Funding available for SMEs to support employee upskilling and reskilling

Eligible employers can use the Flexible Working Development Fund (FWDF) to address priority skills gaps in their organisation by accessing funding to create tailored training programmes with their local college.

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Employers across Scotland can apply for funding to provide upskilling and reskilling opportunities for their existing staff.

The Flexible Workforce Development Fund (FWDF) helps businesses continue to invest in their workforce and is available for all of Scotland’s employers who are subject to the UK Government’s Apprenticeship Levy. For the first time, the fund will now be available for both levy payers and SMEs, across the private, public and third sectors.

In August the Scottish Government announced immediate investment in jobs to provide the foundations for a strong economic recovery from coronavirus (COVID-19). As part of this, the FWDF, which is now in its fourth year, was doubled to £20m for 2020/21, with £13 million made available through the first phase to allow colleges to provide additional support for levy paying employers.

The second phase of the fund, backed by £7 million, will also be utilised to respond directly to the impacts of the pandemic, and will open to applications 16 November 2020.

Of this, £5 million will be available to support SMEs through a college and Open University in Scotland partnership, while Skills Development Scotland will offer a new option which will test the use of private training providers for levy paying businesses who require specialist training.

Business, Fair Work and Skills Minister Jamie Hepburn said:

“Opportunities for training are essential for both employers and employees, and in August we doubled funding for our Flexible Workforce Development Fund to £20 million for 2020/21 to ensure businesses across Scotland can continue to invest in their workforce.

“As this fund adapts and responds to the impacts of the pandemic, we will also see the introduction of additional delivery partners including the Open University in Scotland and private training providers for employers who require more specialist training.

“By strengthening upskilling the existing workforce, in partnership with colleges, we can retain jobs and support employers as they pivot and adapt to a new and very different working environment as a result of the pandemic.”

Andrew McRae, FSB’s Scotland policy chair, said:

“This new funding could help many Scottish smaller businesses, and their staff teams, navigate the current crisis and ensure they’re prepared to take advantage of the recovery when it comes.

“FSB has been making the case to open up this cash pot to local firms, and we’d encourage all sorts of smaller operators to investigate how to access this support to build their business and develop their employees.”

Susan Stewart, Director of The Open University in Scotland, said:

“The Open University in Scotland has led in the development of new skills for those facing redundancy, furlough or sectoral job pressures as a result of COVID-19. We welcome this funding which allows us to deliver support at scale to small and medium sized businesses across Scotland providing vital training as they adapt to new ways of working post pandemic.

“We will help businesses with a tailored, flexible package of online training to boost productivity and upskill and retrain employees particularly in those areas where skills gaps exist across Scotland like business management, digital, health and social care and the green economy.”


The Flexible Workforce Development Fund (FWDF) is an employer led skills initiative.

Levy payers will continue to be able to access £15k of college or private training provider provision (for more specialised training) and SMEs will be able to access up to £5k of college and Open University training.

Find out more about the FWDF through The Open University, Scottish Funding Council, Our Skillforce.

More information on Phase 2 of the FWDF will also be available here shortly.