confused man on a scottish flag

How does apprenticeship funding work in Scotland?

Whether you’re a large employer or an SME, apprenticeship funding can be confusing.

How does apprenticeship funding work in Scotland?

confused man on a scottish flag

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

There are lots of things to think about – loads of rules, regulations, programmes and plans to get your head around. And to make it even worse, different rules apply if you're north or south of the border. It's a minefield.  

So to help clear things up, we've examined some of the most misunderstood policies, and explained how they affect Scottish employers, training providers and apprentices.

The apprenticeship levy  

The apprenticeship levy was introduced by the UK government in April 2017 to raise funds for apprenticeship training directly from employers. It 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.  

The levy was imposed upon Scottish employers without consultation, so the Scottish government has 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.  

How Scottish employers access funding hasn't changed. Apprenticeships continue to be paid for by Skills Development Scotland (SDS) through direct contracts between employers and training providers.

Flexible Workplace Development Fund

In response to the apprenticeship levy, the Scottish government has established a new Flexible Workforce Development Fund. This £10 million fund will pay for workplace training to help Scottish employers upskill and re-skill their staff.  

The fund will be introduced in Autumn 2017, and can be used for a variety of training – from health and safety courses to degree apprenticeships.

Advanced learner loans

Students can apply for an advanced learner loan to help pay for a course at an English college or training provider. There are no credit checks to qualify, but if the course started before 1st August 2016, students must be 24 or over and be completing a level 3 or 4 qualification at an approved college or training provider in England.  

If the course started after August 1st 2016, students must be 19 or over and completing a level 3, 4, 5 or 6 qualification at an approved college or training provider in England. Learner loans are available to all students living in the UK – including Scotland – but can only be used to pay for courses based in England.


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

There's still a couple of policies that need clearing up, and some that are going to be released in the coming months. To learn about these policies in detail, download our A-Z of Scottish apprenticeships. We cover everything you need to know in a handy guide – and you can print it off to share with your staff.

Download A-Z

This article includes research and opinion sourced by OneFile at the time of publication. Things may have changed since then,
so this research is to be used at the reader's discretion. OneFile is not liable for any action taken based on this research.