing all that I can to help.

I would like to talk about the claims from some that the level of job losses is too severe and too high. You seem to be using two indicators. The first is the staff cost share of total expenditure, which you want to bring closer to the norm for universities in Scotland. The second is the EBITDA—earnings before interest, taxes, depreciation and amortisation—rates, which you have been saying for a long time are too low and which you want to take up to 10 per cent, but which the UCU Dundee branch says is too severe. Can you set out why you think that the figures of 52 per cent and 10 per cent are right and the UCU is incorrect in its claims?

If I may, I will make a couple of comments for context, before I address those particular points. The objective of reducing the cost—perhaps to state the obvious—is to reach the position where the cost of operating the university is less than the income. That is the fundamental thing.

The cost can be cut in several ways. There are three basic headings: capital investment; operational costs, such as heating, lighting, insurance, laboratory supplies and so on; and staff costs. Of those, you cannot cut capital investment, because it is already non-existent: we have cut all capital expenditure, except for a very small amount in health and safety; we have cut almost all that we can, although you can always imagine cutting a bit more. Similarly, there is almost nothing to cut with regard to operating expenditure. Therefore, regrettably—I say that particularly because, as Mr Hamill said, our staff group has had a rough time—we are left looking at staff costs.

To be clear, my view is that the staff of the university have been the victims of poor leadership and inadequate governance oversight. They did not cause this situation, but they are going to help us get out of it. We can only get out of it with them, but some of the jobs that we have now will not be affordable in the future. It is a very difficult and regrettable situation.

On the point about the metrics that we are using, we are not a slave to metrics about the performance of different universities. However, it is true that, as a percentage of total income, the staff costs in a university like ours are typically in the low 50s, whereas ours are more than 60 per cent. That supports our view that the staff costs will have to be reduced. We are not doctrinaire in terms of aiming for a percentage; we are doctrinaire about getting the university to run well. That is the principle that we will use to guide us.

On the issue of cash generation, I will pass to Mr Hamill. First, though, I will make a general comment. You can take different views about the estate—that is, the physical infrastructure and the digital infrastructure, which are also important for capital investment. However, if you look at our campus you can see that it has, broadly speaking, been underinvested in for many years—you can see that in the accounts and you can also see it by walking around the campus. I am not suggesting that we are going to solve that radically overnight. There was no capital investment last year and, no matter how vigorously we lead the university’s recovery, it is inevitable that there will be no capital investment next year or the year after that. We are making up for a deficit in investment in the university’s infrastructure. We feel that a figure of 10 per cent is very reasonable—Mr Hamill can comment on that in a moment. You could argue that it is not high enough or that it is a bit too high. However, it has got to be a significant figure to allow us to regenerate our cash reserves and then to be in a position to borrow from banks.

Earlier, we talked about the recovery plan. I point out that we were given two instructions by the Funding Council. One was to have a plan that leads the university to financial stability and resilience; and the other was to get ourselves to a position where we can borrow money from banks. If we cannot generate cash, we cannot borrow money from banks. There is a potential to borrow substantial sums from a bank or from banks if our financial position is secure. Those are two aspects to do with cash generation.

I will now hand over to Mr Hamill, who can give you more concrete details.

I will just give a bit of background and then go through the points in detail. The first thing that I will expand on is the very significant structural deficit that we are currently facing. The university forecasts that, this financial year, it will lose something in the order of £30 million—that is, we will spend £30 million more than we take in. That is just unsustainable. Without further action to reduce our cost base—indeed, without further public money—that situation will go forward in perpetuity. Next financial year, we forecast that the deficit will be slightly less, at around £14 million. As I said, the situation is not sustainable and will limit the choices that the university has.

Secondly, I have also heard the arguments about whether the 10 per cent level of EBITDA is appropriate or acceptable. To put it in context, that is roughly one month’s working capital for the university. It represents about £30 million of free cash that will be generated each year—roughly what it costs to run the university for a month, as monthly running costs are between £25 million and £30 million. To give a bit of context around that, our pay run alone each month is about £15 million. That £25 million to £30 million of free cash that we would generate with that 10 per cent level of EBITDA gives us many more choices. It gives us a buffer of security that would protect the university from any adverse shocks that might hit it—perhaps a macroeconomic shock or a black swan event of the type that we have seen over the past five or six years.

When the financial crisis happened this time last year, the university’s cash reserves were so depleted that it could not withstand it and had to ask for emergency funding. We would be protected in that sense, at least for a medium-sized economic shock.

10:45  

More importantly, if we can rebuild our cash balances over a period of one, two, three or five years—or even 10 years—we will begin to be able to make decisions to reinvest in the things that matter to staff, students and our stakeholders. At the minute, we have no money to reinvest. Our capital investment is simply limited to repairs of the most basic type, health and safety and compliance.

We have two major buildings that are almost completely out of action, because of issues with reinforced autoclaved aerated concrete, and we do not have the money to remediate the RAAC. The most significant of those buildings is the main Dundee University Students Association building—the students union—which is about three quarters out of action. We also have some very large engineering labs—the only double-height-ceiling engineering labs in the university—that are completely unusable because they are not safe. If you were to walk around our campus you would see that there is a legacy of underinvestment in the fabric of the estate. Although there are some good examples of buildings that we have been able to develop over the past number of years, a lot of work needs to be done on the estate to get it up to standard.

The third issue, which I think is an important one—and which Professor Seaton mentioned—is that, at that level of 10 per cent EBITDA, we become an attractive proposition for commercial lenders. At the minute, we are not able to borrow. I have engaged with a number of commercial banks in my time with the university, and they all tell me the same thing: they need to see evidence of financial sustainability; they need to see that we are clearly at a level of surplus each year, as defined by operating surplus or as defined by EBITDA; and we should be able to demonstrate that over two academic recruitment cycles, which means the September intake that we have just completed and probably the next such intake as well.

We have a strong balance sheet. We do not have any debt. We have a small amount of debt with the Funding Council, but we have no commercial loans at the minute, having cancelled a revolving credit facility in August. We have net assets of around £300 million. I feel that, with a 10 per cent EBITDA that we were delivering on a regular basis, we would be a much more attractive lending proposition to the credit committee of a bank. What would we lend for? We would lend to reinvest back into the university—back into all those things that I have mentioned.

Should the rate be 10 per cent? Should it be 11 per cent? Should it be 9 or 8 per cent? There is a judgment question there. For the reasons that I have explained, we set a 10 per cent rate. However, as with our university recovery plan that we submitted in August, it will take us three years to get to that point. In this financial year we will not be at that level. In the next financial year it will be slightly better, but it will take until the 2027-28 financial year before we would be at that level.

I appreciate that that is quite a long answer to your question, Mr Rennie, but I hope that that provides important context for the committee.

It has been very helpful to have that set that out.

Is there a tension, then, between what the banks are telling you is required and what the SFC or the Government said about the bits of the initial recovery plan that they were not satisfied with? Is there a tension between those two groups?

Obviously, there have been separate conversations—that goes without saying.

In my discussions with the SFC, and indeed with Government officials, where I have explained what I have explained to you, that has been well understood. Of course, every week I speak a number of times to the financial team at the SFC, who are qualified accountants, and they understand those matters. When it comes to unlocking commercial lending, they understand that no bank will go forward with unsecured lending, or even secured lending, without a few basic things in place. First, we need to be able to evidence that we are financially sustainable, which we would do through the delivery of sustained surplus and sustained EBITDA. Secondly, we would be able to demonstrate that our tuition intakes and our main sources of income are steady, and that we are delivering what we said we would in that respect. I think that that is well understood.

As for the tension around where the recovery plan got to at the end of August, Professor Seaton has already spoken to that.

I will turn to life sciences, but, before I do, what is the Government getting for its £62 million?

May I respond to that? As we know from the various interactions of the organisations involved, it is a tricky business to manage, but the Government is getting something very simple: the continued survival, and then thriving, of the University of Dundee.

I emphasise that I am proud to be the principal of the University of Dundee; it is a wonderful university. It has obviously been badly led and badly governed, but it is doing great things for its students, and it is an absolute cornerstone of life in the city of Dundee.

I will give you a figure for what the university contributes. We had an analysis done and, apart from the staff that the university employs directly, it is estimated that it supports another 9,000 jobs across Scotland, mostly in Tayside, and contributes about £1 billion a year in gross value added. It is an absolute cornerstone of civic life and society in the city of Dundee. That is what is being bought for the money. It is deeply regrettable that we should have to ask for that money, and we will be very grateful to get it, but that is what is being paid for: the survival, and then thriving, of a great university.

The Government originally thought that it was getting a limitation of the job losses to 300, but the figure is now above that. Your predecessor, Shane O’Neill, indicated that that was the agreement, but that seemed to change. Can you clear up the confusion around what the Government’s expectation was for that money and why there was—if there was—a misunderstanding?

I can do my best to do that. When I came to the university, I was briefly in another role as temporary provost on the academic side of the university. In that role, I came in at the very tail end of those interactions.

I can see why what you describe was understood. I think that there was an incomplete interaction between the Scottish Government and the SFC on the one hand and the university on the other. I do not think that the university leadership team—the then university leadership team, I should say—ever believed that it would be possible to run the university without having further job losses. That would have assumed an absolutely unfeasible and unimaginable turnaround in income for the university.

That was not said—I have looked over the correspondence and, indeed, the notes that were taken of various meetings. We never said that we would expect there to be further redundancies. We never said that there would not be. We left open the idea, without saying that we did not think it feasible that the situation might turn around and that, by generating more income, we might remove the need for any other job losses. I do not have deep insights as to why things went in that direction, and I do not want to say that it was necessarily simply a matter of the university not having communicated clearly enough.

I have looked at all the correspondence, and I would say that there is a surprisingly sparse set of correspondence about that. I think that assumptions were made and some points were not made sufficiently clearly. I do not think that I have cleared up the confusion, but I have given you an account of how the confusion arose.

Do you think the Government accepts what you say on that now, with regard to the fact that the number of job losses needs to go beyond 300?

I think so.

Okay. So—

It is clearly a very uncomfortable thing, for reasons that I understand, but I think that the Government understands that. There are two approaches to the situation, and only two. One is to reduce the costs—I think that income will rise, but it will never rise to the level at which it would sustain the current level of expenditure, at least not in the foreseeable future. That is what I believe to be true, and that is the basis of our strategy. The other view is to say, “Well, let’s not cut the costs because we think that the income will come in and that won’t be necessary.” I believe that not to be a reliable assumption.

That is where we are. Additional income would have to come primarily from international students, but the evidence for that is not there, and I think that the Scottish Government appreciates and understands that.

That is quite a change from what we were told before, which was that it was believed that a new source of income was going to come within the next two to three years that would prevent the need to go further with job losses. However, you are now saying that you think that the Government now accepts that, for the £62 million, the figure will be above 300, which is what it originally expected.

Yes—I think that that is true, with the caveat that I am not sure that the university leadership team ever thought that it would be possible to do it without reducing levels of employment in the university further. I do not think that it ever thought that that was likely to happen. I think that that was the unexplored, and slightly unsaid, element from the spring and the early summer.

Convener, do you want to come in?

What are you basing that on? What if we go out of today’s meeting and ask a question in the chamber, or journalists ask the Scottish Government whether it agrees with Professor Seaton and accepts that the number of job losses will have to be higher? Have you had that from Government ministers or civil servants?

We heard it in our discussions with the Scottish Funding Council. It might be more accurate to say that the Scottish Funding Council accepts that there will have to be further reductions in the workforce.

On the figure of 300, it might be worth emphasising that the hope and the target for the voluntary severance scheme was 300 full-time equivalent staff, but it did not quite reach that—it was 245 in the end.

I think that the situation is understood. The financial forecasts clearly show that we either reduce the level of expenditure, which will have to come primarily from staffing, or we need to be in the unlikely position where we have an unfeasible amount of additional money, or we decide to remain a ward of the state for the foreseeable future. I do not think that the latter is acceptable to the Scottish Government and it is not a viable future for the university.

The cabinet secretary sat in that seat a little over an hour ago and said that she was personally heavily involved with this. She has a local connection, because she is a Fife MSP. Have you had direct discussions with the cabinet secretary or the former or new Minister for Higher and Further Education and their officials about there being more than 300 job losses at Dundee university?

I have not spoken to the cabinet secretary since sometime in the middle of August—I will have to check the date—and I have not spoken to the new Minister for Higher and Further Education since he has been in post.

That is quite revealing. The impression that I was given by the cabinet secretary is that she is all over this, but if she has not spoken to you since August and you have not had any discussions with the new minister, that is concerning.

I will finish my point before I go back to Mr Rennie. If you believe that the Government accepts that the number of job losses at Dundee university will be above 300, how far above 300 will it be? What is the threshold at which the Government will say no?

That is a matter for the Government. As I said earlier, we hope to receive the conditions of grant and confirmation of funding. I am confident that we will get that support, and it is generous of the Scottish Government to support the future of the university, but it will have to make its own decision about what it wishes to support.

I am still unclear, and people who are watching this and are worried about their jobs will be unclear about the level of discussion that you are having with the Scottish Funding Council, the Government and university about the number of job losses that we could see at Dundee university.

May I have one more go?

Please.

The recovery plan, which contained a number for expected job losses, was produced at a certain point in time as information that we were required to produce for the Funding Council. Some things in the plan are secure, because they are to do with strategy and approach. One of those is the objective to become sustainable and to maintain the broad range of teaching and research activities that we have now. The other is the point that we will have to reduce costs primarily through staffing.

There were figures for staffing in the plan, but I do not want to produce a latest figure for staffing, because we have to do further work that will be based on the latest figures for forecast income, which are a bit different, although not radically. It is also the case that, when we are looking at job losses, we have to look at what the jobs are, the salary levels and the terms. We are going to do further work on that.

We are not in a position to say how many jobs we think will be lost, but it is important to be as clear as we can be. To go back to the figures that were given in the recovery plan, the financial situation of the university is similar, the number of jobs that were lost through the voluntary severance scheme is also similar and the underlying strategy remains the same. Therefore, although we do not know how many jobs will be lost, the number will clearly have to be substantial.

The strain is being felt, though, is it not? We hear reports about architecture students who are concerned about whether they will be able to achieve their qualification, because of a lack of resources; we hear staff talking about losses of administrative support putting intolerable pressure on them; and we hear about cleaning services being cut back significantly. How are you measuring how the changes are being felt and whether they are, therefore, critical to the operation of the successful bits of the university and to the success of the university? I get a lot of complaints from people that you do not understand how those departments work and, that, therefore, you do not understand when the changes have gone too far.

11:00  

I will make two comments. First, I meet colleagues at least every month at what we call a town-hall meeting, where we talk about anything, and I have said repeatedly to them that reductions in staffing should not lead to anybody having an impossible job. If people think that they cannot do their job to the standard that is required by their manager and in the time available, they should let their manager know and, if they would like to, they should tell me. It is absolutely central to what we are doing that people should not be asked to do the impossible. Everybody should have the right to a reasonable job—that is very clear to me.

In more concrete terms, we have a process for dealing with that. During the operation of the voluntary severance scheme, we were very careful to ensure that, as far as possible, people did not leave the jobs that were essential. From time to time, in the normal course of events, people leave, and we have a process for making appointments to vacant jobs. We make many appointments to vacant jobs; we try not to, because the university is in great financial difficulty but, when we feel that we have to, we do. You mentioned the example of architecture, and we have made appointments in architecture, although we did not do that as quickly as we should have done.

We have quite a detailed process in which the operational unit—in that case, it is an academic post, so it would be the academic school—will make a proposal, which we interrogate quite carefully, because every pound that we spend is money that, fundamentally, we do not have. We spend it if we have to spend it, but we try hard not to. If somebody has said that it is a pity that the process does not allow us to react quickly, I think that that is right, and we are now reviewing the process to make it move more quickly. However, the process is in place, and that is what we are using to manage the situation.

So you recognise that you have been too slow in making appointments to make the situation tolerable.

We may have been too slow. We have had a process that has been too slow and cumbersome for people to use, and we are reviewing it. However, I do not want to give the impression that those appointments could have been made three months ago and that there is a three-month process that is holding things up. It is not like that; it is a process that ought to take only a couple of weeks. We are trying to make the process more efficient and quicker. However, part of the issue is the difficulty of running a university in which there is a need both to have a substantial reduction in costs and, nevertheless, to make key appointments. I am not saying that we get it right all the time, but that is the principle. None of the students will be unable to complete their programme of study because of staffing losses—we are committed to that.

I can feel the pain of those who are getting in contact with me. When you do this job, you can sometimes differentiate—you know when people really, really feel things and when they are at their wits’ end, and that is what I am getting from people. So, you understand that.

I absolutely understand that. There is an uncomfortable timing question with regard to the planned reorganisation of the university, of which we are going through the early stages. One of the reasons that that is being done is to accommodate the voluntary severance departures that we have already had. The eight academic schools have their own support services, and we recognise that those have become quite fragile in some cases. Therefore, I am not surprised by that. It is regrettable, obviously—I regret it greatly—but I understand that there will be some cases such as that.

Given the level of cross-subsidy that is required, is the school of life sciences too big for an institution as small as Dundee university?

No, I do not think that it is. It is important to say that the school of life sciences is a wonderful world-leading operation. There is always cross-subsidy involved in research activities, and there is a bigger cross-subsidy for activities that are more expensive, including science and engineering activities. All British universities lose money on research—it is a structural question. We recover about 69 per cent of the cost of doing research across the university, which is a very normal figure for a university. Life sciences recover 81 per cent, which is an outstanding outcome for an operation that is substantially funded by charities. Charities are the least generous in the funding that they give, in that they do not cover much of the indirect costs of research. The school of life sciences is a high-performing and financially efficient operation, which is what makes the cross-subsidy, although it still exists, manageable.

Good morning. I will go back to questions that the convener and Willie Rennie touched on with regard to the voluntary redundancy scheme. How many folk applied for the scheme?

We had 428 individual applications, which is the equivalent of 367 full-time equivalent staff.

How many of those applications were accepted?

Of the 428 individual applications, 290 individual applications were accepted, which is the equivalent of 245 FTE posts.

So that is—I am sorry; I am trying to do my maths quickly. How many applications did you reject?

Applications from 108 individuals were rejected. In FTE terms, that is 92 and a fraction.

So, of the total amount of people who have been made redundant by the university, how many did not apply for the voluntary redundancy scheme?

It was a purely voluntary severance scheme, so there were no redundancy pools. Nobody has been made redundant, certainly in recent periods in the university—it has simply been a voluntary severance scheme.

It was voluntary only.

It was voluntary only. I will say, as a caveat, that all universities have fixed-term appointments for research staff, and they leave at the end of those contracts. That is formally redundancy, but that happens all the time.

Yes, I would not class a fixed-term contract coming to an end as a redundancy.

Technically, it is a redundancy, but I just wanted to mention that.

Therefore, the number of jobs that have gone is 428—no, that was the number of people. You said that that was three hundred and something posts, Mr Hamill—I am sorry, I cannot remember the number.

Through the purely voluntary severance scheme, there were 245 FTE redundancies.

With regard to the staff who are left, what are you doing to ensure that their workloads are not unbearable and that they can still carry out their duties and jobs in a proper manner?

I mentioned this earlier but, to be more direct, we have given instructions to all managers at all levels to have regard to that, to ensure that everybody has a job that is doable, and, if they have difficulties, to escalate the matter up the management chain. Indeed, that happens; it often leads to a request for appointments to be made, and we make appointments where we judge that to be necessary.

How do you ensure that that actually happens? The instruction might go out, but sometimes—I am not trying to say that you are alone in this—that instruction might not be adhered to, to the letter. How do you ensure that no one is put under undue stress and has too great a workload?

We work with the management team to try to ensure that that does not happen but, in an organisation in which people are behaving in a human way—sometimes, they do not like to complain and, sometimes, people are busy and do not perhaps attend to things in the way that they would wish to—there might be some people who are labouring under loads and feeling that perhaps they ought not to complain. The university is in difficulty, so that situation is imaginable, but I can only repeat that we are doing what we can through the management line.

I am very open in my conversations with staff. I say on many occasions that I am happy to speak to staff and I often speak to them if they have concerns. I have what we call a town-hall meeting with staff every month and about 1,000 people participate out of a university of 3,000 staff—1,000 out of 3,000 people is a lot. People are busy doing other things and some people might not want to hear from me, but that is quite a high level of participation. I always emphasise the need for people to have a manageable job and tell them that if they do not have a manageable job, they should tell their manager and if they do not feel they are getting anywhere, or even if they feel that they are getting somewhere, they can tell me, which people sometimes do.

We received an email yesterday saying that 500 jobs have gone from the university since this time last year, either through job freezes, redundancies or voluntarily. Do you agree with that figure, or would you say that it is not factually correct?

It is not factually correct. The actual figure is 275 in net terms.

Did you say 275?

Yes, 275, which takes into account the fact that some posts are regarded as essential and are filled. A caveat or footnote to that is that, of the people who have taken voluntary severance, some left at the end of last month but some did not leave if it was thought suitable for them to carry on in order to hand over or to help with the transition. So there are some people who we know will leave because they have taken a voluntary severance package, but who have not quite left.

I should perhaps also have said that some folk will have resigned to go on to other jobs. Does the figure include them?

That figure is for everything, in net terms, including people who have left and others who have been appointed.

You are saying 275.

That is the correct figure.

That is the total number of jobs or people.

That is the net flow of people, taking into account that some people will leave and that a smaller number of people will be appointed. As I said, we try to avoid that, because of the financial situation, but we sometimes appoint people to essential jobs. The overall effect of people leaving, for whatever reason, and of some people coming, leads to an overall difference of 275, not of 500 or so.

I will leave it there, but I might have more questions later.

Good morning—I checked the time and it is still morning.

Thank you for responding to the questions so far. I was going to ask about the number of redundancies, but we have covered a fair bit of that. Suffice it to say that people who work in the community in Dundee, including in the university, are deeply worried and stressed. Staff and people in the community have told us that they feel that things are in a managed decline or that the university is on a bit of a suicide mission. They are asking how on earth things can continue with such a reduction in staff. I know—or hope—that you recognise the gravity of that language and I wanted to put that to you.

It has been put to us that the way in which things are happening and the scale of the job losses means that this is a managed decline and not a recovery. What is your response to that?

I recognise everything that you say about the stress and about staff reactions. When I first came into the university, which was actually for a discussion with the previous principal before I came into my earlier interim role, the university was clearly traumatised and I could see that in people’s faces.

That is still the case. We have just completed a listening exercise in which we asked to hear about people’s experiences and the result is a difficult and harrowing read that shows the impact on individuals. I recognise all of that.

We are confident that we can operate the university with a reduced level of staffing. As I said earlier, we are not overly focused on metrics and are not going to aim for a certain percentage of staff expenditure out of the total income, or anything like that. We know that other universities that are like ours, with a similar size, similar sorts of subjects and doing similar research, can operate effectively on the kind of income that we have and that they do so by having fewer staff. We are working our way through quite how to do that, but I am confident that we can.

We are not on a suicide mission. We will return the university to financial health and will continue to do great things for our staff and students. Of course, the staff were badly treated over the previous period. They have been the victims of what has happened, as I said earlier, but we are doing what we can to support them. We are a great university in our research contribution and in the way that we support students, which we will continue to do.

11:15  

A point was made about managed decline. I do not want to talk about the higher education sector in general, but the funding situation is relevant. We have already talked about research being cross-subsidised with income that is received from teaching: the fund from the Scottish Government for Scottish students or students that are resident in Scotland, international student fees and fees from other parts of the UK. Most of our students are Scottish and the funding that we get from the Scottish Government for teaching has dropped in real terms by nearly 40 per cent since 2014. That has mostly, but not always, been gradual, but that has an effect. We need to invest more in our future, but our ability to do that has been constrained. We are a substantially publicly-funded university with a strong sense of public mission. The drop in funding has an effect on what can be done.

The point is that the Scottish university sector in general is not in robust health; we see that around the place and we are not isolated from that. I do not think that Dundee will feel like a university that is in decline, but I think that when we get out of this situation, it will feel like a university that is quite financially constrained, if the public funding situation continues.

I appreciate that. You will know that committee members are aware of and share concerns about the funding model and are concerned that universities are facing serious financial concerns. I acknowledge that and I recognise that that is part of it.

In response to my question, you said that other universities are managing to deliver services efficiently and that things are okay with fewer staff. For some of the restructuring, including the realignment of professional services, what equality impact assessment did you do in order to determine the broader context and impact of some of the decisions?

The equality impact assessments are done at the right time, which is when there is something concrete to assess. We do not assess based on the idea that the university should be reorganised to be more efficient, as that is not concrete enough. However, a consultation has just begun with the trade unions on the integration of professional services. That will primarily affect certain roles in what are now the schools but will become the faculties. We carried out an equality impact assessment on that, and we also did an equality impact assessment of the voluntary severance scheme. We do those things when there is enough concrete information available.

I appreciate that, however, there is little that is more concrete than people losing their jobs. Obviously, it is important that people understand whether there is an equalities angle. When consultations take place, including with the trade unions about some decisions, that kind of information seems pretty concrete and material to their decision making, is it not?

Yes.

So, when is the appropriate time to do those assessments? Why are they not done during the consultation process, rather than after the fact?

I am happy to go back and check and provide information if what I have said is not completely accurate. My understanding is that the impact assessments are done at the relevant time. In other words, if there is a consultation with the trade unions, assessments will be done during the consultation period.

On the changes that you have made to student services, it has been suggested that the restructuring has been done with no consultation, which is concerning, given the number of people who are involved in it and particularly given its equality impact. What is your response to that?

We have not carried out a restructuring of student services at the moment.

At all? That is not what we have been told.

“Restructuring” can mean different things in different circumstances. There has been no organisational change, or at least no major organisational change, to do with professional services in general.

What about student services?

There has been some realignment of reporting lines, which has been integrated with the provision of library services. I am not on top of all the detail of that. There has been a change of reporting line and there has not been a reduction in staff, except that, across the university, we have accepted some cases of voluntary severance.

We have heard that more than 200 cases have been accepted, so I imagine that some of those would have been in student support. However, we have not carried out a restructuring, except for a change in line of reporting in student services. There has been no further restructuring that I am aware of.

The other thing that has been put to us was that the decision to restructure the university into faculties was taken without the agreement of the senate and without discussion and agreement with the campus trade unions and student association representatives. Is that a fair representation of what happened?

Yes, it is, but it is the responsibility of the university court to decide on organisational changes and of the executive group, which I lead, to propose them. We had three separate discussions at the senate, and extensive consultation with senators. We changed the proposal after consultation with the senate. I discussed it at several town hall meetings. The unions were informed.

The senate is the academic governing body, but the senior governing body is the corporate governing body, which is court, and court decides that.

I should say that all this began in March, well before I came to the university, but in my time, we had a discussion with the senate and I asked for its views on the change. I was clear that the senate was not being asked to agree to it, because it is not for the senate but for the court to agree it, and the court did approve it.

I will come back to that in a second. You also said that trade unions were told. Should there not be engagement with trade unions, as opposed to giving them instructions or telling them to do something? Surely there should be more proactive engagement.

We engage with the trade unions routinely, and we engaged with them on this. Perhaps “engaged” would be a better word than “told”.

I emphasise that the creation of the faculties was not a matter for formal consultation, because it was a wide organisational change to create a more suitable academic structure, to get better academic synergy and to improve the representation of senior academic leaders at the university’s executive group, which it will do.

When it became clear—which it did later, but not at the time—that we thought that a small number of jobs would be at risk, we began a consultation on that.

Do you not think that, in order to make the changes to the academic structure that you have just described, you need to speak to the academics and some of the staff? In doing that through the trade unions, you might have perhaps gathered some perspectives that you had not thought about.

There was extensive discussion at the senate. It can be done differently in different universities, but in our university, senators are elected by school. The senators from those schools went back and consulted their colleagues. A member of the executive group talked to colleagues in the schools. There was a lot of discussion at several of the town halls that I led. There were abundant opportunities over many months for people to say what they thought about it.

We consulted on the idea of creating the faculties, and then later, having settled on the idea of creating them and deciding to do it, we consulted extensively on the question of how to implement the change and get advice through implementation. Indeed, we are still consulting on questions of implementation. We have a questionnaire going out to colleagues that invites them to give their thoughts on how we can best do it, and asks them about any risks they see and whether, although it looks like they will be in such and such a faculty, they would feel happy in another faculty. What about their research group? Where should that sit?

There is extensive consultation. I return to the point that you started with: it was not a matter for the university senate to decide. The university leadership team is charged with the efficient and effective running of the university under the guidance of court, and that is how we handled the decision.

It has also been put to us that, when that decision was discussed at the senate, the conclusion from every school ranged from—I am quoting what has been shared—“sceptical” to “hostile” to the idea.

I was not working at the university when those first discussions were taking place. I am not sure which meeting that would refer to, but my impression from my chairing—I accept that, as a chair, you might not have the deepest insight into what everybody is thinking at that time—was that there were varied viewpoints, but there was quite a lot of support for it.

We asked for views to shape the decision and now to shape the implementation of it. We did not have a vote at the senate about whether we should do it.

Government officials put it to us that the role of the recovery plan was not just to make the numbers add up. They also specifically said that the plan should have buy-in from the university community, including staff and students. Given the concerns that I have raised with you and the concerns that we have had raised with us by students, staff, trade unions and others, do you think that you have that buy-in?

We have buy-in to elements of it. I refer to my earlier comment about how the plan was produced. Some elements of the plan had been in place for some time, such as on student learning and research, and those strategies had been consulted on. We have already discussed the consultation that is taking place and will continue to take place in different ways on the reorganisation. There will be consultation on reduction of the workforce when the time comes. We do not have concrete plans for that.

The recovery plan that we were required by the Funding Council to submit is still a good indication of our strategy, and it was an indication of how we saw things then. We will be doing further work on that, and we will have extensive consultation with the trade unions when we come to that.

I was thinking about this before I came to the meeting. There are some aspects that we have not consulted on and do not have plans to consult on—property disposal is one aspect, and disposal of intellectual property is another. Indeed, the strategy is one of those aspects, because the strategy of reducing costs in order to make ourselves sustainable was required by the SFC in producing the plan.

As I said, we do not think that delaying and hoping for lots more income to arrive is desirable. Except for one or two things, I think that almost everything in the plan has been consulted on—in some cases, some time ago—is being consulted on or will be consulted on.

Thank you for setting that out. It has been presented to us is that there is some disquiet, particularly about the processes, the consultation and the engagement mechanisms, which is part of what the Gillies report picked up in terms of lines of communication. I am not hearing a huge amount of, “I am prepared to talk”, “I want to hear from” and “I would like to engage”. Can you provide any reassurance on the record, for anyone who is concerned about the lack of engagement, that you are open to good ideas and engagement, and that, in particular, you value the role that trade unions and the staff in your institution have in this process?

I am very happy to do that. I am pleased to be asked that, actually. I imagine that we will talk more about the Gillies report later on. It was very stark about what the failures were, and a big element was lack of openness and transparency. I will not speak at great length about the past, but the university has clearly had a culture of not being open about what was going on. I think that I can demonstrate in what I have done so far that I am committed to being more open. I have been open in communication with the staff. I have had monthly town-hall meetings. Most universities might have a couple a year, but I have had them every month. Mr Hamill has given a presentation on university finances, which he will repeat probably a couple more times this academic year.

I mentioned the listening exercise. We are about to begin a consultation on a vision for the university, which will be a preliminary to the creation of a new strategic plan, which will be ultimately completed by the new leadership team. We have fortnightly trade union meetings, including frequent updates on the finances. We are told by the trade unions that they would like more information. We will provide anything to the trade unions that they ask for, and we will provide anything to the staff that they ask for, with the usual exceptions of anything that might improperly refer to a person or to commercially sensitive things, but otherwise we will. I think that we have been very open. I hope that the change of gear in my leadership is clear, but I am open to other suggestions about how we should interact and engage with colleagues.

11:30  

I am also eager to engage with—and I do engage with—local MSPs, some of whom are here at this meeting. We have a meeting scheduled for early next month at the request of one of the MSPs. I will go along to talk to the trade unions and the MSPs together about the future of the university—I am very happy to do that. I am not saying that we always get it right, but my objective is openness, and I am open to suggestions to do better in the future.

Thank you; that is much appreciated.

Thanks for all your input so far. I will ask a question to Mr Hamill to start with. Where are we with audited accounts? I have looked on the website and I did not see anything after July 2023.

I will begin by discussing the 2023-24 accounts, which are for the year ending 31 July 2024. As the committee will be aware, those accounts were not completed, signed or filed because of the financial crisis. We have been working closely with our independent external auditors. We have targeted December/January—that is, December 2025 to January 2026—to complete that process.

However, there is an important set of caveats that I would like to give the committee. Clearly, for the independent auditors to be able to provide their audit opinion, they need to be able to assess whether the university is a going concern. As we sit here, without the additional sums of money from the Scottish Funding Council—namely, the additional £20 million this academic year and a further £20 million next academic year—and without the steps to reduce cost in the university recovery plan, it is not likely that the independent external auditor will be able to make that assessment.

As Professor Seaton has said, we are awaiting the conditions of grant from the Funding Council that would essentially unlock those additional sums of money for us for the next two years. It is our intention to proceed with the significant cost savings that we have outlined in the recovery plan so that the university can be financially sustainable and our independent auditors will be in a position to assess going concern and, ultimately, give that assessment.

Could they not just say that it is not a going concern and get the accounts out in public?

There would be a very significant risk with doing that. If we were to be formally assessed as not a going concern by an independent auditor, they would qualify the accounts quite significantly. That would significantly restrict our ability to enter into contracts for goods and services to run the university—

Does everybody not already know that you cannot survive without public support? We know it, and the students and staff all know it. What is the problem with printing that?

As I said, were we to wish to contract with any suppliers for any goods or services to run the university, our research funders would take issue with that, and charitable donors would have issues with it—

Surely, they know that already.

You are right, but having it formally assessed is a different matter. All that I can say is that that would be a significant risk for the institution to take and I would not advise it.

Okay. We are a bit uncertain about the 2024 accounts. What about the 2025 accounts?

The audit work for 2024-25 is under way. That financial year ended on 31 July 2025. Working with our independent external auditors, we have targeted the end of March and the start of April 2026 to conclude that process. The same caveat applies in relation to the going concern assessment, but that would simply follow on from the work that will happen at the end of this year.

That is helpful; thank you. What about management accounts? I take it that they are being produced monthly. Who gets to see those? Can we see them?

The management accounts are produced monthly, as you would expect, and are shared internally with university committees, all the way up to the committee of court. They go to the finance and policy committee, the audit and risk committee and, indeed, to the university court. We also share them regularly with the trade unions and, at the moment, with any other party who wants to see them. We share them with the Funding Council and I have shared them with certain commercial partners and other university stakeholders and would see no reason not to share them with the committee if you wish to receive them.

I do not know what the convener thinks, but I would quite like to see anything that we can have. That would be great. I would like to see quite a lot, including any draft accounts for 2024 or 2025—I am more interested in the accounts than some of my colleagues are.

You mentioned the audit and risk committee and the finance and policy committee. Do they meet more often nowadays because you have had financial problems?

That is right. As I understand it, the audit and risk committee has met monthly since March. I would need to check the exact date, but we can write to you with that specific detail. It has certainly met monthly during my time at the university. Unfortunately, the finance and policy committee has not had a chair until recently, so its October meeting was the first since, I think, June. I can check that precise date and get back to you in writing.

It has been suggested that, under the previous regime, financial information did not go to court members or to those committees far enough in advance for people to consider it and to ask questions. Has that changed?

Certainly during my time, and for all the committees that I have been to, we have issued financial updates and information in a timely way. We can always do better and the earlier that we give that to committees the better.

For example, we get our papers five days before the committee meets. Is that similar at the university?

We do our best to do that. I would have to check the specifics but, broadly speaking, we are aware of the need to provide information—particularly financial information that might require extra scrutiny—as far in advance as possible.

Fair enough. That is helpful.

This might be a question for Professor Seaton. Some of my colleagues have asked whether there is enough consultation, but there is an incredibly lengthy process under way compared with what you would find in the private sector, and a huge amount of consultation and negotiation is taking place. In the private sector, someone would come in, make decisions and make people redundant. In asking this question I am not suggesting that I support that approach, but why are universities so slow? Mr Hamill, you were at Edinburgh university previously. It seemed to jump more quickly towards redundancies, saving itself from getting into a big problem. Does everything take such a long time because you are so dependent on the SFC?

There are several factors, one of which is that universities are very complex. We are a medium-sized business with a turnover of £300 million. Universities are complex for their economic size. That is because they run a wide range of programmes and have complex support services, all of which slows things down a bit. We also hold ourselves to high standards of consultation and process, which is a bit different to some other areas of the economy.

I will try not to make my answer too long, but I will make a general comment about universities. Some of the changes that a university might make to particular subject areas for example are quite difficult to reverse, so there is a tendency to avoid making those changes unless one is absolutely certain about doing so. In our situation, we are not clear about the future scope of the university so we are aiming to maintain all of our activities, which is perhaps different to what would happen in the private sector.

I wanted to say this at some point: we have mentioned the shock and trauma for colleagues who have been affected. There is, if not trauma, a wider sense of shock around, and a feeling that it took a while to work out quite how to deal with the situation. The same probably applies to the Scottish Government and the Scottish Funding Council, too, as they try to find their way through an unfamiliar situation.

There is, perhaps, a distinction to be made between the formal authority and the moral authority. As the university is an autonomous institution, how we manage staffing is a matter for us, but in a situation in which we clearly required support—indeed, support from the community as well as from the Scottish Government—it took us some time to work out how to best address it. We might not be quite up to the speed of movement in the private sector, but I think that we have momentum now, and we are dealing with it.

Thank you.

I do not want to be too personal about this, but you are both in interim positions. Can you tell us anything about why that is the case? Does neither of you want to be permanently appointed, or is it felt that the two of you are there to rescue things and then somebody else will come in to take things forward?

This might be one of those questions that we should both answer, but I will begin.

We have talked about points of difference between other parts of the economy and universities, but that is a point of similarity. There is a crisis, so there is an urgent need to get somebody in post. To people who have not worked in universities, this might seem like an odd thing to say, but it takes nearly a year to appoint a university principal. It is a complex process that involves senate and court. In our case, we have an acting chair of court, and the process is constrained by the Higher Education Governance (Scotland) Act 2016. We have to appoint a chair of court, and it is good practice to do that before we appoint a principal.

There is, in part, a sense of urgency. At one time, almost everyone in the senior team was interim, but things are now changing quite a lot. The three vice-principals with responsibility for functional areas—that is, research, teaching and learning and so on—are all in permanent contracts, and, in the reorganisation, we will be appointing four more vice-principals on permanent contracts. We are also now in the process of recruiting a human resources director and a university secretary on permanent contracts.

We are in transition, but I am pretty sure that I will be the last to go, because it takes a long time to appoint a university principal. I think that the earliest date by which a principal can be appointed, taking into account the need to appoint—by which I mean, elect—a chair of court, is probably early autumn next year. I will probably be the last man standing of the interims.

We certainly need a bit of stability, because there has been a lot of change. Mr Hamill, do you want to comment?

Thank you for the question. All I would say is that, at the minute, I am fully committed to doing all that I can to help Dundee university recover. That is my absolute focus, and I do not think that having “interim” in front of my title makes a difference to that mission. That is what I am here to do, and I am very pleased to be working with Professor Seaton and the senior team to achieve that.

Finally, assuming that you get an agreement with the SFC, are you confident that you will not be coming back to ask for more money?

Yes.

Okay.

That was quite an interesting answer.

Going back to a couple of points that were raised in John Mason’s questioning, I note that you said that a permanent chair is required before you advertise for a principal, but then you said that that was good practice. Is it not required?

No, it is not required.

Surely in exceptional circumstances such as those with Dundee, and given how long all this will take—as we on this committee understand, and as you have explained—you get on with the job of advertising and starting to recruit. My issue is that, if you get your recovery plan through, you might be the last man standing of the interim team, but you will be going; there is an end in sight. The future of Dundee university will be moulded by Nigel Seaton in his interim role, but it will then be handed over to someone else. Surely we want to get that someone else in so that they can mould the future themselves.

That point has been discussed on several occasions in the university. We began the process. I should admit that what I probably said the first time was not right, because a permanent chair is not required. I think that it is good practice, but it is not required.

We have been in the process of appointing—electing—a chair of court since late May. We are required to advertise the post and then have an election. For an election to take place, you must have two candidates. When candidates withdrew from the process, we found that we did not have two, so we are going round again. We have had exactly this discussion, and the arguments are exactly as you have put them.

11:45  

A long time ago, I was an unsuccessful candidate for a job as a university vice-chancellor. During that appointment process, there was a transition between chairs, so that arrangement can work. It could be argued, as you are doing, that, in a university organisation that is under stress, we should move quickly. However, there is also an argument that we should have continuity of leadership of the university court. At the moment, we expect to run an election in early November. If we do that, we will get a chair of court in post well before Christmas, and then we can begin the process of making the appointment of the new principal. We are already in contact with search agencies, and some preliminary work is being done in that regard. I accept that there is a very good argument that our approach was not right and that we should have done exactly what you are describing. It is a finely balanced argument, but we are where we are. However, you make a good point.

The other point that Mr Mason raised with Mr Hamill concerned the university’s committees. Are the court and the committees working effectively?

I do not attend court as a member; I sometimes come to court in relation to financial matters. I can speak about the audit and risk committee and the finance and policy committee, because I attend those. The audit and risk committee runs monthly, and has met in August, September and October, and the finance and policy committee—

I am not that interested in the dates. If we had spoken to your predecessors—not your immediate predecessors, but others—two years ago, they would have said, “We have an audit and risk committee, a finance and policy committee and we have the court, and everything is fine.” However, what we found out from the Gillies report and other investigations is that they might have met, but they were not doing their job. I am trying to understand whether they are doing their job, rather than whether they are meeting and have papers.

Yes—

Yes, they are?

I am giving the dates to give the context of the meetings that I have been at. There have been three meetings so far of the audit and risk committee and one of the finance and policy committee. Based on that sample size, the agendas and the focus on the very serious finance matters at hand for the university, I can say that, in my opinion, they are doing their job. There is scrutiny of these very serious finance matters and the financial information, and some of the questions that your committee has asked today have been asked by those committees. Therefore, I would answer yes to your question.

Why, then, do we have a finance committee of an institution that is in financial distress that is not meeting because it does not have a chair?

I will respond to that. The Gillies report pointed out many problems with governance, and those are being addressed. I would be happy to talk a bit more about that if asked to do so.

One of the challenges that we have had is that the membership of the university court has been depleted. We have just appointed six more lay members—that is to say, members from outside the university—and we are in the process of electing a chair. However, up to now, we had a depleted population in the court and it was not possible to find somebody who was willing to be chair of the finance and policy committee. It is a great pity, but it is—

In those committees—which are crucial, and which have failed previously—is there no acting chair role or deputy role? If I got knocked down by a bus on my way here today, Jackie Dunbar would have very admirably stepped in as deputy convener—she might have wanted to do that many times. Why, if the finance and policy committee is so important, can it not even meet? I find that astonishing.

I will not dodge the question, but I emphasise that that is a matter for court, not for me. However, I will give you my opinion. Those committees are preparatory committees for court. What is important is that the court’s business is done. The court’s business includes the business of the committees. What has happened in the meantime is that all the business that would have gone to the finance and policy committee has been taken directly to court. I do not have any doubt that the business that should be being handled by the finance and policy committee is being done in what one could say is an inefficient way, because the reason for the existence of those court committees is that they have a specialist focus on certain areas of work, and the court does not have to do everything. However, as I see it from my perspective as principal, all the work that would be done by the finance and policy committee is being done by the university’s governance structure—it is being done directly by court. That is, of course, not the way that it should be, but in governance terms it seems to me that it is an acceptable way of doing it.

I take a completely different view, because, first, having looked at your minutes, I cannot tell what is going on, because you reserve all that information. Secondly, I am still quite concerned that finance reports were withdrawn, but I do not want to go over that again.

On the court, the cabinet secretary said earlier that she has concerns about members and so on. Did the interim chair of the court ask to come along to the meeting today? Did you think that that might have been quite useful? You have deflected a lot of matters on to the court, because you speak as vice-chancellor and principal. I was clear in my invitation to you that you could bring along whoever you needed and wanted with you. Why bring only an interim finance director and not the interim chair of the court?

We did not have any prescription about the detail of the discussion, and I judged that Mr Hamill would be the right person to bring. I could have decided to invite the chair of the court, but I did not.

Did he ask to be considered?

He did not. I mentioned to him that we had been invited and that I had asked Mr Hamill to accompany me, and he said that he thought that that was the right thing to do. It was not suggested by the clerk that I should—

No, no—I do not think that that is on us. We asked you on a wide-ranging—

As I see it, it is a simple thing: I was asked who I wished to bring, and I brought Mr Hamill. I could have asked for other people to come, but I did not.

Do you accept that quite a lot of today’s discussion has been about the court?

As it turns out, that has been the case. I am sure that, if he were asked to come on a separate occasion, Mr Mair would be happy to come, and would give all the answers to your questions separately from me. I apologise if it was unhelpful that I did not choose to bring the right people, but it was simply a judgment of mine. I did not have a conversation with Mr Mair in which he said, “I do not really want to go,” or anything like that; it was simply my judgment. It might not have been the most helpful judgment, but it was mine.

I did not expect him to say that he did not want to go; I was just wondering whether he said that he wanted to go. It is good to get that clarification.

Mr Hamill, I want to go back to what you were saying earlier about EBITDA. You mentioned a conversation around it being set at 10 per cent. Will you explain the rationale for that decision?

The 10 per cent level is a matter of judgment, and we could argue about whether it should be 11 per cent, 12 per cent, 6 per cent or whatever. In our view—which was arrived at through discussion with colleagues—there are three reasons for that level being set. The first is that a 10 per cent EBITDA would deliver around £30 million a year of free cash for the university to reinvest in itself. As you know, we are not a private company but a charity, and we can choose to put all that money back into the projects and the facilities that staff, students and our communities care about. When you walk around our estate, you can see the impact of many years of underinvestment in the fabric of the estate, but that underinvestment is also evident in things such as our digital estate, the equipment in our laboratories and other items involving capital expenditure. That level of EBITDA gives us an ability to reinvest in ourselves that we just do not have at the minute and have not had for several years.

Secondly, that level provides a buffer for the unexpected. As we have seen in recent years, due to macroeconomic events that have affected the country, including universities, such as high inflation, war in Ukraine and Covid, it is prudent to plan for a future in which we expect to see other such shocks. If we have been able to build up our cash reserves over a period of years, we will be more likely to be able to withstand those shocks.

Finally—I know that this is something that we have spoken about before—the funds that we would have as a result of setting such a level of EBITDA create a gateway for accessing commercial lending. If we really want to rectify the effects of the past underinvestment in our physical estate, our digital infrastructure and our equipment, and provide better services for staff and students, commercial lending will be a big part of that. A level of 10 per cent will deliver around £30 million, which is equivalent to one month’s operating capital. In discussions with banks, it has been felt that that, among other things that I mentioned before, would make us a far more attractive proposition to potential lenders.

Do you think that that level is realistic? Over the past 10 years, the university has used a level of between 3 per cent and 4 per cent, and the University of Edinburgh has set a level of 7 per cent to 9 per cent, with its accounts for 2023-24 suggesting that the level was 5.8 per cent. I am worried that setting it at 10 per cent will again set up the university so that it does not look like an attractive option to commercial lenders. I know that UCU suggested 4 per cent in some of its conversations. That 10 per cent seems high and unrealistic if we are talking about an average of 3 per cent to 4 per cent in the past decade.

You are right. I have gone back and looked through Dundee university’s audited accounts, and they are quite spiky. In some cases, it got to 7 per cent EBITDA.

However, by focusing on the past, Dundee university will not have a sustainable financial future. The recovery plan that we submitted in August has been reviewed by the SFC’s finance team and Deloitte, and we produced it and reviewed it. If we can make changes to the cost base, and provided that there are no unexpected shocks from anywhere else for everybody to deal with, I can see no reason why we would not meet the 10 per cent threshold. Bear in mind the fact that, as I said earlier, it will be a three-year journey to get there. It is not something that we can do immediately.

If we are on that course and things change, we can correct that. It might be that we feel that we can achieve more, or perhaps less, but I can see no reason why we would not achieve that threshold. However, it is very much about focusing on the future rather than on the past.

You said that you are relying quite heavily on the SFC and Scottish ministers. Have they had any input? The UCU suggested that a 4 per cent target would remove an additional £18 million through staff cuts, which is the equivalent of 300 jobs.

We share all our financial information with the SFC and, more recently, we have shared it with Deloitte, although the latter’s work was to assess our cash flows.

I go back to what I said earlier. Another stakeholder could propose a lower-target EBITDA—as Mr Briggs said, it was previously 4 per cent—but that would reduce our ability to withstand any toxic shocks and invest in the fabric of our estates and in the projects and propositions that are important to students and staff in our community. That would make us a far less viable proposition for commercial lenders.

I want to emphasise the point that Mr Briggs made about EBITDA of 3 per cent or 4 per cent in the past decade and more. You can see the effect of that when you walk around the campus. We have a working combined heat and power plant, which we are keeping going, but it should have been replaced already.

To give a figure for the quantum involved, there is a single, important, full-height engineering lab that cannot be used because of RAAC. To get that operational now would cost £20 million, which is two-thirds of one year’s cash generation—for one laboratory in one building. Even with this plan, we will not be in a position to do that of our own accord until towards the end of the decade.

You can argue that EBITDA should be lower or higher, but you can see the effect of a decade or more of 3 per cent or 4 per cent cash generation when you walk around the campus. We could deliver a great student experience, and we are trying to protect that into the future, but we need to invest if we are to do that. As Mr Hamill says, it can be argued that the level should be a bit higher or a bit lower, but the figures that we have had under these circumstances in the past would not protect the future of the university.

It was estimated that the merging of the eight schools into three faculties would save £1.4 million. Has that been realised?

The latest proposal, and the one that we are acting on, is for four faculties. We changed it to four faculties after consultation with staff.

That estimate needs some interpretation, because some of it relates to reduction of bottom-line costs through the integration of support services, and some of it is to do with opportunity costs and the creation of academic capacity. We have roles such as the associate dean for learning and teaching, who deals with the curriculum, learning technology and so on. We have eight of those roles now, and we will have four. All those people will continue in academic roles in the university, but they will have more capacity to do teaching and research.

The estimated saving is made up of a combination of the two. Forgive me: I do not quite remember what the balance was, but we are confident that in both those regards—more efficient operation and delivery of professional services, and liberating a degree of academic capacity—we will get something like that when we have completed the process. That will probably not be until early next year.

12:00  

Mr Hamill, on the basis of your experience since you have come into post and your experience at the University of Edinburgh, do you think that there is an alternative to the model that has been put forward? The briefing that the committee has had from UCU is interesting in what it says about that, and you have outlined that, on paper, the debt levels of Dundee university are relatively low. Is there an alternative plan that you could talk to the Government about, which might, for example, involve it being the primary lender? The Scottish Funding Council is offering you information about the money that the Government has managed to secure, but would you, as someone who has come in at this point, do something different from what is now proposed?

I am afraid to say that, in my view, there is not an alternative model. That is my very simple answer, which I can expand on, if you wish. Having been in post for three months and having worked with Professor Seaton and colleagues, I would love to be able to go to the Government or to the banks to borrow money. I cannot speak for the Government, but banks will not lend us money to pay salaries and operational costs on an on-going basis. I am afraid to say that, given that our revenues are being totally outstripped by our costs, as I mentioned earlier, the only way to make the equation balance is to reduce our costs.

Professor Seaton, do you think that the advice that the Scottish Funding Council is offering you is enough? Concerns have been expressed about the SFC’s proximity to the Government and, with regard to the future funding model, about an overreliance and overdependence on international students, which I do not think that Dundee university is suggesting is going to change. In the case of most universities, it is only on international students and accommodation that some profit is being made. What are your views on those matters?

I am happy to speak about both those issues.

You asked about advice. We get advice from all sorts of quarters, and, occasionally, we get advice from the Scottish Funding Council. Fundamentally, the Funding Council is our funder and our regulator, rather than our adviser, so it is not primarily an adviser.

You also asked about proximity. I will try not to go on at great length, but it is important to say that higher education funding and regulation is fundamentally a political act. The role of the Funding Council is to implement the Scottish Government’s political priorities as they relate to higher education. Usually, it can do that through occasional interactions such as letters of guidance and so on. In this situation, the process is much more intimate, and there is necessary involvement with the universities on the part of the Scottish Government and the Funding Council. Inevitably, there is greater proximity between all three of those actors—the Funding Council, the Scottish Government and us.

If you want to ask us what things we have done right in that interaction, I can give you a short list. There will be a longer list later, when we have thought more about it, and I am sure that the other two organisations that are involved would have similar thoughts. We are feeling our way—separately and together—towards dealing with this unexpected and unfamiliar crisis. I would say that the level of contact, in frequency, depth and intimacy, is much greater than you would normally expect, because of the nature of the crisis. I am happy to say more, but that is my thumbnail sketch on the first of those matters.

On international students, there is a long-running set of analyses on English universities by the Higher Education Funding Council for England, when it existed, and the Office for Students, which I think apply equally well to Scottish universities. What those analyses show is that, historically, there is a massive optimism bias, because people imagine that there will be lots more income, primarily from international students. It is natural to think that one will have income in the future, in contrast to the difficult decisions that have to be taken now. That bias is considerable.

If you look across the higher education sector in Scotland in general, you could say that the problems that we are facing now are because the income from international students has dropped, but you could also say that people were making forecasts through rose-tinted spectacles. We cannot afford to do that now. I do not mean that we are being overly cautious, but we are being very professional and very careful in the way that we make financial forecasts. There is not a pot of gold from international students. Comments have been made about immigration law changing and that being a factor, but there are wider factors, such as the fact that the Chinese market will never come back. China has some fantastic universities, and that market will never come back.

Geopolitically, the situation is very difficult. We are seeing free trade collapse before our eyes. Mostly, that is to do with goods, but, if services come into it, that will affect university education internationally. Therefore, we must be realistic about international student numbers. That also relates to the point that we discussed earlier about the sector as a whole. I do not think that those glory days are coming back; they are not coming back soon, anyway.

A cross-party review is about to take place through Universities Scotland, which will finish before the election, but I wonder what you would advise ministers to do, given the health of the sector and the concern that now seems to be expressed weekly by different institutions that are in different levels of financial health.

To start with a very personal perspective, this is my second stint as a university vice-chancellor. I am now in my 11th year as a vice-chancellor. I have never complained about university funding. I might sound as though I am being a bit critical, but I am not intending to be—I am intending to be realistic. It is a tough business being in government and deciding what the priorities are and what to raise in tax. I know that that is very difficult, and I never complain.

However, it is important to be clear about what is possible. What is not now possible or sustainable—given the limited income from international students and the declining income that we have had from the Scottish Government for teaching for, I think, the past 12 years—is the level of transfer from teaching income to support research that could previously have been afforded. I think that that is quite close to the end of the road.

I do not have a particular recommendation in that regard. Depending on what you would like to achieve, we could involve more public money, or we could have a system of bringing in more private money, which I know is not favoured by the current Scottish Government. If the funding continues to decline in real terms, it will become increasingly difficult for Scottish universities to fulfil their mission.

I read some really good news about the life sciences innovation hub in The Courier the other day. I hope that that represents a good opportunity for the university and for a thriving life sciences sector.

Absolutely. I did not come here—well, actually, I did sort of come here to bang the drum for the University of Dundee, but I do not want to spend too much time doing it. The quality of the student experience has been recognised in league tables. It is an odd and unsatisfactory situation, but it is an interesting one. It is a wonderful university that does great research and great things for its students, but which has been very badly run. We know how to fix that bit—we are fixing it—but it is a tremendous university, and I am very proud to be involved with it for a relatively short period.

We will stick with the wider university funding issue, which Willie Rennie wants to come back in on.

I am happy to come back in after other members, if you wish, given that they have been waiting a long time.

You mentioned the banking side of things, which I understand, as someone who comes from a banking background. The key things that the banks look at include the culture, the stability and the governance of an organisation. Can you say more about that? If the banks are to lend to you, they will look at past governance issues and how stable the organisation is now. I do not know what discussions you have had with the banks about the culture at the university.

I engage with all our banking partners on a monthly basis. You are right that all those questions have come up, because they have also read the Gillies report and they follow very closely the media reporting, the committee’s reporting and so forth.

I am very pleased to say that, in early October, we hosted one of our major banking partners on campus. We gave people from the bank a tour to show them facilities in the school of dentistry; they inspected and took part in a live lab demonstration in the school of life sciences; and they met me, other senior colleagues and student ambassadors. Through all that engagement and work, we have given them a sense of what is happening on the ground at Dundee university. I cannot speak for the bank, but I think that it now has a much better understanding and appreciation of the university.

We will have another banking visit in November, and I will continue those lines of communication each month with all our banking partners, because we feel that, eventually, those partners who stick with us through the current crisis will want to work with us and to lend to us in the future.

Professor Seaton, to build on that, governance and culture are key issues that have come out throughout this process. I suppose that there is a disconnect in that regard.

We have heard from various MSPs today, and from evidence that we have taken in the past, about the disconnect between the court, the senate, the unions and the students. In relation to changing the culture, can you say more about how you see those parts of the university working more closely together? Where would you like to see that getting to in 12 months or two years?

I will begin with culture and then I will talk about the more concrete things. I have worked at five universities in the UK and two abroad, so I have a lot of experience of university culture.

Generally, as there is in all large organisations, there is a tendency to have bureaucracy—lots of committees and discussions. We probably have more of that than other universities; I think that there has been a distrust of individual decision making, action and authority in the university. That is something that you get in all large organisations, but there is perhaps more of it at the University of Dundee. I am conscious of that—I said so to a staff meeting at which there would have been 700 or 800 people online and 200 or 300 in the room. I cannot say that every head nodded when I talked about bureaucracy, but almost every head nodded. We have to work on that. There are too many discussions and meetings and not enough things being done. We are going to address that.

You asked specifically about governance. There are two sides to governance. Corporate governance is a bit different in universities, but I would say that it is still the normal framework of corporate governance. We know that that did not work as it should—it is one of the major areas of failure that was identified by the Gillies report, and we are working on it. We are doing a lot: I will not go through the whole list, but there is induction of new members and financial literacy training. I have already mentioned the recruitment of new members. We have been more transparent. I will take away the point about the use of the Freedom of Information (Scotland) Act 2002, which is something that we ought to consider under the framework of transparency.

On the senate, I am chairing a working group that has the objective of putting the senators more in control of what goes on and giving them the space to promote or propose their own subjects and to produce their own papers. That is something that I believe in. There is further work to do on that, all of which is in the spirit of openness and reform.

As a cautionary note, although we all know that the leadership and governance were ineffective, governance is complex. I am satisfied that we are making good progress, and I think that I can say—Mr Hamill has referred to this indirectly—that the governance is competent and adequate, but, having gone through the experience that we have gone through, we are not there yet when it comes to having the kind of sector-leading governance that we need. It is a work in progress.

We are talking about financial support, but the cultural support behind the organisation is really important. You say that the work is on-going. Have you or the organisation set a goal, whereby you are saying, “We need to be in the position that we want to be in in six months’ or 12 months’ time”?

Culture is a difficult thing to change—

It is always an on-going process.

—and it is an even more difficult thing to measure, but there are several indicators. One is about openness and not being fearful of speaking. That will be for other people to judge. It is easy for me, as the principal, to say that the culture has changed, but I think that we are much more open, and we welcome challenge. We get a lot of challenge at meetings with staff and from the trade unions.

I did not experience this myself, because I came in later, but there has been something of a good news culture, whereby people have thought, “What is the good news?”, or, “I’ve got some bad things to say, but perhaps I’d better not say them.” That is clear from the Gillies report and my colleagues will have experienced it. I think that the situation is improving quickly but, as I said, other people will judge whether that is the case—I am not best placed to judge that.

I have one final question—I am conscious of the time. It is about workforce planning, which is an important aspect that colleagues have touched on. It is about the strategic fit between the posts and roles, the staff numbers, the courses and the student numbers. You talked about overseas students. We heard from the student association about its involvement in that. Can you say more about embedding that culture in how you look at workforce planning? Obviously, there is the immediate situation, but that will always be a challenge for universities year to year or on a three-to-five year basis. Can you say a little more about that?

There are two timescales. The timescale that we are working with over the next year or so is about operating more efficiently in doing, broadly speaking, what we are doing now. I emphasise that universities change their curriculums all the time. It will feel as though the university has the same interaction with the wider community: it will be teaching the same subjects and doing roughly the same research. That period will involve a change in business processes. Earlier, we discussed some of the efficiency gains that will be made through the creation of the faculties and changes to business processes.

We might feel that, in some areas, performance has to decrease. We would have to address that in a very measured way. Perhaps that would mean taking a bit less time to do things, or perhaps there are some things at the margins that we are doing now that we ought not to do. Those are very reasonable things for a university that is in crisis to deal with. We engage with staff generally. I have mentioned some of the engagement mechanisms, such as surveys and town hall meetings. We will consult generously with the unions at the appropriate time—we go beyond what is required as a legal minimum.

12:15  

With regard to the other timescale that you are pointing towards, we have had a lot of discussion with the Funding Council, particularly about what the university’s strategy is. The strategy now is to turn around the university with the same range of subjects. We know what obstacles we have to overcome in order to do that. That is the strategy now. The university will produce a strategic plan in the way that is normally understood in higher education—that is, a five to 10-year plan, in which we will look at things such as changed student aspirations, the role of artificial intelligence in university life and in wider society, and—if it is thought to be useful—overseas campuses or campuses in London, which other universities have. That is not a list of things that should be done, but all those things, and the subjects that will be taught, will be considered.

We will then get into more complex and tricky workforce questions, but I will not deal with those, for two reasons: first, because the timescale is too long to address the immediate financial challenge; and, secondly, because I have the lawful authority but not the moral authority to do that, as it relates to the longer-term future of the university.

Good morning. I will use the Gillies report as a starter. As we have all said at various points today, the report was about the lack of leadership and the leadership culture in the past, but we are back at this point again.

To use Mr Hamill’s example of going to commercial lenders to try to regenerate various parts of the campus and to get equipment for some of the departments, it is normal for a university to try to do something like that. On the whole, though, commercial bankers tend to want to see a strategy and a leadership group that will be there in the long term. However, you might not be there in the next 12 to 18 months.

Given what you are looking at now, is this not a crisis of some priority? From what I can make out—and please correct me if I am wrong—at least four senior posts are still held as interim positions. Would it not be a priority to get to the stage where we can look at people who will be doing that work in the long term? A commercial banker would look at it and say, “Yes, Professor Seaton. That’s all well and good. It’s a great plan, but you’re not going to be here in 18 months.”

I agree with every word of that. I am sure that that is how they will look at it, and it is urgent that my replacement be put into a substantive role for the long term. As I mentioned, we are progressing with the appointment of people to open-ended contracts in as many of the other roles as we can.

The timescales for getting senior leadership in post—for a principal, specifically—are long in the university. We are constrained by the Higher Education Governance (Scotland) Act 2016 on the speed with which we can elect a chair. The convener’s point that we do not necessarily need to do that is well made—that is true. One can make arguments on both sides about whether to do that. We are quite close to knowing whether we can elect a chair next time round, and I am confident that we will be able to do so. However, if we do not elect a chair then, we will certainly have to get going anyway—we cannot afford to wait any longer.

Appointing a chair is your number 1 priority. You have to get that and then work your way down the list of the various processes from there. The point is that it is holding back the idea of the university moving forward. I know that the university is at a crisis point at the moment, but we need to get it into a better place.

I agree with that. I know that it seems like a long time away, but I hope and expect that, by about a year from now, we will have received the auditors’ verdicts on going concern. I also expect us to have reduced the cost base. There are particular aspects of the terms and conditions of academic staff that require a very long notice period, which will mean that some costs will continue for another year, but we should be on the right track financially.

We will have my successor in post by some time next autumn. At that point, we will not be in the sunlit uplands, as it were, but we will be in a very similar position to other universities. We will be under financial stress, but we will have a permanent leadership team in place and a trajectory that leads to sustainability, and then we will begin to invest in our campus and secure the lending. Unfortunately, though, we will still be in a transitional period until roughly this time next year.

Throughout our deliberations on the University of Dundee, the committee has been supported by members for the university’s local area, two of whom we have with us today. They have been very patient while committee members have gone through their questioning.

Thank you both for coming today. I will start with the issue of prioritising buildings instead of people. One of the key things that staff tell me is how they feel when they hear that a surplus has to be generated in order to make buildings nicer while they are potentially losing their livelihoods, which will cause the city to lose wages and the economy to suffer. Do you understand how that feels, Professor Seaton?

I do understand how it feels. To go beyond that, it is something that the University and College Union often raises as an issue right across the higher education sector. In a way, it is right to say that. A lot of money is spent on fancy buildings that perhaps look very good but sometimes have only a marginal impact on the people who work and study there, so I understand exactly why they say it.

On the other hand, all our staff and students have a right to expect to work and study in reasonable conditions, which refers to both the physical infrastructure, such as the quality of the buildings, and the digital infrastructure, such as the quality of learning technology. At the moment, we cannot invest a penny in either learning technology or the buildings except to carry out some limited health and safety work, so the only answer that I can give—it might not be satisfactory—is that we are required to strike a balance.

I also emphasise that investing in the campus has long-term value that lasts over decades. If we look back at the university’s history we can see that current expenditure has been prioritised over investment in the campus, which might have seemed very reasonable, but in the end there has to be a balance. We are happy to discuss quite where the balance point should be, but it cannot be right that we allow the quality of the campus to deteriorate simply in order to sustain employment. There has to be a balance, which I realise is quite hard to find and will not be necessarily agreed by everybody, but that is the question.

The case that you are making is that the capital investment is mission critical for the university, because it is about ensuring safety—is that what you are saying?

To quite a lot of people, it feels like it is more about buildings getting a coat of paint and looking nicer in order to attract people in. Can you give a commitment that you are not just generating a surplus to build up white elephants or create vanity projects? Can you assure people that the aim is to meet the needs of the institution, the students and the staff?

I can absolutely guarantee that. Personally, I am not interested in vanity projects—I do not think that anybody is. There will not be time for such projects at the University of Dundee for some decades. I am interested in giving students good studying conditions and staff good working conditions. It is not about buildings getting a lick of paint; it is about their suitability for purpose.

The health and safety issues that we are managing are about going beyond that in order to provide decent studying conditions—not world leading, because we do not have enough money for that—so that our excellent students and staff can study and work together.

I welcome that assurance.

On the issue of borrowing, we have talked about capital availability, which has been a significant concern of ministers and their advisers in my discussions with them. They want to see quick access to borrowing. Can you give a timeframe for that, Mr Hamill?

It is heartening for me to hear that you are having those conversations, and I am sure that ministers will be heartened given their focus on the issue, but what is the timescale given the on-going concerns, financial tests and EBITDA requirements? Might commercial lending be available to meet the capital requirements, so that you can stop cutting jobs in order to pay for them?

Based on our discussions to date with banks and on the information that is available to me, we are looking at a minimum of 18 months. That is predicated on a few things: we must be able to access the additional funding that we have spoken about today; we must be able to reduce the cost base to a level where we can continue to be financially sustainable; and we must be able to deliver on the tuition fee targets—that is, student intake targets—in two successive years. That means the year that has just happened—the September intake—the January intake and next September’s intake.

If we can demonstrate all of that, we will be on a pathway to accessing commercial lending, although that will be subject to decisions by the credit committees of individual banks.

Do ministers and their advisers understand that?

I have given the same information to the Funding Council and to Government officials.

But not to ministers. I think everyone here was quite surprised by your answer, Professor Seaton, when you were asked when you had last had a conversation with a Government minister. You said that it was with Jenny Gilruth in August and that you have never spoken to the current Minister for Further and Higher Education. Given the rhetoric that we have heard from the Government, I had assumed that, on day 1 in his post, Mr Macpherson would have said that one of the five top things on his to-do list would be to have a conversation with Nigel Seaton.

You have described this as being one of the biggest crises in a British university since the second world war. Let me give you a quote. On 3 April, in the Parliament chamber, John Swinney said to me:

“I assure Mr Marra that there is no absence of leadership on that question, which is commanding a huge amount of the Government’s time, attention and focus”.—[Official Report, 3 April 2025; c 25.]

However, you have not had a conversation with the higher education minister, who has now been in post for two months. That is extraordinary, is it not? Have you tried to have a conversation with him?

I have not. By way of explanation, I have been cautious. I did speak to his predecessor and we have been working closely with the Funding Council, because our main relationship is with it as our funder and regulator and it works with the Scottish Government. Under these circumstances, and in any circumstances, it is always good to have contact with ministers, but we have mostly focused on the relationship with the Funding Council.

I will come back to the Funding Council. I can tell you that I have been asking for a meeting with the minister with responsibility for colleges and higher education since he was appointed, but I have yet to get a response. I am really concerned that the matter is not commanding more of the minister’s attention. I will leave that point there.

I turn to the Funding Council. I have conversations all the time with university staff who get in touch about different issues, and I had one yesterday with two members of staff who are still completely unclear as to the status of the plan. The committee will perhaps have been given a little more clarity about it today. Will there be a plan? Will we see a published plan, or will we not?

We expect that the Funding Council will present us with commissions of grant, and we—and they—hope that will happen soon. As the name suggests, those conditions will be associated with any additional public funding. I expect them to deal with matters such as the proper use of public funds, oversight by the Funding Council—which I think will probably, and very reasonably, include a degree of intrusive oversight—and the role of the university court. Beyond that, I do not think that there will be any constraints on the work of the university as an autonomous institution.

At the start of the meeting, you said that the letter presented by the Funding Council identified two elements where there were problems and that you were told not to progress with reorganisation or with redundancies. Those two elements were therefore rejected, but you have not been impeded from taking action on them. From conversations I have had in the past week, I understand that the information about the reorganisation went out in an email to staff, who say that it is progressing although, at the time, they had heard from the Government that it would not be allowed. Setting aside for a moment the real human consequences of redundancies, there is a lack of clarity and people still do not really know what is happening. Do you accept that?

I know that you are looking for a yes or no answer, but the three actors—the Scottish Government, the Funding Council and us—are feeling our way together through a difficult set of decisions. I think there will be clarity once the conditions of grant are published and available and that it will then be clear what the constraints on the university are.

Are you talking about the conditions for the overall annual grant that the university receives?

That is separate. Of course there are conditions of grant for that, which are quite detailed, but there will be separate conditions of grant for the additional funding.

Is that the £12 million, initially? Will you give us the quantum for that?

That is the £40 million of additional funding that we will receive over the next two years. Here I will defer to Mr Hamill, because there is a separate discussion on a loan of £12 million, which, I imagine—because it is a loan—will not be covered in the same way. Will that be separate, Mr Hamill?

12:30  

Yes, that is correct. There will be two tranches of £20 million—£40 million in total—over the next two financial years. As Professor Seaton mentioned, it is a loan from the Funding Council through the financial transactions mechanism, which will be subject to a separate loan agreement.

When are we likely to see an outcome on that? I believe that there was some concern from court members about whether they might be liable with regard to that loan. The latest that we heard was that the loan was to be effectively turned into a grant. Is that not the case?

The loan will still be available to us when we can have the 2023-24 financial accounts that we spoke about earlier signed off by the court and the external auditors, which we hope will happen in December or perhaps early January. That would put the court in a position in which it will have a going concern assessment and therefore its members could, in good conscience and as charity trustees, accept the conditions of the loan agreement. I am hoping for that loan to happen in January.

Okay, that is useful to know.

You will have seen reports of turmoil in the Scottish Funding Council. There have been board meetings where there has been uproar about what is happening at Dundee and particularly about how exposed the Scottish Funding Council is. I have two questions on that. First, given what you have described, is the SFC autonomous from the Government?

I note your choice of the word “autonomous”. The Funding Council is autonomous from the Government in the same sense that we are. In other words, it works within a framework, as we do, too, and we take our own decisions within that framework. That is as I understand it. The right people to ask would be the Funding Council—

I am afraid that we have already asked—the committee has had members of the Funding Council in front of it—and clarity was not forthcoming.

The word that you used was “autonomous”. The Scottish Funding Council is clearly not independent, and we are not independent from it. To me, autonomy means that you take your own decisions within a framework. However, the framework here is a much more constraining one. When section 25 has been implemented and money has been provided directly through the Funding Council for special funding to a university, the policy framework is much tighter.

As I said earlier, the relationship between the Funding Council and the Government is much more intimate. It will feel more intimate and constraining, but there is still the question of a framework. How will that be tested? The Funding Council will produce the conditions of grant. They will be produced by the Funding Council, and I am sure that they will be produced by the Scottish Government—

Is the Scottish Funding Council competent to deal with this issue, particularly given the fire that is running through the sector?

I am sure that it is competent to deal with overseeing the recovery of the university, awarding the funding, with the agreement of the Scottish Government, and defining the conditions of grant. We know that it felt that there was a capacity question, because the Scottish Government contracted with Deloitte to do financial analysis in support of that. Everyone will understand that this is an unusual situation and that the Funding Council does not have the capacity to do all the analysis, but I am confident that it can do its job in overseeing the recovery of the university.

Secondly, you mentioned earlier that the proposal was put forward by yourself, but there did not appear to be any analysis of that—there was just a letter that came back in response. Do you think that the Funding Council scrutinised the proposal, or was that a political response?

I cannot tell, but I did not see it as a political response. We will all learn lessons from this experience, one of which is that we should have asked more questions about the recovery plan and how it would be used. It was perhaps not used by the Funding Council in quite the way that people thought it would when it was being submitted. We got no specific guidance on how to produce it or what it should contain. It helped to focus the discussion, but, as I said, it was a discussion on only two elements: the reorganisation and the plans for the workforce. I am not sure what else I could say about that.

In that case, I will turn to progress on governance, which various members have touched on. One of the first recommendations in the Gillies report was about the presentation of financial reports to court. The convener has already touched on the lack of transparency in that respect, and you are going to reflect on that. Do you feel that sufficient financial information is now being presented to court?

I will take Mr Hamill first on that.

Yes is the short answer. It is hard to imagine what more information could be provided to court, given that we are producing management accounts and cash flow information. I have recently provided a detailed written account of financial matters for court to consider, and I will do the same for the upcoming court meeting early in November.

In my view, then, the answer is yes, but clearly financial reporting is a job that is never done. We must always strive to do more, and we must always strive to take the feedback from court and, indeed, from committees and the community. If there are questions, challenges or critiques, I am very open to hearing all of them and to improving the overall reporting of finances. Those are things that I very much welcome, and I will continue to work on the matter.

I will close with this point, convener. In the conversations that I have with staff, they tell me that, from day to day, many things are not working in the institution. As people will understand, when you take out the number of staff that the university has done, both through the voluntary severance scheme and through people resigning from key posts, grants do not get signed off and approval cannot be got for posts or expenditure in different areas.

You have talked a little bit about this already, Professor Seaton. Given that level of change, is there any way in which people can be heard? When people tell me about not being able to get those critical decisions pushed through in an institution—and, as some have told me, this is about the wages that they get in their bank accounts and about grants that are not being signed off but which are sitting on executive-level desks instead—is there any way in which I can raise that directly? Given the turmoil, is there any means that you can create internally—or any problem-solving, star-chamber approach that you can take—to ensure that those things get sorted in order to make the organisation work?

In an ideal world, in an organisation that was not under great stress, the answer would be to report such things through the line management system. Clearly, though, the higher the level of stress, the less successful that approach will be.

As I have said internally at town hall meetings, I am very happy to hear from anybody, and I occasionally hear from people who feel that they are not being treated well or that they have impossible jobs to do. I urge people to get in touch—they can find my email address online or they can call my office.

Thank you.

I call Maggie Chapman.

Thank you very much, convener. Before I start, I put on record my entry in the register of members’ interests as rector of Dundee university and, therefore, a member of court. I will keep my questions within territory that does not overlap with that interest.

Good afternoon, and thank you both for your contributions so far. We have heard about a range of topics, and I want to pick up on a couple of different areas, the first of which is finance. I do not know whether this question is best directed at Lee Hamill in the first instance, but I note that you have talked about the areas where you can cut costs—capital investment, operating costs and staff—and have not really talked that much about income generation. What conversations have you had within the university community about income generation that is not about international student numbers, bank loans or money from the Scottish Government?

We recently conducted a listening exercise with staff members, and two specific questions within that question set concerned, first of all, where to save money and, secondly, exactly the issue that you have raised of where we can bring in extra income. There have been more than 100 responses to the additional income question, and a group has been working through the suggestions. As you can imagine, there is a broad range of ideas, some of which will be very fine while others, unfortunately, will not be workable, but that process is on-going at the minute.

The senior team is also very open to any ideas that we have not thought of. It is really important that we hear those ideas and have those conversations. That is one way in which we are listening to staff in that regard.

It is helpful to know that that material is being collated, looked at and stress tested. How do you see it fitting into conversations with the SFC and others about the longer-term recovery plan?

If we come up with additional ways to increase our income, we will share that with the Funding Council and with Government representatives. As Professor Seaton mentioned, discussions with those stakeholders take place sometimes three times a week, and we are in almost constant dialogue with those important partners. We will factor all that in as we go. Clearly, at the minute, our financial plans are forecasts. If those forecasts change, or the balance of income or costs changes, we can correct our course.

I will stay on finance, but address a slightly different point. Lee Hamill might be best placed to answer the question, but Professor Seaton should feel free to come in. We have talked about loans, grants and various conditions. What is the breakdown of the different chunks of money that exist in loan offers and grant offers from the Government through the SFC?

I can answer that. On the money that has been paid to us to date, we received £10 million earlier in the year as a grant. As I said earlier, we hope to soon receive a letter with conditions of grant for a further £40 million in grant funding in two tranches of £20 million. On top of that, through the financial transactions mechanism that we spoke about earlier, there is a loan offer from the Scottish Funding Council of £12 million.

Will the conditions of the loan detail the repayment plan?

Indeed. As I understand it, there are standard conditions. There will be a repayment period that details the interest that is payable, which will be at a very low rate.

So, will there be a £50,000 grant and a £12,000 loan?

It will be £50 million and £12 million.

Sorry—yes. I left off three zeros there.

Are you able to provide updated student numbers? Everyone has gone through matriculation, and my understanding is that the numbers are better than expected or are not as bad as projected.

We have some figures. We will do a double act: Mr Hamill will look up the figures and I will give you the narrative while he is doing that.

Our outcome for student recruitment has been completely remarkable. There are three main areas: students who are resident in Scotland; students from other parts of the UK; and international students. More students were admitted from Scotland than in previous years. We all read the papers and we know what has been said about the university and, accurately, about the failure of leadership and governance, but we are still a great university and we want students to come to us. That number has gone up by about 4 per cent, even though the university has been in very serious difficulty. Three or six months ago, I would have thought that to have been almost unimaginable. It has been great.

The number of students from other parts of the UK has been broadly similar to previously, as has the intake of international students, many of whom are postgraduates. We might imagine that it would have been better if that number had been bigger, but I am confident that it will grow as we put the difficulties behind us. I think that the outcome for student recruitment has been really good.

So, it has been better than projected, and that is down to the hard work of the recruitment team that is made up of the academic and other staff who are facing job cuts.

Yes: it has been down to their hard work and due to the perceptions of the underlying quality of the institution.

It would be useful to see the numbers.

We can send a detailed summary to the committee, if that is acceptable.

That would be helpful.

My next question about numbers is on job losses. Nigel Seaton spoke earlier about the total difference in staff numbers being 275. The numbers that I have been able to get, looking across the past 15 months or so, show that, in August 2024, there were 4,367 staff and that, after the voluntary severance scheme this year, there were 3,698 staff, which is a change of 669. I appreciate that some of those staff will have been part time, so the headcount does not equal FTE posts. It would be helpful if the committee could get clarity—not necessarily now, but in the coming days—on that detail. What role will the more than 200 unfilled vacancies play in the figure of 669, or in the way that you describe or define the 275 figure?

There is clearly an apparent inconsistency there, so we are happy to go back and check both of those figures.

On engagement with the university community, and the need to improve the culture that you have talked about, you said that you have had good staff engagement at town hall meetings, which roughly one third of staff attended, and that you are willing to provide information when requested and you want to be transparent. Why do you think that Dundee UCU is going on strike for a week in two weeks?

That is not a matter of conjecture. The union has told us that it is because it has a mandate for strike action as the university has not ruled out compulsory redundancies.

12:45  

How is your engagement with the trade unions working if that is their position? You say that you want to improve the culture and you want to be transparent, but there has clearly been a breakdown in communication.

I am not sure that I would agree that there has been a breakdown in communication. I am not a member of a trade union; I lead a university which is in an industrial dispute. I have been a trade union member in the past. It is reasonable and understandable for trade unions to be opposed to redundancies, and it is natural for them to take industrial action to try to prevent them.

I was principal at Abertay University for 10 years and, particularly in the early years, there was often industrial action at the national level that affected the university. As principal, I maintained good relationships with the trade unions.

I am not sure that the relationship between the University of Dundee and unions is as close as it ought to be, but industrial action is not a mark of that. It will have some sort of impact on the running of the university and the students, but it is a normal and reasonable thing for the union to do. I do not regard it as abnormal.

We have work to do on our relationship with the unions, especially as there has been a lack of trust in the past. To make a general comment, I do not think that changing the members of the leadership team will create that trust. There is a corporate lack of trust in the head office on the part of the unions and the wider university community. It matters that people have been changed, but that is not the whole answer.

Industrial action is not a mark of the failure of the relationship, however. It is one of those things that happens, unfortunately.

I might pick up on some of those points again in a little while, but I want to follow up on the point about the sense of community. How do you respond to what we have heard from DUSA that students are concerned about the impact that they see that all this is having on the people who are teaching them, supporting them, making sure that the labs work, and so on? What would you say to DUSA, either directly or indirectly through us?

There is a concrete example of that. A group of architecture students were unhappy about the staffing levels and they wrote to me and one of the vice-principals, who then had a meeting with them. I encourage anybody who feels like that to write to me and either I or one of the other senior leaders will have a conversation with them. It might not be very comfortable listening for us, but I am eager to listen.

Thank you for that offer, but you might regret making it publicly.

We will see. It is important to hear these things. I do not guarantee that we will have a meeting on the same day, but I do want to hear from people.

I want to go back to the issue of the university engaging with staff and building and sustaining relationships with them. What is your understanding of fair work?

Do you mean in a legal sense or a moral sense? I know that you are asking questions of me, but I ask that question of you as it would help me to understand what you want to know.

I mean what is your understanding of fair work as a university principal who has responsibility for the wellbeing of more than 3,000 members of staff?

Thank you. I accept that and it is helpful. I know that there is a formal definition of fair work, but I understand the question that you are asking.

I have a clear responsibility to treat my colleagues with respect and to do all that I can to support them. I think that I have a moral responsibility to behave humanely in difficult circumstances. However, to be clear, I do not think that that can possibly stretch to not having a reduction in the staffing when that reduction in the staffing will save the university. There are many unfairnesses in this situation. For example, we have paused academic promotions. That is a fundamentally unfair thing to do, because people do not get the grade that they should have, but it is in the interest of preventing an even greater unfairness, which is the university going into administration, because potentially everybody could lose their job. That is the framework in which I am working.

I am committed to treating people with dignity, treating them fairly and to doing all that I can to support them. To me, that is an absolute moral requirement, but I cannot reconcile that with what I know that some people would like us to be able to do, which is to guarantee that the level of employment in the university will remain as it is now. I do not think that is consistent with the sustainability of the university.

If we turn to the, as you put it, slightly more legal definition, what is your understanding of how the university’s fair work statement was created?

I have to admit that I have not read the university’s fair work statement.

Okay. My follow-on question, which I appreciate you might not be able to answer, concerns what role the unions had in the discussions around the creation of that statement. I ask that because, at a meeting to discuss the fair work statement, union representatives pushed back and challenged it, because it did not refer to the Gillies report and the clear recommendations therein, and did not mention the need to improve relationships with the trade unions. However, those discussions have been ignored—those points have not been incorporated into the statement or into the recommendations that flow from that.

May I please take that away, investigate and report back to the committee? I do not feel that I have the necessary knowledge to answer that at the moment.

Okay. My final question comes back to the point of culture. You have talked about the personal and professional trauma that staff have gone through. UCU told us that around 70 per cent of staff who completed the survey are seeking support for poor mental health. We have heard that critical views are being silenced through acts of intimidation, including being identified publicly, that decisions continue to be made behind closed doors and that proper procedures are not always followed.

Those are just some examples, but there are more. I think that staff feel gaslit sometimes, quite frankly, but I know that that is not your intention. We have heard fine words in response to questions from Pam Duncan-Glancy and others today. How are you going to turn that around? It seems that we need to move beyond fine words about what we want in the university community—dignity, humanity and trust—but the question is, how do we do that?

I agree with you. I am unsighted on some of the particular points, but overall I agree with you about the need for change. The community is traumatised, and things have to be done differently. We talked about the same thing in the listening exercise. People mentioned mental health. We have a mechanism for the service to support staff’s mental health, but I realise that the underlying point is not how you can get help but why you are in that position in the first place. I think that it will be a slow process. Words carry only so much significance; it is by actions that we will create a greater sense of stability over time.

You made a point about the identification of people. I am afraid that I do not fully understand the context of that. Was your point that people are being named so that they can be intimidated?

People who have raised issues are being picked on or identified so that they could be picked on. They now feel more vulnerable than they did before.

I realise that I am perhaps adding to the length of my email inbox, but I would want to hear about that. We have a grievance process through which people can complain if they have been badly treated. People sometimes think that they should not use such processes for some reason, but they exist to be used. If anybody feels they have been badly treated, I encourage them to do the formal thing. They should do what they wish to do, but I emphasise that the grievance process exists to be used. It is not a bureaucratic process that is intended to suppress use; it is intended to be used, and I hope that people will feel able to use it if they want to, and they can get in touch with me.

On the point about closed doors, that is a bit less clear to me, because it is necessary that the university leadership team is charged with running the university, under the oversight of the court, and it will sometimes take decisions that people do not know about until they hear about it later. I am not quite so clear about that, but on the point that people should say what they think without fear of retribution, if there is any fear of retribution, I would wish to know about that.

Okay—thank you. I could go on, but I will not.

I have a couple of quick questions to try to wrap up some things from the earlier evidence.

Mr Hamill said in response to some of the final questions that the senior team is open to ideas that it has not thought of. Professor Seaton, what is the most radical, thinking-outside-the-box idea that you have come up with to make the necessary savings at Dundee?

You have left the most difficult question until the end.

I think that I have been so focused on the art of the possible that my mind has turned not towards radical solutions, but towards practical and perhaps difficult solutions. Sorry—that is a confession, I know, but I do not think that I have had that kind of radical thought.

Will your thinking now move there?

That is an interesting challenge; I will take the challenge to think a bit more radically.

This week, I have been discussing with others with whom I have had meetings the fact that the University of Greenwich and the University of Kent have come together—

Yes, exactly.

That is an arrangement whereby the universities keep their own identities but share services. Is that the type of thing that could be considered?

That is an interesting initiative. I have spoken to one of the vice chancellors involved and I have a call arranged with the other one, and I have spoken to Universities UK about it. There are various different models, but that model is really interesting because, as you say, it is aimed at increasing efficiency, with each university maintaining its identity and its own student body. It is an interesting example.

Without wishing to sound too negative, however, I would say that the University of Greenwich is in a robust financial situation and the University of Kent is clearly not—that has been a matter of record—and that such an arrangement is not a substitute for good university funding. If there is good, sufficient university funding, these things can be done, but they are not cost neutral—they cost a lot of money to do and they save money later. That sort of thing should be on the table, but that is not a solution to a crisis such as the one that we are facing now—I do not know whether you were hinting that it was, convener. We need to sort ourselves out and then, having done that, other possibilities open up.

I am going through my questions in the order that I wrote them down. I know that you have taken legal advice that you cannot comment on Chris Reilly. Can you say, and continue to say, that he left the university by mutual agreement?

The position of the university is that he left by mutual agreement. We have said that publicly.

And that is your position as well.

Yes—it is my personal position, too.

Mr Hamill, Willie Rennie asked Professor Seaton if he would need to come back and ask the Government for any more money, and he gave a very clear one-word answer: no. Do you agree with him?

It is not our intention to do that.

You have said that you are projecting a deficit of £30 million this year and £14 million next year, but you are getting £40 million from the Scottish Government: two tranches of £20 million. I know that there is also the offer of a loan, but I do not think that that is for the running costs—

That is right.

The £30 million and the £14 million already come to £44 million, and you are getting £40 million. How do you square that circle?

I should have said that the £30 million is for the year 2024-25—the most recent set of as-yet-unaudited accounts. That does not include the additional grant money. It is the underlying position of the university. If we were to include the additional grant money, which is obviously non-recurring and is not generated from our base activities, the numbers would change.

But you are confident that the £40 million that you have asked for covers it, even though you are projecting significant deficits that exceed that.

Yes. The £40 million is coming over the current academic financial year and the next one, and that will allow us to continue to operate.

Yes, but I am still unsure about this. The figure that you are going to be spending is bigger than the figure that you are getting.

Could you give me—

You are going to have a deficit of £44 million, but you are getting £40 million, and you are both saying that you do not need any more than £40 million.

We are also planning to make significant cost reductions.

To what figure?

With regard to next financial year, because of the most recent voluntary severance scheme that we spoke about earlier, just shy of £15 million of savings will be delivered on a full 12-month basis.

13:00  

Surely those cost savings are in your calculations, given that you know that your year-end deficit is going to be £30 million one year and £14 million the next.

The deficit is £30 million in the year just closed—that is, 2024-25. For the year ending 31 July 2026, we are looking at about a £15 million deficit.

And that is with cost savings.

That is with cost savings in there. For 2026-27, if we had no further cost savings—after all, we have not actioned any of these things yet—and if we had no further grant funding from the Government, that deficit would increase, because of inflation on the cost base.

I am still a wee bit unclear about that, but I realise that we are pressed for time.

The last thing that I want to focus on is an issue that Michael Marra touched on: your relationship with the Funding Council. How helpful has it been?

What we need from the Funding Council, along with the Scottish Government, is the funding that we need to survive, because we went beyond the point at which we could survive on our own account at some point in the middle of 2024—or maybe early 2024. We need that support to survive, and the Funding Council has been very clear that its job is to help us get it, working with the Scottish Government. We are, I think, very close to getting the conditions of grant and getting a commitment for that funding to be delivered. That is what we wish from the Funding Council, and that is what it is doing for us.

The Courier reported that, when the plan was rejected and the university was looking at what it needed to do, the Funding Council suggested that, in terms of what needed to be included going forward, it would know what was needed when it saw it. Is that a fair representation?

I vaguely remember reading that in The Courier. I have forgotten the particular context in which it was meant, but I think that it related to the content of the plan.

Have you heard a comment like that from the Funding Council? Did it give such a vague response to serious points?

We had a couple of conversations with it in what would have been early July about the requirement in the plan and the clear guidance that it was to return the university to financial sustainability and to allow us to borrow commercially. We asked what the plan should look like, what it should contain and how it should be organised, and it gave us complete freedom about how we should do it. I think that I remember that being said, but I cannot remember the context—I am sorry.

If you remember it being said, do you know who said it?

I think that Richard Maconachie probably said it, perhaps in connection with the drafting of the plan, but I do not remember the exact context.

That is something that we might raise with him, because it is a very vague response. What if a Government minister came to this committee and said, “We do not like what you are doing, but we will know what we like when we see it”? It is not very helpful, is it?

I thought that the other question was the hardest one, but it is getting harder again.

No, it is not helpful, but when we all look back at this in a few months or a year, we will see things that we could have done slightly differently. We have a list of things that we should have done differently, and I am sure that the Funding Council and the Scottish Government will have such a list, too. This has been a very delicate and important—and actually quite difficult—process, because it is very unfamiliar to all of us. We have all said things that were perhaps more vague than they could have been, in an ideal world.

Okay. I will end it there, because, as Maggie Chapman and others have said, there is a lot that we could go through, but you have been very generous with your time.

We are grateful for the work that you are doing at the university in trying circumstances, but in particular, I would like to reiterate what others—and you, Professor Seaton—have said, which is that our thoughts are with the staff and students who continue to go through difficult times, because of the uncertainty around the university. All of us on the committee are keen to see a very bright future for Dundee university, and we will do anything that we can to assist with that. Thank you very much.

Meeting closed at 13:05.