Public Service Reform initiatives FY 2026-27

6. SFC’s approach throughout this work will be collaborative and ambitious – actively seeking input from stakeholders across the tertiary system and offering robust challenge to maximise the pace and scale of opportunities. SFC plans a variety of approaches to delivering these initiatives. In some cases, we will work with identified sector groupings to specify and procure expertise to take forward an agreed plan.
7. We also want institutions, or groups of institutions, to bring forward their own proposals based on their expertise, strengths and local needs.
8. Alongside this, we will actively convene the sector to explore ideas and shape projects and enable shared thinking across regions and institutions. Collaboration is a core expectation, with a strong emphasis on regional approaches and shared solutions to maximise impact and efficiency.
9. Our funding envelope for this work encompasses both the college and university budgets, including a small amount of capital funding, and therefore projects can address any part of SFC’s remit. Projects will be funded from the relevant budget, but we also invite proposals that take a tertiary approach to deliver system benefit.
10. Our approach is focused on outcomes rather than inputs. We are open to innovation and managed risk where this supports more impactful and faster transformation, and we will draw on expertise from across the tertiary system, the Scottish Funding Council, the Scottish Government and wider UK and international experience.
11. Funding will be allocated via two routes – proposal submission; and commissioned activity, developed in collaboration, including through engagement with Universities Scotland and Colleges Scotland.
12. In three areas we will be inviting applications: diversifying income; modular learning and micro-credentials; and creating shared service models. We may also consider commissioning work in each of these areas.
13. We envisage that the remaining two – (i) developing systems to benchmark costs and identify areas for efficiency and (ii) improving student data systems through a unique learner identifier – will be progressed primarily through commissioned activity. Further information is provided in Annex A.

14. Proposals should demonstrate how funding will drive transformation and innovation, support long-term sector stability, and actively advance the ambitions of public service reform. Proposals may include seed-funded activity that initiates or tests new approaches, provided it clearly contributes to long-term sector stability.
15. The focus of this exercise is on understanding the scale and nature of opportunities for transformation across the tertiary system, over the next three years. We aim to fund a small number of initiatives in 2026-27, however equally this exercise will inform the strategic planning underway by SFC, feeding into Scottish Government’s Public Service Reform agenda.  While proposals over £1m in 2026-27 may be considered, we recommend you contact SFC before submitting a proposal of this scale.
16. The following broad criteria apply:

• Proposals are open to all institutions individually and collectively. Universities will be able to access university‑specific funding, and colleges will be able to access college‑specific funding. We also invite proposals that take a tertiary approach to deliver system benefit.
• Proposals should be consistent with strategies set out by SFC and the Scottish Government and should clearly demonstrate the economic benefit for Scotland.
• Projects should address at least one of the three SFC priorities of diversifying income; modular learning and micro-credentials; and creating shared service models.
• Proposals which demonstrate collaboration, enabling progress, regional delivery, or system-wide benefit, and support delivery of public service reform will be given priority. This collaboration could be with other colleges or universities, or to deliver benefit or enable reform with other public sector organisations. While we will consider exceptions, our expectation is that proposals in general will include at least three tertiary institutions or public sector partners.
• Institutions must demonstrate accountability for the use of public funds, ensuring all proposals align with clear transformation objectives, measurable outcomes, and the wider ambitions of public service reform.
• Proposals and actions should be transparent, allowing for effective oversight, monitoring and adjustment where necessary.
• Projects should clearly set out what can be delivered by 31 March 2027. Proposals may also set out a longer-term vision, including activity and indicative funding requirements beyond this date.
• An institution should submit one main proposal but may also be named in other bids where there are elements of collaboration (and each institution may be referenced in a maximum of three proposals).

Submission deadlines

17. We invite expressions of interest using the outline proposal template at Annex B to
    be submitted by 5pm 21 August 2026. SFC will provide feedback on these by
    7 September, release initial seed funding where appropriate, and agree timing for a full proposal or business case as appropriate. We recognise the pressures that institutions face in developing and agreeing their submissions over the summer period. We are providing a full proposal template now (Annex C) so that applicants can understand the information we will need in due course.
18. Outline proposal and full proposal templates are available at Annex B. Please email proposals to PSR@sfc.ac.uk.

Support and engagement

19. SFC welcomes early discussion around outline proposals. Please contact PSR@sfc.ac.uk if you would like to arrange this.
20. As noted in paragraph 8, SFC will host a webinar and other discussions in August, where stakeholders can explore initiatives, ask questions and discuss their applications with SFC. Details of these sessions will be provided in due course. These sessions are intended to support high-quality, collaborative proposals.
21. Proposals will be considered on a case-by-case basis and, where appropriate, a meeting may be arranged to discuss individual proposals in more detail. SFC will need to consider the regional and national impact as part of the evaluation process, including how proposals enable progress and collaborative delivery.

Funding decisions

22. We will review the initial expressions of interest by 7 September 2026 and communicate our decision. This may include requests to work with other parties to develop a full proposal where the scope of projects overlap. Where proposals cover activity already underway, we will look to convene and shape these further.
23. Where appropriate, seed funding may be released to support the full development of proposals. SFC’s Board will be presented with an overview of the project portfolio in late September, with final funding decisions expected in October 2026.
24. We may not be able to support all proposals. However, we will hold all proposals received and re-engage with the sector should additional funds become available.
25. We will provide details on all the activities being funded under the five PSR Initiatives in due course.

26. Aside from contact details, no personal data should be included as part of your applications 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.