Our financial position

It is still the case that we are in a very challenging financial situation. We are not a going concern, and without substantial additional funding from the Scottish Government, via the Scottish Funding Council, we would not be able to continue to operate beyond this summer.  

That additional funding is not yet in place until the Government and SFC have confidence we have met, or can meet, their intended Conditions of Funding.  

The University has three main areas of expenditure:  

• capital investment (primarily in the estate and in major items of equipment); 
• expenditure on staffing; 
• other operating expenditure (cash expenditure on, for example, heating, laboratory supplies, insurance and marketing). 

There is currently no scope for cutting capital expenditure as this has already been cut nearly to zero; there is currently no expenditure on the estate except for urgent repairs and work related to health and safety.  Not only can we not cut capital expenditure further, we clearly need to increase it over the coming years to maintain, and then improve, our physical and digital estate to meet the demands of teaching and research for the coming decades.  

We have already significantly cut other operating expenditure.  We expect to cut it more, and to keep on doing so, but there is a limit to how much we can do so without major impact on the student experience, our research capacity and our capacity to do business.  

This means that there is expected to be a requirement for a significant reduction in the size of our workforce, building on the establishment of our Faculties and the associated integration of the professional services that is about to begin to allow us operate more efficiently, and on efficiencies in the delivery of academic programmes (some of which have already been realised).

The conditions of funding and the strategy to recovery

The Scottish Funding Council (SFC) has written to the University to present the intended Conditions of Funding that will accompany the additional funding we hope to receive from the Scottish Government.  

The University wrote to the SFC on 23 December 2025 indicating that it would be willing to accept the intended Conditions of Funding.  

As Principal, I welcome the opportunity to engage with staff and students to develop this Strategy to Recovery, to ensure that our community has had opportunity to both understand the institution’s position and to bring their experience and expertise to bear on the process.  

The Conditions of Funding require a three-year Strategy to Recovery. The University Court is about to embark on the process of appointing a new Principal. It is likely that they will be in post by the end of this year and they will lead the University community in developing a new, longer-term strategy.  By this time, our survival will be assured. That new strategy will be broader in range and will give life to the aspirations of the University community over the following five to ten years.  

It follows that the time horizon of the strategy we develop now will in practice be less than three years, and possibly less than two years.  It will be in place until the next strategy is developed and approved.  
 

How do we become financially sustainable?

We need to move as soon as we can to bring our income and expenditure into balance, so that we are again a going concern and can access commercial lending, depending meanwhile on financial support from the Scottish Government via the SFC; this will involve further constraints on operational expenditure while doing what we can to maintain – and, if possible, increase – our income.  

We are already making considerable efforts to raise additional income: through student recruitment; through creating new programmes where these are thought to have good prospects; and in working with partners where this gives us business with a positive margin.  

We have taken the first steps to create the Faculties and are making progress with the integration of Professional Services; our work in these areas will accelerate in the coming weeks.  

We had more than 100 ideas from colleagues as part of the Listening Exercise that we carried out in the autumn.  These are all being considered as we create the Faculties and improve and integrate professional services, and will inform the annual planning round, which is about to begin in late February.  

Any reduction in staffing will be carried out only to the extent necessary to achieve financial sustainability.  But I feel I must say that it is unlikely that the expected income in the future years will be sufficient to avoid a further reduction in staffing, as well as continuing reductions in other operating expenditure.  

This is the current approach to financial sustainability.  Through this exercise, I would like to hear your thoughts about alternatives to this approach, or any additional objectives we should set ourselves, or steps you feel we should take.