Tertiary Education and Training (Funding and Governance) (Scotland) Bill - Business and Regulatory Impact Assessment (BRIA)

Executive summary

Issue and why it needs to be addressed

2. The primary purpose of the Bill is to simplify the funding body landscape for tertiary education and training in Scotland. Currently, three public bodies are involved with funding tertiary education and training. This has led to a number of challenges:

• three competing funding models causing duplication and inefficiency;
• existing structures make it hard to collaborate for public bodies and institutions;
• it is hard to gather system-wide data and evidence; and
• existing structures make it more difficult to deliver improvement.

Intended outcomes

3. By bringing responsibility for securing and funding all forms of tertiary education and skills provision together at the Scottish Funding Council (“the SFC”), the Bill aims to:

• deliver better services for learners and employers;
• simplify the operating environment for colleges, universities, training providers and employers; and
• ensure best value from our public funds.

Options

4. Legislation is required to consolidate all provision funding (meaning funding for organisations to provide education and training) within the SFC because the SFC needs to be given new statutory functions in respect of National Training Programmes (“NTPs”), apprenticeships and work-based learning. As far as the Bill is concerned, the overarching question was whether to continue with business as usual (i.e. no change and no legislation) or whether to legislate to make this change. (Other changes in respect of responsibility for provision of student support do not require legislation.)

5. The Bill also provides the opportunity to make improvements to aspects of the SFC’s governance arrangements and its wider responsibilities.

6. Given the decision to proceed with legislation, there are a number of follow-on options which are explained in more detail later in this BRIA and the accompanying documents for the Bill.

Sectors affected

7. The provision in the Bill primarily affects the SFC and, indirectly, Skills Development Scotland (“SDS”). This includes their functions, staffing and resourcing. In addition, there are four other groups of stakeholders affected:

• higher education institutions (including universities) and colleges;
• training providers (of apprentices and work-based learning);
• employers (of apprentices), noting that these may be public or private sector organisations; and
• private providers of higher or further education (in relation to the designation process for student support).

Engagement completed, ongoing and planned

8. The Post-School Education and Skills Reform: Consultation on legislation^[1] ran as an open public consultation from 25 June to 20 September 2024. The report on the consultation was published on 22 January 2025.

9. There has been extensive and ongoing engagement with the SFC, SDS and the Student Awards Agency Scotland (SAAS), as the three principal public bodies affected. As part of developing the provision in the Bill, there have been follow-up conversations with the SFC, SDS and the Scottish Apprenticeship Advisory Board (“SAAB”) Short-Life Working Group on apprenticeship definition. The reform programme has put in train a series of employer engagement sessions with the Minister for Higher and Further Education and sector representatives; this is ongoing and will continue through implementation.

10. There will be further consultation on the development of subordinate legislation and on the detail of implementation, subject to the will of the Scottish Parliament and the decisions of a future Scottish Administration.

Anticipated impacts and mitigating actions

11. The Bill is expected to enable significant positive changes to the efficiency and effectiveness of the delivery of National Training Programmes, apprenticeships and work-based learning. The Bill, of itself, does not have a significant impact on business. It will be how the powers are used (which will be the subject of future impact assessments) which will be significant. That said, the Bill provision offers potential benefits through: allowing for flexibility and innovation in the evolution of apprenticeship policy and delivery, including a more efficient and streamlined set of processes; new provision for apprenticeship certificates; and a mechanism for businesses to request new or revised apprenticeship frameworks.

Enforcement and compliance

12. The Bill imposes new statutory duties on the SFC and some businesses. However, the Bill does not make provision for any penalties (such as fines or criminal offences). The SFC may also attach conditions of grant or contract to further support compliance with the terms of the legislation. Furthermore, the Bill gives the SFC the power to issue guidance to which businesses must have regard in the carrying out of their particular funded activities.

Implementation plans

13. Subject to the will of the Scottish Parliament, it is anticipated that the Bill will receive Royal Assent in spring 2026. The modelling in the Financial Memorandum assumes that all the provisions in the Bill will come into force on 1 October 2026. However, to implement the Bill in full will require significant work to develop the detailed policies, procedures and subordinate legislation. Much of this will require consultation and engagement with stakeholders. In parallel, there are complex administrative preparations required to move the staff, assets and systems needed to deliver the apprenticeship programme from SDS to the SFC. A detailed implementation timetable will be developed which is likely to prioritise certain Bill provision and subordinate legislation for implementation in 2026 and set out the remaining steps to give full effect to the legislation.

Evaluation and monitoring of implementation

14. The Bill, implementation and other projects in the reform programme will be subject to review and evaluation to ensure that, collectively, they deliver the intended outcomes. Implementation will be monitored by the reform programme board.

15. The Scottish Government has developed logic models for the Purpose and Principles which provide an overarching assessment framework for evaluation. The Scottish Government has yet to determine the scale and scope of evaluation and this will inform data capture requirements. It will be for the next Scottish Administration to set out how and when these evaluations will be taken forward.