U-turn by SNP ministers will save Scottish charity from immediate closure but its future remains in doubt

A funding U-turn by SNP ministers is expected to save Young Enterprise Scotland from immediate closure but its future remains in doubt.

The charity said the move, announced by Deputy First Minister Kate Forbes, would buy it some “breathing space to explore other revenue sources”.

The Scotsman exclusively revealed last week that all 31 staff at the charity had been issued with redundancy notices after its five bids for funding were all rejected.

Bosses blamed the Scottish Government’s failure to honour financial assurances as well as changes to funding methods.

Kate Forbes | Getty Images

The charity was told funding was being pulled while preparations for this year’s courses in schools were at an advanced stage.

Now, Ms Forbes has announced in Holyrood that she has decided to approve £285,000 to run two Young Enterprise programmes this year.

Young Enterprise Scotland chief executive Emma Soanes | Contributed

Responding to the news, Young Enterprise Scotland CEO Emma Soanes said: "We are pleased to have secured emergency funding to cover our costs to date this year.

“Going forward, we have still lost our major income source, meaning there is still a significant impact on the future of Young Enterprise Scotland. 

“We now have some breathing space to explore other revenue sources and build the resilience needed to continue into the future, but obviously we remain bitterly disappointed to have been unsuccessful in securing ongoing support through the Entrepreneurial Education Fund."

The Scotsman understands redundancies are still on the table unless another source of funding can be found.

Ms Forbes announced the U-turn following questions in the Scottish Parliament on Tuesday.

She said: “Since 2022, the Scottish Government has advised Young Enterprise Scotland, along with other stakeholders, that all future entrepreneurial education programmes would be moving to competitive funding.

“That approach is consistent with other entrepreneurial funds, and indeed is in the DNA of entrepreneurship.

“And although Young Enterprise Scotland was not successful in bidding for entrepreneurial fund because of the strength of other applications, many of whom had previously not received Government support, I did this morning meet with the chair and chief executive of Young Enterprise Scotland to update them on the conversations that had already been taking place with officials about additional support, and I have approved the requested £285,000 to run the two programmes that were previously funded by the Scottish Government into this year.

“That will cover expenditure to date for financial year April ‘24 to March ‘25, and Young Enterprise Scotland has confirmed that will ensure the organisation’s ongoing viability.”

Young Enterprise Scotland (YE Scotland) supported more than 18,000 school and college students last year through its programmes, including its flagship Company Programme, which many industry leaders credit with sparking their interest in a career in business.

Around 2,000 pupils from S5 and S6 take part in the Company Programme each year, starting up their own student firm, before running through the key milestones of developing an idea, conducting market research, creating the product or service, promoting that product and ultimately trading it.

Over the past three years, about 1,000 of these pupils have gone on to complete an SCQF Level 6 qualification run by YE Scotland in entrepreneurship, the same level as a Higher.

YE Scotland’s funding has historically come from a combination of a core continuity grant from the Scottish Government, an ongoing pipeline of support from trusts and foundations and, to a lesser extent, support from the private sector.

The grant from the Government has varied over the years, but has typically been between £450,000 and £550,000. Last year it was around £486,000.

The charity, which is giving up its office in Rouken Glen in East Renfrewshire, said the money was delayed in both the 2022/23 and 2023/24 financial years.

In the past financial year, the delay resulted in late submission of the charity’s audited accounts, directly impacting its ability to apply for additional funding.

Up until May this year, based on the historic relationship and positive noises from Government officials about the availability of funding, the charity continued its preparations with schools and colleges for the coming academic year.

However, YE Scotland said it was advised in July the grants would stop with immediate effect, to be replaced with a competitive process. The charity said no consideration had been given to work already under way or any costs incurred up to that point.

Ms Forbes, the economy secretary, then announced in August the creation of the Entrepreneurial Education Pathways Fund, that would offer public and private sector organisations grants of up to £250,000 to deliver new and innovative courses and projects to under-18s.

YE Scotland submitted five bids, which had all been rejected until now, leaving the charity close to collapse.