How does apprenticeship funding work in Scotland?

Whether you're a large employer or an SME, in Scotland or in England, apprenticeship funding can be confusing. 

You'll need to get your head around loads of rules, regulations, and programmes. And there are different rules depending on whether you're based in Scotland or England.  

Now the team at Onefile have broken down the 'Must Know' aspects of apprenticeship funding in Scotland - so everyone from apprentices to training providers and employers can see how they're affected.  

The apprenticeship levy  

The UK government introduced the apprenticeship levy  in 2017, so that employers directly contribute funds towards apprenticeship training.  The levy affects all UK employers with an annual wage bill over £3 million, who now have to contribute 0.5% of their wage bill to the levy.   

It was imposed upon Scottish employers without consultation, so the Scottish government decided to relax the rules a little. Unlike English employers, who can only spend their levy on apprenticeship training, Scottish employers can use the funds to pay for a range of vocational training programmes.   

Apprenticeships continue to be paid for by Skills Development Scotland (SDS) through direct contracts between employers and training providers. 

Winding down the Flexible Workplace Development Fund 

Initially, the Scottish government established a £10 million  Flexible Workforce Development Fund to pay for workplace training to help Scottish employers upskill and re-skill their staff.  It was to be used for a variety of training - from health and safety courses to degree apprenticeships. 

But following the Scottish Budget 2024 to 2025 announcement, there will be no funding available for FWDF in academic years 2023-24 and 2024-25. 

Questions remain about future funding but the Scottish Funding Council has reaffirmed its committed to supporting an education and skills system that responds to the needs of Scotland's learners and employers. They plan to work with apprentices, colleges, training providers and employers to build on great work delivered so far.

Funding for Apprenticeships in Scotland 

Modern Apprenticeships  

Skills Development Scotland (SDS) contributes to the costs of training and assessing Modern Apprentices. 

In most cases, SDS pays learning providers to deliver the apprenticeship - but it sometimes pay employers direct so they can pay suppliers to deliver these services. Learning providers may also ask for extra contributions to fund apprenticeship programmes.  

It's a good idea to explore more than one funding option to find the best fit for your business. That's because funding levels depend on the apprentice's age, qualification level and chosen sector. In addition, SDS also makes enhanced funding contributions for people who are disabled and care-experienced, up to and including age 29. 

Graduate Apprenticeship funding 

Graduate Apprentice learning costs are funded by the Scottish Funding Council and Student Awards Agency Scotland (SAAS). Funding covers the full duration of the programme. 

Graduate Apprentices apply directly to SAAS for the funding. 

Foundation Apprenticeship funding 

There's no cost for employers taking on Foundation Apprentices, because the apprentices are still at school. 

So, there you have it; Scottish apprenticeship funding explained... well, almost.  

It's worth downloading our A-Z of Scottish apprenticeships . We cover everything you need to know in a handy guide below.