For the Tertiary Education and Training (Funding and Governance) (Scotland) Act, the journey from review to consultation to bill to law has been a long one – but it’s finally complete.
As the dust settles, we can heuristically chop its protracted passage up into three stages according to where the policy focus was.
First came the Withers review and its push to reconfigure the funding body landscape to promote coherence, which resulted in the accumulation of new responsibilities for the Scottish Funding Council, and the corresponding diminution of Skills Development Scotland’s remit in a way that was at times quite fractious.
If you’d responded to the 2024 consultation on funding body reform, you could be forgiven for assuming that this shake-up would have continued to be the central area of prominence as the legislation was introduced. It’s true that plenty of parliamentary time and written evidence was taken up with the mechanics and technicalities of moving staff and capabilities from one arm’s length body to another, but for much of last year the real action wasn’t around the SFC/SDS/SAAS moving parts – rather, it related to questions of sector financial oversight and how the legislation could better speak to these.
Former higher education minister Graeme Dey kicked this phase off last January by musing that the bill could beef up the funding council’s “powers of intervention”. In light of the crisis at the University of Dundee, and emerging issues elsewhere, it became politically tricky to press forward with a bill that could be potentially criticised as rearranging deckchairs (there was no great cross-party love for it – it later squeezed through stage one with support from the Scottish Greens, who explicitly said they wanted it to progress so that they could append stuff to it later).
So when the legislation was published, we got some additional but still fairly tenuous new powers for the SFC. These included greater scope to conduct the investigations known as “efficiency studies”, and the ability to issue written recommendations (possibly publicly, but I wouldn’t hold your breath) and guidance that governing bodies will need to “have regard” to. Plus there will be a responsibility on funded education bodies, including universities, to proactively notify the funding council in the event of “certain developments”. But exactly what these will be is left to secondary legislation – it’s likely to include job cuts and specific financial thresholds, but the process has been left convoluted and it’s clearly not a system that’s going to be springing into action any time soon.
While the desire to use the bill to speak to the government’s job of monitoring the financial health of the system has not gone away, it’s also been clear since the autumn that ministers didn’t want to go too far either, shooting down amendments on issues like governance reform (as well as proposals on executive pay caps, student union funding, and mental health).
Rather, the final run-up to the legislation’s passage at stage three was dominated by both opposition MSPs and the government adding other bits and pieces to the legislation in a series of compromises (we can but speculate on how the reshuffling off of Graeme Dey led to more compromising than might have been the case otherwise).
As a result, the headline measures that the newly passed Act will bring about feel quite distinct from where we were at the start. Let’s take a look how it changed.
A national strategy
The bill’s long title was originally as follows:
An Act of the Scottish Parliament to make provision about the functions and governance of the Scottish Further and Higher Education Funding Council; to make provision about financial support for students in further and higher education; and for connected purposes.
Following stage three, it’s now
An Act of the Scottish Parliament to make provision about a national funding strategy for tertiary education, skills and apprenticeships; to make provision about the functions and governance of the Scottish Further and Higher Education Funding Council; to make provision about financial support for students in further and higher education; and for connected purposes.
You get the sense that the repeated questioning in Holyrood of the need for this legislation – at a time of serious challenges for Scotland’s universities, colleges and apprenticeship system – has played a role here. The Act is now squarely about funding, even if it has done so in a way that leaves the actual content until after the election.
Scottish ministers will now be obliged to prepare a national funding strategy, specifying needs, priorities and outcomes for different aspects of the tertiary system. Consultation with learners, trade unions, employers and education bodies will be mandatory. Regular progress reports are stipulated. In the Scottish Parliament, higher education minister Ben Macpherson said that having a strategy will ensure that funding decisions are based on an “even more robust understanding” of skills needs.
The language of “as soon as reasonably practicable” gives leeway for this to appear after the ongoing Future Framework for Universities project, and to be informed by its findings. Which is not to say that the Scottish higher education sector is necessarily thrilled about it – in the stage three debate, we heard that Universities Scotland has expressed concerns about autonomy. The minister was at pains to stress that for universities the strategy will not direct funding to specific provision.
Fair work, GBV, and access
Last week – a cynic might suggest there was a final push to get the legislation over the line – the Scottish government announced that the bill would enable action on both fair work requirements and prevention of gender-based violence on campus. Something similar happened ahead of the stage two vote, where provisions for data sharing in support of the access agenda were unexpectedly introduced, despite previous indications that the Scottish government was reluctant to take these forward in the current parliamentary session.
The fair work announcement – an agreement between the SNP and the Scottish Greens – will see colleges and universities expected to adopt further Fair Work First criteria by April 2027, including no inappropriate use of zero hour contracts, flexible and family-friendly working practices, and action on workplace inequalities, all of which are currently only encouraged. The announcement to Parliament does note that where a case is made for more time is required for an institution to make the changes, this may well be accepted.
Including a condition of funding around preventing gender-based violence was first proposed at stage two in a slightly different form, supported by campaign group EmilyTest. This didn’t pass, but new Scottish government amendment 29 will enable the SFC to impose a condition of funding on education bodies around the prevention of gender-based violence, both in terms of taking action to prevent gender-based violence against staff and students, and in reporting on action taken. Before issuing guidance, the funding council will be required to consult both campaign groups and education bodies.
All these measures – promoting fair work, enabling data sharing, and preventing gender-based violence – got a shout-out in the minister’s closing speech as among the substantial benefits the bill will bring. All of them have quite a long way to go as well. On the free school meal data sharing question, it’s been widely suggested that the limited nudge the idea gets in the legislation is a long way from ironing out all the technical barriers.
The SFC and its role
During the legislation’s passage the government hinted it was open to renaming the Scottish Funding Council to reflect its expanded role. It hasn’t happened, but Ben Macpherson still told Holyrood he was open to the idea.
Stage three did, however, see amendments to the bill which will see the Scottish Funding Council board expand, with a new maximum size of 16 members appointed by ministers, up from 14. The government also put forward, or accepted, some degree of stipulation on who those board members should be – under pressure from other MSPs – though it ended up couched in the language of “have regard to the desirability of” rather than a prescription. This will now include learner representatives, SFC employee representatives, and education sector staff representatives.
We explored in our original write-up how the legislation seeks to give the funding council new powers, up to a point, to monitor and influence the education bodies it funds (and there’s a summary above). While during parliamentary passage many MSPs sought to push for further duties and means of intervention, the Scottish government largely saw these off, arguing for the importance of university autonomy and the purported risks around Office for National Statistics public sector classification.
But there were a few small changes along the way, for example the insertion of powers for the SFC to secure the carrying out of an independent examination into the financial sustainability or financial governance of an education provider it funds, and the remit of funding council “efficiency studies” has been extended to consider the needs and interests of staff as well as students.
An opposition amendment that will require the SFC to conduct an annual report on the financial sustainability of the further and higher education sector was accepted by the government – some would say the funding council already does this, but now it’s in the legislation. This was made more interesting by a rival opposition amendment which sought to make this an independent review of university financial health (it was suggested that Audit Scotland would take the lead). However, this was shot down.
Apprenticeships and future battles
For all that MSPs have used the bill’s passage as an opportunity to probe the Scottish government’s stewardship of the university sector – and it shouldn’t be underestimated how much the legislation’s eventual form has been shaped by reaction to funding crises and job losses – the issue that has been most prominent throughout Holyrood debate has been about shifts in apprenticeship responsibilities and the wider question of how much funding goes to this kind of post-16 provision.
Amendments requiring the Scottish government to publish an account of how apprenticeship levy consequentials are being spent, or to introduce an apprenticeships guarantee, or ringfence funding, or to specify a commitment to foundation apprenticeships, were all voted down. But the question of Scotland’s level of apprenticeship starts – and how the government deploys levy money, to the extent that it can be said to – has continued to grow in importance as perhaps the pre-eminent attack line on the SNP from opposition parties in post-compulsory education policy.
There’s an important takeaway for the sector here, in how much political pressure is being brought to bear on boosting apprenticeship numbers, rather than university degree places. It’s already an argument the sector is trying to get ahead of – an article from Universities Scotland today makes the case that universities want to do more in the graduate apprentice space, and are being held back by a lack of flexibility.
The tertiary bill, in the form it eventually ended up in, puts new duties on universities, as well as taking some tentative steps which – if followed through in implementation – could contribute to them being better places to work and study in. It also heaps more responsibility for overseeing the disparate parts of the system on the funding council, while introducing reforms to its corporate structure which will inevitably take time to process.
It even, via the last minute changes, commits the next Scottish government to spelling out its approach to funding. But it doesn’t speak to the quantum of that funding, and for universities it’s never been clearer that there exists both growing financial pressures elsewhere in the tertiary space, and growing political pressure to pay attention to areas outwith higher education, an issue that will grow in prominence in a likely more divided and certainly more unpredictable Holyrood after May’s elections.