A vice-chancellor who spent £1,600 of the university’s money on relocating his pet dog has warned staff of potential job cuts amid a budget deficit of more than £15m a year.

Professor Max Lu, vice-chancellor of the University of Surrey, has told staff compulsory redundancies could not be ruled out, prompting fears among academics that their jobs could be lost.

The email from Professor Lu, one of the best paid university bosses in England, says Brexit uncertainty, an increasingly competitive market to recruit students, and rising pension costs have led to a black hole in finances.

His warning comes as universities across the country are planning to make job cuts amid multimillion-pound budget deficits, with fears that a no-deal Brexit and a potential cut to fees could make things worse.

The email, sent to staff on Monday, warns: “We have to prepare for a shortfall between income and expenditure of at least £15m per year for the next few years.”

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Yet figures showed this month showed that the university awarded Professor Lu a pay rise of £5,000 in 2018, bringing his salary up to £364,000.

The vice-chancellor’s remuneration package also rose to £419,000 last year, the Office for Students data shows, despite a crackdown on the high pay of university leaders.

An academic at the University of Surrey, who wished to remain anonymous, told The Independent: “There hasn’t been much transparency on senior pay. There are concerns that they might be significantly higher than what ordinary staff may be receiving.”

On the financial situation, the academic added: “People are concerned about the eventual possible compulsory redundancies. At the moment, there have been no compulsory redundancies announced but people are worried that it may develop into that situation.

“We hope staff won’t be the first call for saving money.”

Meanwhile, Channel 4’s Dispatches last year revealed the university paid £1,600 to Professor Lu to bring his maltese dog over from Australia in 2016 as part of a £15,000 relocation expenses claim.

A University of Surrey spokesperson said: “The university sector as a whole is facing unprecedented challenges, some more certain in timing and magnitude than others, and we are not immune from these. They include the implications of Brexit, the Augar review of university funding, and recruitment challenges across the sector.

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“These challenges mean that, without action, our expenditure is forecast to exceed our income. We are taking appropriate and considered actions across the university in order to balance income and expenditure, while continuing to achieve our strategic goals, and to prioritise our focus on providing the best possible teaching experience for our students.

“This will include reductions in staffing levels delivered through a recruitment freeze and an enhanced voluntary severance scheme. While we can never rule out the possibility of compulsory redundancies, we will seek to avoid these wherever possible.”

The announcement comes amid concerns about financial difficulties at universities, with reports that at least three are on the brink of bankruptcy.