College Bursaries Move While Apprenticeship Funding Stays at SDS

Scotland moved college bursary administration to the Student Awards Agency Scotland on 1 August 2026, while apprenticeship funding remains at Skills Development Scotland until 1 April 2027. The January 2025 announcement had aimed at autumn 2026 for both shifts, and the £3 billion a year tertiary skills budget still runs through three public bodies.

Higher and Further Education Minister Graeme Dey said then that ministers wanted “a world-class skills system to meet the demands of the changing economy” and “greater clarity around the roles and responsibilities of each funding body.” The Act is now law. Only one of the two money moves has gone live.

College Bursaries Changed Hands on 1 August

SAAS announced that further education student support functions transferred from the Scottish Funding Council on 1 August 2026, in time for academic year 2026 to 2027. The agency called it the first part of the Post-School Education and Skills Reform programme to be implemented, and a Programme for Government commitment.

The delivery model did not change. College students still apply to their own college for bursaries and other further education support. Colleges now liaise with SAAS on those 2026 to 2027 awards, rather than with the Funding Council. SFC’s own student-support page, updated the same day, points colleges to SAAS and to Student Information Scotland for the new guidance.

That transfer did not need a Bill. Existing powers under the Education (Scotland) Act 1980 already let ministers choose who administers student support, so SAAS could pick up the college side beside the higher education awards it already runs. For a student, the logo on the guidance changed. The counter they walk up to did not.

April 2027 Is the New Apprenticeship Date

The bigger move, the one that needed legislation, is still ahead. Ministers’ January 2025 post-school funding plans put national training programmes and apprenticeships on a path from SDS to SFC in autumn 2026. The financial memorandum published with the Bill even modelled a 1 October 2026 start, halfway through financial year 2026-27.

By the time the Bill reached the chamber, the Programme for Government 2025 to 2026 had already recast the promise as “consolidating apprenticeship funding within the Scottish Funding Council by March 2027.” A ministerial letter in March 2026 then fixed the operating date: SFC takes on apprenticeship and work-based learning functions from SDS on 1 April 2027. Live contracts are due to be novated then. SDS is still the contract holder for 2026-27. It issued updated Modern Apprenticeship programme conditions from 1 April 2026 and an August 2026 contribution table.

THE REFORM TIMETABLE

1. 7 June 2023: James Withers publishes Fit for the Future, the independent review of the skills delivery landscape, and calls for one national funding body.
2. 22 January 2025: Ministers confirm that national training programmes and apprenticeships will move from SDS to SFC, and further education student support from SFC to SAAS, with an autumn 2026 target.
3. February 2025: The Tertiary Education and Training (Funding and Governance) (Scotland) Bill is introduced at Holyrood.
4. 20 January 2026: MSPs pass the Bill.
5. 11 March 2026: The Bill receives Royal Assent and becomes an Act.
6. 1 August 2026: SAAS takes over further education student support for academic year 2026 to 2027.
7. 1 April 2027: SFC is due to take national training programmes, apprenticeships and work-based learning from SDS.

Until that April date, the split on the ground is the one the 2025 announcement was meant to end. SFC already funds teaching at colleges and universities, plus a slice of foundation and graduate apprenticeships. SDS still runs Modern Apprenticeship contracts and a share of the other apprenticeship routes. SAAS now holds both further and higher education student support.

WHO HOLDS THE MONEY

Foundation apprenticeships stay dual-funded until the novation. The Scottish Government has said there will be no detriment to that senior-phase offer, which the Act treats as work-based learning rather than as a “Scottish apprenticeship” in the new statutory sense.

What the New Act Puts on the Funding Council

The Tertiary Education and Training (Funding and Governance) (Scotland) Bill became an Act on 11 March 2026, after MSPs passed by 75 votes to 46 on 20 January 2026. It amends the Further and Higher Education (Scotland) Act 2005 so that SFC, not SDS, must secure and fund national training programmes, Scottish apprenticeships and work-based learning.

Higher and Further Education Minister Ben Macpherson, who took the Bill through Stage 3, said the point was to put apprenticeship money “alongside colleges and universities in the SFC” and to “streamline structures and decision-making.” The Act also does several other jobs that the January 2025 announcement did not spell out.

WHAT THE 2026 ACT CHANGES

• A legal definition: Scotland gets a statutory meaning of a Scottish apprenticeship for the first time, covering modern and graduate apprenticeships, with foundation apprenticeships sitting under work-based learning.
• An apprenticeship committee: SFC must take advice from a new statutory committee so employers, workers and students sit inside funding decisions.
• A national funding strategy: Ministers can set priorities for the redesigned council instead of leaving the split between SDS and SFC to custom.
• A solvency watch: SFC must monitor and report each year on the financial sustainability of post-school institutions.
• Pay and fair work: College and university principals’ pay is to be more transparent, and institutions are expected to adopt more fair work principles.
• Two reviews: The Act requires a review of Modern Apprenticeship contribution rates and a review of the credit-based funding system for colleges.

Widening access to higher education and duties on gender-based violence at colleges and universities were added as the Bill moved. None of that transfers a single apprentice in 2026. The operational switch is still the April 2027 “lift and shift” that the SFC board accepted: move the contracts first, change the model later.

Withers Asked for One New Funding Body

James Withers, former chief executive of Scotland Food and Drink, spent seven months on the skills delivery landscape and reported on 7 June 2023. Fit for the Future made 15 recommendations. The structural ones were blunt. Ministers should take national skills planning back in-house. A single national funding body should take all publicly funded post-school learning and training from SFC, SDS and, potentially, SAAS. SDS should be recast as a national careers service, reaching into schools, colleges, communities and workplaces.

Withers wrote that SDS had done “an excellent job in establishing apprenticeships as a key part of the landscape,” then added that “the same structures that were needed to build this element to the system are now holding it back.” He wanted one funder so university, college, apprenticeship and training money sat in the same pot, with “parity of esteem” between routes.

What Holyrood enacted is a narrower machine. SFC keeps its name. SDS keeps careers, and most of its people. SAAS, which Withers had treated as optional in the merger, is the body that actually went live first, on bursaries. Colleges Scotland’s Andy Witty had already warned in 2025 that the review said “do not cherry pick” and that too much of it was “on the proverbial shelf.”

WITHERS VERSUS THE ACT

SFC already had a foot in work-based learning. Government replies during the Bill said the council funds about 1,200 new graduate apprenticeship places a year and 2,500 new foundation apprenticeships. The Act extends that into Modern Apprenticeships and national training programmes, which SDS built with employers from 2008. SDS chair Frank Mitchell said the agency had “trebled the annual number of Modern Apprenticeship opportunities” and designed Foundation and Graduate Apprenticeships on top.

We are working in collaboration with the Scottish Funding Council to ensure a smooth transition of these responsibilities which protects apprentices, their employers, learning providers and the jobs of staff who deliver Scottish Apprenticeships.

Frank Mitchell, Chair, Skills Development Scotland, 22 January 2026

Mitchell also thanked staff and union partners who had shown “remarkable resilience in the context of significant uncertainty over recent years.” That uncertainty is the part of the 2025 promise that has not closed.

Staff Still Wait on the TUPE Headcount

A ministerial letter on 16 January 2026 put SFC at around 190 full-time equivalent staff as of 2024. SDS had around 1,284 FTE, “the vast majority of whom are careers advisers.” The people in scope for transfer are the apprenticeship and national training cohort, not the careers service.

The financial memorandum first modelled 148.4 to 174.6 FTE moving across. SDS later cut that range to 142.5 to 166.3 FTE on July 2025 data. The lower figure, SDS said, related to 219 people, down from 238 people on the earlier 148.4 FTE count. More than 40 percent of SDS staff work alternative patterns, so headcount runs ahead of FTE. The Public and Commercial Services Union told MSPs in 2025 that the real minimum was probably more than 200 people directly on apprenticeship work, with a wider group still unsure whether skills-planning jobs were in scope.

Audit Scotland reported on 25 June 2026 that the number of staff transferring “remains unconfirmed.” It expected the figure to be finalised by July 2026, with SDS consulting over the summer and pension and TUPE arrangements due by September 2026. SFC received extra resource of £0.8 million in 2025-26 and £2.7 million in 2026-27 to support the transfer. On 8 April 2026 the council said it had committed to an “as is” transfer of specialist colleagues, with “no disruption to learners, providers or employers.”

Mitchell’s line about a smooth transition of these responsibilities is the official joint position. The jobs still sit inside SDS while that process runs. SDS’s own Transform 27 plan already assumed a smaller operating model by 2027, careers-heavy, once the apprenticeship function leaves.

A 10 Percent Lift in Contribution Rates

The Act required a review of Modern Apprenticeship contribution rates. Stage 1 of that review reported in time for the 2027-28 contracts, the first year SFC is due to hold them. On 24 September 2026, Innovation, Technology and Tertiary Education Minister Alyn Smith said providers would see a funding rise 10 percent in 2027-28.

The cash add-on is £8.8 million. It sits on top of about £198 million a year that already supports 25,500 modern apprenticeships, alongside 5,000 foundation apprenticeships and 1,500 graduate apprenticeships. The 10 percent is a rise in the public contribution rates paid to training providers, not a 10 percent increase in the whole £198 million pot. Stage 2 of the review, looking harder at the cost of each framework, is due to start in 2027.

THE APPRENTICESHIP POT

• £3 billion a year: The government’s figure for investment in Scotland’s tertiary skills system across colleges, universities and training.
• 25,500 modern apprenticeships: The volume tied to about £198 million of annual Modern Apprenticeship funding.
• 6,500 other starts: 5,000 foundation apprenticeships and 1,500 graduate apprenticeships funded beside the modern programme.
• £8.8 million extra: The 2027-28 add-on after stage 1 of the contribution rates review.

Training providers had told the review, in confidence, that static rates were not sustainable. Plumbing employers treated the September rise as a first step and said firms still need help to take people on and keep them. The political fight that still draws heat is the number of places, not which logo sits on the contract. In the Stage 3 debate, MSPs were told demand is close to 40,000 apprenticeship places a year. That figure was set against the funded modern total, not against a new SFC target.

So the first SFC-run contract year will open with higher public rates, the same 25,500 modern volume, and a new statutory committee watching. SDS will have just handed the files across.

Audit Scotland Found No Clear Delivery Plan

Auditor General Stephen Boyle’s report on 25 June 2026 said the government’s intentions to reform post-school education and skills lack a clear delivery plan. Progress is slow. The programme has five projects, due across three phases to 2032: simplify the funding bodies; strengthen skills planning; reform the apprenticeship model; review post-school qualifications; improve careers support.

The Act is the milestone in the first of those. Boyle told the Public Audit Committee on 17 September 2026 that it was “perhaps too early to judge whether it will succeed.” Simplification, he said, felt the most advanced. Skills planning had a model but was behind on priority-sector pilots. The detail and timeline for apprenticeships, careers support and qualifications were “not as progressed.”

Tertiary Education Minister Ben Macpherson said after the audit that a refresh of the programme had begun in January 2026 and that parliament would get an update in early autumn. The bursary move in August is the one completed line. The apprenticeship move is still a date in the Joint Implementation Plan SDS and SFC are running through a joint governance group.

On 1 April 2027 the redesigned Funding Council is due to hold teaching grants, national training programmes and every publicly funded apprenticeship route in one place, while SAAS holds student support and SDS keeps careers. That is a tidier map than January 2025 inherited. It is also a year later than the autumn 2026 target Dey stood on, and it is not the new single body Withers drew.

Until then, a college bursary query goes to SAAS, a Modern Apprenticeship contract still sits with SDS, and the £8.8 million rate rise is written for the year after the handover.