Tertiary Education and Training (Funding and Governance) (Scotland) Act 2026

Part 1 — National funding strategy

National funding strategy

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• (1) The Scottish Ministers must prepare a national funding strategy for tertiary education, skills and apprenticeships.

• (2) The strategy must set out—

• (a) the Scottish Ministers’ view of skills needs in Scotland, including in different localities within Scotland,

• (b) the Scottish Ministers’ priorities for funding further education and higher education, programmes of training for employment, Scottish apprenticeships and work-based learning,

• (c) the outcomes which the Scottish Ministers are seeking to deliver through funding those activities, and

• (d) such other information as the Scottish Ministers consider appropriate.

• (3) In subsection (2)—

• “further education” means a programme of learning which falls within section 6 of the Further and Higher Education (Scotland) Act 1992,

• “higher education” has the meaning given by section 38 of that Act,

• “programmes of training for employment” means programmes for which grants are to be made under section 12C(1) of the 2005 Act,

• “Scottish apprenticeships” has the meaning given by section 12E(1) of that Act,

• “work-based learning” has the meaning given by section 12I(2) of that Act.

• (4) The Scottish Ministers must, as soon as reasonably practicable after this section comes into force, publish the strategy and lay it before the Scottish Parliament.

• (5) The Scottish Ministers—

• (a) may, from time to time, revise the strategy, and

• (b) must, as soon as reasonably practicable after doing so, publish any revised strategy and lay it before the Scottish Parliament.

• (6) In preparing or revising the strategy, the Scottish Ministers must consult—

• (a) the Council,

• (b) The Skills Development Scotland Co. Limited,

• (c) employers and prospective employers of apprentices,

• (d) the post-16 education bodies (within the meaning given by section 35(1) of the 2005 Act),

• (e) training providers (within the meaning given by section 12J(3) of the 2005 Act),

• (f) representatives of any trade union (within the meaning given by section 1 of the Trade Union and Labour Relations (Consolidation) Act 1992) which appears to the Scottish Ministers to be representative of the interests of apprentices,

• (g) education authorities (within the meaning given by section 135(1) of the Education (Scotland) Act 1980),

• (h) learners and persons who appear to the Scottish Ministers to represent the interests of learners, and

• (i) such other persons as the Scottish Ministers consider appropriate.

• (7) The Scottish Ministers must—

• (a) from time to time, prepare a report on the progress being made in delivering the outcomes set out in the national skills funding strategy, and

• (b) publish the report and lay it before the Scottish Parliament.

Part 2 — Functions of the Scottish Further and Higher Education Funding Council

General duties of the Council and the Scottish Ministers

General duty of the Council to secure high-quality learning

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• (1) The Further and Higher Education (Scotland) Act 2005 is modified as follows.

• (2) In section 3 (the Council: general duty), for the words from “securing” to the end substitute

securing— (a) the coherent provision (as a whole) of— (i) a high quality of fundable further education and fundable higher education by the post-16 education bodies, and (ii) a high quality of Scottish apprenticeships and work-based learning, and (b) the undertaking of research among the post-16 education bodies.

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General duty of the Scottish Ministers to support delivery

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• (1) The 2005 Act is modified as follows.

• (2) In section 4 (the Scottish Ministers: general duty), for subsections (1) and (2) substitute—

(1) It is the duty of the Scottish Ministers to provide support for— (a) the provision of— (i) fundable further education and fundable higher education by the post-16 education bodies, and (ii) Scottish apprenticeships and work-based learning, and (b) the undertaking of research among the post-16 education bodies. (2) The Scottish Ministers are to do so— (a) by— (i) making grants to the Council under sections 9, 10, 12C or 12I, and (ii) such other means as they consider appropriate, and (b) to such extent as they may determine. (3) When exercising their duty under subsection (1), the Scottish Ministers must have regard to the need for provision to address current and future economic needs.

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Review of credit-based funding model

Review of credit-based funding model

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• (1) The Scottish Ministers must, within 12 months of this section coming into force, undertake a review of the credit-based funding model used by the Council for making payments to—

• (a) colleges of further education,

• (b) any other providers of fundable further education.

• (2) The review undertaken under subsection (1) must consider the provision of fundable further education, including—

• (a) the availability of courses provided across Scotland,

• (b) the ability of providers of fundable further education to deliver courses.

• (3) After completing the review, the Scottish Ministers must publish and lay a report on the review before the Scottish Parliament.

• (4) The report must set out the action, if any, the Scottish Ministers intend to take as a result of the review.

• (5) In this section, the following terms have the meaning given by section 35(1) of the 2005 Act—

• “colleges of further education”,

• “fundable further education”.

Conditions of funding

Duty to place conditions on funding: transparency

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• (1) The 2005 Act is modified as follows.

• (2) In section 9A (higher education institutions: good governance)—

• (a) the existing text becomes subsection (1),

• (b) after subsection (1) insert—

(2) For the purposes of subsection (1), principles of governance which constitute good practice in relation to higher education institutions includes, in particular, having regard to the need to operate in a way which is transparent and accountable.

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• (3) In section 9B (further education institutions: good governance), after subsection (2) insert—

(3) For the purposes of this section, principles of governance which constitute good practice in relation to colleges of further education, or which are appropriate in relation to a regional strategic body, as the case may be, includes, in particular, having regard to the need to operate in a way which is transparent and accountable.

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Duty to place conditions on funding: conflict of interest

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• (1) The 2005 Act is modified as follows.

• (2) After section 9E insert—

(9F) (1) The Scottish Ministers must, under section 9(2), impose a condition that the Council must, when making a payment to a fundable post-16 education body under section 12(1), require that the fundable post-16 education body has in place a conflict of interest policy that— (a) requires each member of its governing body and each senior officer to declare any registerable interest, (b) requires that a member of its governing body or senior officer withdraws from any meeting or decision-making process where they have a conflict of interest, (c) ensures that the fundable post-16 education body has a register of interests that is— (i) publicly accessible online, (ii) updated within 28 days of any change, and (iii) reviewed on an annual basis. (2) For the purposes of subsection (1), a registerable interest includes— (a) financial interests, (b) shareholdings, (c) remunerated consultancies, (d) intellectual property interests, and (e) close family relationships with contractors or commercial partners. (3) The Scottish Ministers may by regulations amend the list of registerable interests in subsection (2).

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Duty to place conditions on funding: whistleblowing

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• (1) The 2005 Act is modified as follows.

• (2) After section 9F (as inserted by section 6(2)) insert—

(9G) (1) The Scottish Ministers may, under section 9(2), impose a condition that the Council must, when making a payment to a fundable post-16 education body under section 12(1), require that the fundable post-16 education body has in place a whistleblowing procedure that— (a) is clearly communicated to all staff, students and members of the governing body of the fundable post-16 education body, (b) provides for the confidential reporting of concerns relating to issues including— (i) financial mismanagement, (ii) failure of governance, (iii) bullying or retaliation, (iv) risks to learner provision, and (c) provides protection against detriment (as a result of raising concerns) to individuals who raise concerns in good faith. (2) A fundable post-16 education body must notify the Council when it has received information through its whistleblowing procedure that suggests a material risk to continuity of learner provision or financial sustainability. (3) A notification under subsection (2) may be made on a confidential basis. (4) On receipt of a notification under subsection (2), the Council must— (a) consider whether any action or support is required as a result of the notification, (b) record any actions taken or support provided.

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• (3) In schedule 1, paragraph 18, after sub-paragraph (1) insert—

(1A) A report under sub-paragraph (1) must include an anonymised summary of the notifications received during the financial year under section 9G(2), including— (a) the number of notifications received, (b) the nature of the concerns raised, (c) any themes arising across the notifications.

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Duty to place conditions on funding: engagement with trade unions, students and external partners

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• (1) The 2005 Act is modified as follows.

• (2) After section 9G (as inserted by section 7(2)) insert—

(9H) (1) The Scottish Ministers must, under section 9(2), impose a condition that the Council must, when making a payment to a fundable post-16 education body under section 12(1), require that— (a) the fundable post-16 education body takes reasonable steps to inform and consult the persons mentioned in subsection (2) before implementing any decision that could significantly impact its— (i) provision for learners, (ii) levels of staffing, or (iii) financial sustainability, (b) the fundable post-16 education body must, where requested by the Council, submit a report to the Council in relation to a decision on— (i) the persons consulted, (ii) the issues raised by the persons consulted, (iii) whether and, if so, how the issues raised by the persons consulted were addressed, (iv) if the issues raised were not addressed, the reasons for not doing so. (2) The persons include— (a) recognised trade unions representing employees of the body, (b) organisations representing students of the body, (c) any external partners which may be impacted by the decision.

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Duty to place conditions on funding: prevention of gender-based violence

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• (1) The 2005 Act is modified as follows.

• (2) After section 9H (as inserted by section 8(2)) insert—

(9I) (1) The Scottish Ministers may, under section 9(2), impose a condition that the Council must, when making a payment to a fundable post-16 education body under section 12(1), require the body to— (a) take action— (i) to prevent gender-based violence against its students and staff, and (ii) to provide support for its students and staff who are experiencing or have experienced gender-based violence, and (b) prepare and publish, as soon as reasonably practicable after the end of each academic year, a report setting out— (i) the action it has taken under paragraph (a) over the previous year, and (ii) the action it intends to take under paragraph (a) over the next year. (2) Where the Council imposes requirements on fundable post-16 education bodies by virtue of this section, it must publish those requirements. (3) The Council must issue guidance to fundable post-16 education bodies on compliance with requirements imposed by virtue of this section, including on what constitutes gender-based violence for the purposes of this section. (4) Before issuing guidance under subsection (3), the Council must consult— (a) the Scottish Ministers, (b) fundable post-16 education bodies, (c) persons the Council considers to be representative of organisations campaigning for the prevention of gender-based violence, and (d) such other persons the Council considers appropriate.

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Funding for national training programmes

Funding for national training programmes

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• (1) The 2005 Act is modified as follows.

• (2) In section 11 (administration of funds), in subsection (2)(b), after “purposes” insert “, except any funds made available to it under section 12C”.

• (3) After section 12B insert—

(12C) (1) The Scottish Ministers may make grants to the Council for the purpose of securing the delivery of programmes of training for employment. (2) A grant made under subsection (1) is subject to such terms and conditions as the Scottish Ministers consider it appropriate to impose. (3) Terms and conditions imposed under subsection (2) may, in particular, require— (a) that a specified programme is to be secured, (b) that a programme to achieve a specified outcome is to be secured, (c) that a programme directed at specified persons or specified descriptions of persons is to be secured, (d) that, when making a payment to any person under section 12D, the Council is to impose a specified condition. (4) The Scottish Ministers must— (a) publish terms and conditions imposed under subsection (2), together with the reasons for considering them appropriate to impose, or (b) if they consider it would not be appropriate to publish terms and conditions imposed under subsection (2), publish a statement of their reasons for considering it would not be appropriate to do so. (5) In subsection (3), “specified” means specified in the terms and conditions. (12D) (1) The Council is responsible for administering all grants made to it under section 12C for the purpose of securing the delivery of programmes of training for employment. (2) The Council may make grants, loans or other payments to any person for the purpose of the delivery of programmes of training for employment. (3) A payment made under subsection (2)— (a) may be subject to such terms and conditions as the Council considers it appropriate to impose, which may, in particular, relate to— (i) the repayment (in whole or in part) of a payment in such circumstances as the Council may specify, (ii) the interest payable in respect of any period during which a sum due to the Council is outstanding, but (b) must be subject to any terms and conditions imposed by the Scottish Ministers by virtue of section 12C.

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Scottish apprenticeships

Scottish apprenticeships

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• (1) The 2005 Act is modified as follows.

• (2) After section 12D (as inserted by section 10(3)) insert—