The University of Dundee has been thrown a lifeline with a £22 million rescue package from the Scottish Funding Council (SFC) as it grapples with a severe financial crisis.

The funding aims to help the institution address its immediate financial challenges and stave off the threat of insolvency.

The university, which is facing a £35 million deficit, notified the SFC of its financial difficulties in November 2024. Since then, the SFC has been working closely with the institution to assess the scale of the crisis. The newly approved support package includes a mix of low-cost loans and capital grants, designed to provide urgent relief.

Commenting on the support package, SFC chief executive Francesca Osowska said: “We recognise the significant uncertainty and anxiety that staff and students are experiencing at the University of Dundee. Given the important role that the University plays in the city and the surrounding region, we also acknowledge the concerns of the wider community.

“The University of Dundee is a world-leading institution with a rich heritage in delivering excellent student outcomes and world-leading research.

“We are committed to supporting the University, and the funding approved by the SFC Board today will support the University as it develops its financial recovery plan to return to a position of financial health.

“More broadly, our focus remains on making Scotland an outstanding place to learn, educate, research and innovate, both now and for the future.”

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In a bid to address the financial black hole, the university last week announced plans to cut 632 full-time equivalent posts. This move has sparked concern among staff and students, who are now facing an uncertain future.

Scottish Funding Council Gets Scots Gov Backing to Help Scottish Universities

The announcement of the funding package for Dundee university follows news last week the Scottish Government would be providing £10 million for the SFC to support the country’s higher education sector and provide a bulwark for those universities facing financial challenges.

The Scottish education secretary, Jenny Gilruth, said the additional £10 million will be provided to the SFC to support higher education institutions as they navigate financial difficulties.

According to the government, the new funding brings the total additional support for the sector up to £25 million, on top of the £1.1 billion in the 2025-26 budget for university teaching and research, and adds to work already underway by the SFC, which engages closely with universities on financial sustainability.