University department failing to employ Conservative (7)
I believe the answer is:
faculty
'university department' is the definition.
(department within a university)
'failing to employ conservative' is the wordplay.
'failing' becomes 'faulty' (faulty can mean broken or failing).
'to employ' indicates putting letters inside.
'conservative' becomes 'C' (UK political abbreviation).
'faulty' going around 'c' is 'FACULTY'.
(Other definitions for faculty that I've seen before include "mental awareness" , "Memory possibly" , "Talent; uni department" , "Group of university departments" , "part of academic institution" .)