Scottish Government agency would be scrapped under £3bn spending shake-up for universities and colleges

The Students Awards Agency Scotland could be scrapped under plans to overhaul the way the Scottish Government spends more than £3 billion on universities, colleges and apprenticeships.

It was announced on Tuesday that ministers are consulting on two options for a shake-up of the Scottish Funding Council (SFC), Skills Development Scotland (SDS), and Students Awards Agency Scotland (SAAS).

One of the proposals would involve the “dissolution” of SAAS, with the SFC assuming full responsibility for all further and higher education student support and funding.  

Alternatively, SAAS could remain and take over all college student support funding and functions from the SFC, which would instead be handed responsibility for national training programmes from SDS. Any changes could be in place for the start of the 2026/27 academic year.

The Government has said students are unlikely to experience any direct impacts, but the reforms “do create the conditions for future changes to the way that the system is funded”. Consultation documents also show staff at the three organisations could be impacted, with some potentially moving to different agencies.

Benefits cited include more flexibility in delivering apprenticeships, and the potential for “parity” of support for students at university and college, with those in further education currently unable to access the same level of means-tested bursaries and loans.

The proposals are a key part of the Government’s programme for education reform, with ministers already proceeding with plans to replace the Scottish Qualifications Authority and the creation of a new inspectorate of schools.

James Withers, a consultant who previously served as chief executive of Scotland Food & Drink, was appointed to lead the review into the future of the “post-school skills landscape”, which receives around £3.2bn of public investment each year.

His report was published a year ago, and ministers had already said they expected to take forward “pretty much everything” he recommended.

Mr Withers described finding a “landscape of tensions” in the way the skills are delivered, with agencies “battling to secure their roles and advocate for their distinct parts of the system rather than working in collaboration, with a focus on the user, to deliver effective, efficient and joined-up public services”.

As part of his recommendations, he proposed establishing a single national funding body to bring together the responsibility for funding of apprenticeships and training overseen by SDS, with the functions for dispensing funding to colleges and universities currently carried out by the SFC.

He said ministers should consider whether the new body should also include responsibilities undertaken by SAAS, which is in charge of all higher education student support across both colleges and universities, including assessing applications for fees, loans, grants and bursaries. The Government’s proposals do not appear to envisage the creation of a “new body”, with SFC remaining in place under both scenarios, although with an altered remit.

Graeme Dey, the further and higher education minister, said: “Over the past decade, the funding system has become increasingly fragmented with multiple bodies involved in different aspects of provision.

“We are facing the most challenging public spending climate since devolution, and it is vital that investment delivers the greatest impact to support learners. To do that, we must reduce complexities and the options being set out today are an important step towards this.”