Dundee University has warned staff that job cuts are incoming as the institution faces a £30 million deficit in the coming financial year.

Principal and vice-chancellor, Iain Gillespie, sent an email to the university’s 3,000 staff, telling them that job losses were ‘inevitable’, blaming a drop in student recruitment this year despite attracting record-numbers of fee-paying international students.

The cuts add to Dundee’s troubled position, with a recruitment freeze and savings measures already in place, with the future looking increasingly bleak.

“This will be a very difficult period, certainly for this financial year and next,” wrote Professor Gillespie.

“We now have measures in place to reduce our costs including a freeze on recruitment, including on filling vacancies for existing posts and reducing operational expenditure. The decisions we take will be in the interests of the future health and sustainability of the university but they will not, in many cases, be easy ones.”

The prospect of imminent job losses marks a new low for a university which only last year was ranked as the UK’s top university for spinout success. 

Exscientia, an AI focused biotech firm and one of the UK’s biggest spinout success stories, came from Dundee’s spinout programme, before going on to float on the US NASDAQ with a value of $2.9 billion (£2.2b). 

More recently, Kate Forbes, deputy first minister, announced an £8 million grant contribution for the construction of a new Life Sciences innovation hub, a space that was opened in order to anchor new high-growth spinout companies to Dundee.

However, none of that has translated into profit, with the university falling into the red following expenditure of £320 million, according to its most recent published accounts.

Where once, Dundee might have been able to rely on the Scottish Government to make up the shortfall, that’s no longer the case. Earlier this year, the Scottish Funding Council announced it was slashing university budgets across Scotland, reducing the funding for teaching, student placement, and pensions.

At the time, Gillespie, serving as the convener of Universities Scotland, said: “This is by far the toughest funding settlement universities have faced, as £28.5 million of Government cuts had to be found from next year’s teaching budgets.”

“There is no way that this trajectory of public funding in university teaching is sustainable. Universities will find it increasingly hard to manage these cuts whilst continuing to offer the high-quality education and wider experience that our students deserve and country needs.”

For Dundee, the reduction in funding has led to increased pressure on faculty, with more staff being forced to teach larger numbers of students. As well as leading to a demoralised workforce, it could eventually lead to questions about the quality of teaching at what is still considered a highly regarded institution, and one of Scotland’s top universities. 

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To counteract the loss of government money, some have called for a radical rethink of the Scottish higher education model. 

This year, the Institute of Fiscal Studies found that under the current system of free tuition, the Scottish Government does cover the full costs of teaching for Scottish undergraduates who study in Scotland, forcing universities to find other ways to make ends meet. 

Although the SNP have been steadfast in their refusal to give up on free tuition fees for Scottish students, with Alex Salmond famously saying ‘rocks would melt in the sun’ before allowing Westminster to end the policy, it could be time to revisit the idea, if only in an effort to stop other major institutions from reaching the cliff edge Dundee now finds itself on.