£2m hole in accounts is due to error

An unexpected £2 million hole in Northumbria University's accounts has been uncovered during an administrative reorganisation, it emerged this week.

The university, which previously believed it had a surplus on its £100 million-a-year turnover, ruled out impropriety and blamed outmoded spending-control procedures and inaccurate accounting for the error.

The university has reassured staff and students that the books can be balanced. Sean Figgis, head of communications, said: "Any discrepancy of this order is significant, but we are confident we can contain it within one or two years. We are absolutely sure there has been no impropriety, and we do not blame anyone for what has happened."

He said no jobs were under threat but said there would be significant belt-tightening. Planned investments in the university's infrastructure are to be shelved, and Mr Figgis said a full investigation was under way to discover how spending had been allowed to get out of control.

A spokesman for lecturers' union Natfhe said staff had been relieved that no further job cuts were planned, following last year's voluntary redundancy programme, but said there had been cynicism about the university's repositioning strategy, particularly the creation of highly paid posts.

The appointment last year of Kel Fidler as Northumbria's vice-chancellor led to a number of organisational changes designed to improve income generation, and it was decided the role of finance director needed to be expanded. That job is currently vacant and the previous finance director is on sick leave.

Mr Figgis said a less bureaucratic structure was being implemented to enhance efficiency and that new transparent financial controls were being put in place.