College Transformation Framework

3. Within the context of a challenging fiscal environment, we have been working via the college Tripartite Alignment Group and sector groups, to identify ways to support a more sustainable college sector. The CTF proposal seeks to support transformation within the financial resources currently available, recognising that we are likely to have challenging budget settlements in future.
4. The key focus of the CTF is to secure a college sector that is front and centre of transformational change towards future financial sustainability, with a flexible funding model and curriculum.
5. By allowing colleges to vary, on a temporary basis, the delivery of credits from the thresholds set during the annual funding round, without impacting their core teaching grant, the CTF provides a mechanism that could be used to support colleges to transition to a more sustainable footing from within existing budgets.
6. The CTF recognises that no additional funding is available by offering flexibility to support college transformation by removing some of their delivery risks.

7. Colleges will be able to flex the credits delivered over an agreed period of transition. The released funding no longer associated with credit delivery should be available for transformation. An example of this is provided in the table below:

8. After the transformation period funding will be adjusted accordingly based on the agreed credit threshold.
9. Although no formal threshold has been set for the maximum number of credits that can be flexed, colleges should consider the learner impact in their proposals.
10. Colleges can choose whether they wish to opt-in to this approach.
11. As the sector is not homogeneous and there continues to be variation between colleges in terms of financial performance, approaches to transformation will differ and will be unique to an individual college.
12. Colleges will have different transformation priorities. These could include the adoption of more cost-effective delivery models, cost reductions or the generation of alternative funding sources. For example, colleges could:

• Consider how best to meet regional need and demand for greater agility, flexibility and responsiveness in the curriculum.
• Look at co-creation of new curriculum to reduce cost and to collaborate to deliver more efficient class sizes in fewer locations.
• Incorporate new delivery models to meet the growing need for people to be work-ready more quickly and so increasing bespoke, fast-track and part-time provision and increasing in-work upskilling and reskilling.
• Consider curriculum transformation to better align the offer to learner/employer needs.
• Transform and deepen industry engagement and investment in the vocational system, whereby colleges could also be developing capacity to access additional sources of funding.

13. There is no typical project, but as a minimum, projects will be expected to deliver cost savings or income generation benefits.Some further examples of potential projects are provided at Annex A. These illustrative examples are by no means exhaustive, and we will welcome submissions of diverse approaches not considered here.
14. It is expected that the average transformation will take two to three years. Failure to demonstrate sufficient transformation engagement or progress may lead to removal from the CTF. Transformation progress will factor into decisions to recover for under-delivery.
15. Funding may be varied each year should there be budget increases, reductions or in-year savings required by the Scottish Government, or changes to the funding model.
16. If a college requests an increase to its credit threshold, consideration may be given to how this impacts on eligibility for the CTF.
17. This is the first request for Expressions of Interest in the CTF and we expect that this process will evolve and be refined as we take account of feedback. Although this is a formal call for Expressions of Interest, colleges will be able to note their interest at any time during the academic year.

18. A two-stage process, outlined at Annex B, is planned.

19. Proposals should:

• Be consistent with strategies set out by SFC, the Scottish Government and the scheme principles noted below:
  • Skilled and enabled workforce: The goal of any changes should be to enable the development and delivery of a skilled and enabled workforce in response to key industry sector demand.
  • Long-term viability: Changes should assist colleges in achieving sustainable operations that will align with future funding pressures.
  • Agility: Through the transition support framework, SFC may provide colleges with the agility to use core funding to meet local opportunities and challenges without exposure to recovery of funds.
  • Accountability: Colleges must demonstrate accountability for the use of public funds, ensuring all proposals align with clear transformation objectives and measurable outcomes.
  • Planned transformation: Transformation should occur at a speed to mitigate disruption, allowing colleges to re-allocate a proportion of credit funding progressively over a defined period.
  • Stakeholder engagement: Maintain strong communication and agreement between SFC, Scottish Government, college leadership and other relevant stakeholders to ensure trust, collaborative alignment and support.
  • Transparency: All proposals and actions should be transparent, allowing for effective oversight, monitoring and adjustment when necessary.
• Advance long-term financial sustainability while delivering a fit for the future college.

20. SFC is inviting Expressions of Interest (EoI) in the CTF for AY 2025-26, which clearly demonstrates senior management support.
21. Colleges are invited to submit a short EoI and should include:

• Contact details.
• A summary of the project including proposed start date, and duration, and an assessment of the impact on the college and its learners.
• Show how the project aligns with key strategies and objectives.
• Status in terms of readiness to proceed in AY 2025-26.
• Identification of delivery risks and how these will be mitigated and managed.
• An estimate of the credit delivery impact by AY.
• A summary of how the project will support the long-term financial sustainability of the institution.

22. Please email submissions to CTF@sfc.ac.uk.
23. SFC would welcome early discussion around potential proposals. Please contact CTF@sfc.ac.uk if you would like to arrange this.
24. EoIs will be considered on a case-by-case basis and a call will be arranged to discuss the proposals in more detail. SFC will need to consider the regional and national impact as part of the evaluation process.
25. For those EoIs endorsed, SFC will arrange an initial meeting to agree on the next steps, which will include the completion of a standardised application form or submission of a more detailed transformation plan.

26. Aside from contact details, no personal data should be included as part of your expression of interest submission and care should be taken to ensure that the identities of individuals are not inadvertently disclosed. For more information about how SFC uses personal data please see our Privacy Notice.

27. If you would like any further information, please contact CTF@sfc.ac.uk.

Francesca Osowska
Chief Executive