Dundee University has £22m funding deal approved by the Scottish Funding Council

The Scottish Funding Council (SFC) has approved a £22m support package for Dundee University as the institution attempts to tackle a £35m funding black hole.

A senior university figure had told MSPs that insolvency was a “real possibility” with more than 600 jobs to be cut to save money.

Acting chair of court Tricia Bey said without financial support from the SFC the university would run out of money by the end of June.

The SFC – which is an arms-length public body of the Scottish government – said its £22m package would be a mix of low-cost loans and capital grant.

Its chief executive Francesca Osowska said the council recognised “the significant uncertainty and anxiety that staff and students are experiencing at the University of Dundee”.

She added: “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.”

The university’s interim principal Prof Shane O’Neill told the Scottish Parliament’s education committee on Wednesday he was given the “false assumption” last year that the university was close to breaking even despite having a £12.3m operating deficit at the time.

Prof O’Neill announced last week that 632 jobs would be cut at the university to address the eight-figure deficit.

The head of an independent investigation into the university’s financial situation is expected to be announced this week.