The interim principal of the University of Dundee, Professor Shane O’Neill, has resigned following the publication of a scathing report into the institution’s financial crisis, which saw the Scottish Government forced to step in with a multi-million pound bailout.

The independent report, led by Professor Pamela Gillies, former principal of Glasgow Caledonian University, found that poor financial judgement, inadequate management and reporting, weak financial governance, and a lack of agility by leadership in meeting Dundee’s financial shortfall contributed to the ‘sudden and serious’ collapse of the university’s finances.

Gillies report, released by the Scottish Funding Council (SFC), said that financial oversight was ‘lacking when most needed’, with the university suffering from an ‘over-confident style of leadership’, and a management culture in which challenge was ‘actively discouraged’.

Levelling particular criticism at a ‘triumvirate’ of Dundee Uni executives, including former principal, Iain Gillespie, as well as the university’s Deputy vice-chancellor and COO, the report found that upper management were not transparent or clear in their financial decision making, and slow to act to meet the burgeoning deficit. 

At the root of Dundee’s financial collapse, Gillies claims, was the drastic fall in overseas student numbers from 1,230 to 393, coupled with the university’s aggressive growth agenda, even as a ‘loss of income was predictable’ going into the 2024 financial year.

According to the report, Dundee Uni needed to make £8 million in savings in 2024 to address the international student shortfall, but did nothing to address the ‘inevitable outcome’ this budget black hole would bring.

The report said that the ‘ineffectiveness of internal systems and controls’ to meet the scale of the challenge laid the foundations for the university’s financial crisis.

“Despite these very considerable financial pressures and challenges affecting the sector in Scotland, the University of Dundee is the only one of the nineteen universities and specialist institutions to have suffered a financial collapse,” wrote Gillies.

“My hope is that by rigorously, and clearly accounting for the past, this investigation will support a sustainable future for the University of Dundee which is built on financial competence, transparency and accountability.”

Minutes after the report was published, Dundee University released a statement in which O’Neill resigned his post with a ‘heavy heart’, and apologised for the impact the financial crisis had on staff and students, saying: “I have done all I can to set the university on a path to recovery, engaging with internal and external stakeholders to find the best way forward.

“I had hoped that we would be further along that path by now, and it will now be for others to steer that course into the future.

“I am truly sorry for the impact this financial crisis has had on many people, particularly our staff and students.”

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Along with O’Neill, another two members of Dundee University’s governing court also resigned with immediate effect, with deputy chair of court, Dr Ian Mair, saying: “There is much in this report on which we have to reflect. We will take a short time to digest the full implications of the report, but we will act on the findings.”

With the Scottish Government already having committed £22 million through the SFC to rescue Dundee Uni from the brink of collapse, the education secretary Jenny Gilruth said that ‘serious questions’ had to be answered, and committed to providing an update at Holyrood over the future of Government support.

“It is evident from the findings that there are serious questions which must be answered by the University of Dundee’s management team,” said Gilruth. 

“This is obviously a difficult time for the university, but I welcome the decisive action which has been taken with the changes in leadership.”