Scotland Training Funding 2026: FWDF and Individual Training Accounts

Scotland funds workplace training through two main routes, and they changed significantly in 2026. Neither works the way employers outside Scotland usually assume, and the newer of the two has narrowed sharply in who it will pay for. If you are mapping a training budget against a national scheme, our CPD course library sets out what is available and how it is certified.

The new Flexible Workforce Development Fund

The Flexible Workforce Development Fund was relaunched for 2026-27, and the version now operating is materially different from its predecessor. It is administered by the Scottish Funding Council rather than Skills Development Scotland, and it is funded through the Scottish Government's Tackling Child Poverty work.

Per the SFC's 2026-27 guidance, the money flows to colleges, which deliver the training. Employers of any size and any sector can apply, public, private or third sector, provided they operate in Scotland and either follow Fair Work practices or commit in writing to working toward them. Levy status does not determine access, which is a change from earlier rounds.

The caps are specific. Each employer may draw up to GBP 15,000 a year, and each eligible learner up to GBP 5,000. Colleges receive a GBP 20,000 baseline each, with the balance of their allocation set by Scottish Child Payment data rather than by standard college funding formulas. The delivery window runs from August 2026 to 31 December 2027, with payments in four instalments and unspent funds recovered at the end.

Who the new fund will actually pay for

This is the part that catches people out. Learner eligibility is tightly drawn. An individual must have an annual income below GBP 33,000 and must also be one of the following: a parent or carer of a child under 18 living at home, under 24, or care-experienced or disabled and under 30.

Colleges are asked to promote the fund to six priority groups: lone-parent families, families with a disabled adult or child, larger families with three or more children, minority ethnic families, families with a child under one, and families with mothers under 25.

In other words, the fund is a child-poverty intervention delivered through workplace training. It is not a general upskilling budget, and a qualified professional on a standard salary will not qualify.

What the fund excludes

The guidance rules out statutory training an employer is legally required to provide, additionality to apprenticeships, compensating parents for lost income or benefits, covering ordinary college funding shortfalls, and supporting full-time students. What it permits is short, employability-focused training that supports career and earnings progression and is relevant to business need. Colleges are asked to make every practicable effort to deliver SCQF-recognised or industry-standard training, and to certificate every participant.

Individual Training Accounts

The second route is Skills Development Scotland's Individual Training Account, which puts a small amount of money in the individual's hands rather than the employer's. SDS's published guidance sets the award at up to GBP 200 towards the cost of learning, for people aged 16 or over who live in Scotland, are in low-paid work or actively seeking work, and have an annual income at or below GBP 22,000 or receive certain benefits.

Those figures come from SDS's ITA marketing guidelines dated July 2020, so confirm the current award and income threshold with SDS before planning around them.

People already in secondary, further or higher education, on SDS-funded training, or on Community Jobs Scotland are excluded. Eligible courses are those offered by an ITA Approved Provider and listed on the ITA database.

Can an external training provider deliver either scheme?

The two routes differ on exactly this point, and it is the question that decides whether a provider can participate at all.

For Individual Training Accounts, yes in principle. SDS states that approved providers include local colleges, universities and private training providers. A provider registers, demonstrates quality-assurance standards for the courses it offers, and once approval is confirmed its courses are published on the ITA database and on My World of Work. Providers are told not to describe themselves as ITA Approved or use SDS branding before that confirmation.

For the new Flexible Workforce Development Fund, the position is less open. The SFC guidance routes funding to colleges and requires colleges to deliver the training, and it does not address whether external or private providers may deliver on a college's behalf. A provider wanting to reach this fund should therefore expect to work through a college partnership rather than contracting directly, and should confirm the position with the relevant college or with SFC.

How Scotland compares with the other UK and Irish routes

Scotland's two schemes are both small-ticket and tightly targeted. That contrasts with the network model next door in Ireland, where Skillnet Ireland co-funds training through industry networks that commission programmes from providers, and with employer-application schemes such as Malta's Investing in Skills where the employer claims a percentage of eligible training cost back.

The practical consequence for a provider is that Scotland is unlikely to be a volume channel on either route. ITAs are GBP 200 awards to individuals on low incomes; the new FWDF is a child-poverty fund delivered by colleges. Both can be worth pursuing, but neither is a route to selling professional CPD to qualified finance staff.

Frequently asked questions

Does an employer need to pay the apprenticeship levy to use the new FWDF?

No. The 2026-27 guidance opens the fund to employers of all types and sizes, and records levy status for monitoring only.

Can the fund pay for mandatory health and safety training?

No. Statutory training that an employer is legally required to provide is explicitly excluded.

Is the FWDF administered by Skills Development Scotland?

Not in this round. The new fund is administered by the Scottish Funding Council and delivered through colleges. SDS runs Individual Training Accounts and Modern Apprenticeships separately.