from the principal ....

As the University celebrates its 40th Anniversary we can take great pride in its record of excellence in learning and teaching and its reputation for discovery and innovative research. The University has helped define the City of Dundee and contributed to the wider development of Scotland - promoting the two way flow of people and ideas between the academic environment and the wider economy. Through these four decades the context in which we have been operating has been constantly shifting and the University has shown an ability to adapt to different circumstances whilst holding on to its core values of academic excellence. This resilience is about to be tested again over the next few years which will be defined by the continued globalisation of higher education, a much more competitive research environment, collaborative working between disciplines and institutions and an even stronger emphasis on maximising the economic impact of higher education.

The hard facts are that in 2005/6 University income increased by 5.8% and expenditure by 7.6%. The key pressure points are inadequate research overhead recovery, increases in utility costs and substantial increases in staff costs. Without action this gap will simply get wider. For example, in the period 2006-9 the combined effects of the national pay award, pensions costs and higher utility bills will be £10m more than we budgeted for in the spring of 2006. The Institute of Fiscal Studies' assertion that there will be "a step down in the rate of increase" of public spending means that we cannot rely on growth in our traditional income streams to tackle these issues. We simply have to reduce costs and generate more income from our own educational and research activities.

This is the stuff of the Sustainability Review which was set up to ensure the long term financial stability and sustainability of the University. This will highlight weaknesses in the University economy which have to be tackled if we are to achieve greater financial stability and the flexibility to invest in academic excellence for the future. It has been said that our capital programme has been over-ambitious in recent years but this does not stack up. Our building stock was badly neglected and students and staff - the lifeblood of the University - were quite rightly demanding improvements. For every £1 the University has invested in capital it has attracted £1.25 from outside - money we would not have attracted otherwise. More importantly the investment in buildings and facilities such as the Sir James Black Centre (£20m) has already levered in research grants of more than £30m. On a smaller scale it is a similar story for civil engineering, the UNESCO water law centre, the health informatics centre and the new computing school in the Queen Mother Building. And as the sustainability group point out there is still much to do to make the City and Ninewells campuses fit for the 21st century.

The sustainability group has put a spotlight on the requirement to generate resources of 3% of turnover per annum to support new academic initiatives and sustain reasonable levels of capital investment and long term maintenance. This will lead to reductions in some of our existing academic activities and exacting income targets. On the other side of the equation the University is benefiting from national policies on research pooling and we are likely to see ringfenced investment for additional posts in a number of disciplines including engineering, geography, economics, life sciences and medicine. We are having to change our size and shape quite markedly without stopping to take breath.

The University faces significant change over the next 2-3 years and some tough choices about priorities and future academic strategy. Every effort will be made through this period to ensure that we continue to advance our education and research mission, that the interests of our students are protected at all times and that staffing issues are handled in a fair and transparent way. As we move beyond 40 we cannot be complacent or become stuck in the past - we have to face reality and build for the future.

Alan Langlands
Principal and Vice-Chancellor