Exclusive:Scottish Budget: SNP ministers axe funding for celebrated £10m scheme used to train tens of thousands of workers

The Flexible Workforce Development Fund (FWDF) has emerged as another victim of the Budget unveiled by finance secretary Shona Robison on Tuesday.

The Scotsman previously highlighted growing concerns about the future of the funding pot, after the money was not allocated to colleges as planned. It has now been confirmed “this funding will not be available” due to the “unprecedented financial challenges” facing the Government.

The loss of the FWDF represents a fresh blow to colleges, after Budget papers showed their resource grant is set to fall by £58.7m, or almost 8.4 per cent, in the coming year.

Before the Budget, business leaders had warned ministers to think of the “long-term consequences” before any decision was taken to withdraw or cut the “invaluable support” offered by the FWDF.

Since its introduction in 2017, the fund has enabled firms which pay the Apprenticeship Levy, as well as small and medium enterprises, to address skills gaps by utilising training at Scottish colleges, the Open University and independent providers.

The Scottish Government has previously said the FWDF plays a “crucial role” in Scotland’s National Strategy for Economic Transformation.

Under the scheme, Apprenticeship Levy-paying organisations can access upskilling support to the value of £15,000, and non-levy paying SMEs can get up to £5,000.

An independent evaluation of the fund, published in January, found it was “universally considered” by stakeholders to be a “much needed and valued intervention”, leading to a “clear and strong continuing rationale for the fund”.

Around 1,350 unique businesses which pay the Apprenticeship Levy had been supported by 2021, with the number of workers involved increasing from around 9,000 employees in 2017/18 to about 27,000 in 2020/21.

In terms of SMEs, more than 900 firms and more than 2,000 staff had benefited in the same period.

A Scottish Government spokesperson said: "This is the most challenging Budget to be delivered under devolution and minsters have taken decisive steps to ensure Scotland’s public finances remain on a sustainable trajectory. Despite the challenges faced, we recognise the vital work and support colleges provide to the economy and local communities.

"The expenditure budget for colleges in 2024/25 is in line with the funds that are available to the sector this year when all the savings that have been delivered in year are accounted for, such as the Transformation Fund.

“A decision on the Flexible Workforce Development Fund has been communicated and due to the unprecedented financial challenges facing government, this funding will not be available.”

Colin Borland, director of devolved nations at the Federation of Small Businesses, said last month: “The Flexible Workforce Development Fund has proven an invaluable resource over the last several years, giving smaller operators the resources and support to develop and upskill their workforces and provide employment opportunities in their local areas.

"It is essential that as this year’s Budget is drawn up, ministers consider the long-term consequences of losing such vital programmes as the FWDF beyond the short-term savings they can make back this year.”