Public Service Reform

These PSR initiatives form part of a programme of stabilisation and transformation across the tertiary system from 2026-27 onwards, supporting and enabling Ministers’ ambitions on Public Service Reform. These initiatives represent foundational transformation, to enable and complement system-wide change being explored through the Future Framework for the Sustainability and Success of Scotland’s Universities and the College Sector of the Future Workstream.

These initiatives form part of a programme of stabilisation and transformation across the tertiary system. While universities are not public bodies, we recognise their vital role in enabling PSR through economic growth and social value.

These initiatives have been informed by Ministerial priorities, ongoing activity to develop SFC’s strategic plan, and ongoing engagement with the sector.

We are seeking proposals across three areas:

• Income growth and income resilience.
• More flexibility through modular learning and micro-credentials.
• Shared services, centralised services and new operating models.

Scottish Ministers and the Scottish Parliament approved an uplift to SFC’s budget in FY 2026-27 to deliver material stabilisation and transformation in the tertiary system. We have sought to support stabilisation through the sector’s main funding allocations for AY 2026-27; these initiatives represent the balance of funding for transformation.

The level of funding available will depend on ongoing movements in academic and financial year funding profiles, requests and receipts for liquidity support, and the Scottish Budget 2027-28 which will span academic years.

We are actively seeking proposals with national application, including from sector bodies. If we fund proposals from individual universities or colleges, the university proposal will receive university funding, and the college proposal will receive college funding.

We aim to fund a small number of initiatives in FY 2026-27. However, this exercise will also 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.

We aim to fund a small number of initiatives in 2026-27.

The focus of the PSR initiatives is on foundational transformation in the tertiary system.

Funding will be allocated via two routes – proposal submission; and commissioned activity, developed in collaboration, including through engagement with Universities Scotland and Colleges Scotland.

Regarding proposals, we particularly welcome applications with national application, for example from sector bodies. While we are open to receiving applications from individual institutions, please note that we are only aiming to fund a small number of initiatives in 2026-27.

For more information, please refer to the criteria in paragraph 16 of the sector guidance.

Proposals must be set out with deliverables to 31 March 2027. We also welcome applicants setting out a longer-term vision, associated activity and funding requirements beyond this date, recognising that future funding cannot be guaranteed.

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).

While we will consider exceptions, our expectation is that proposals in general will include at least three tertiary institutions or public sector partners.

These PSR initiatives complement wider transformation activity, including transformation supported or enabled through the University Transformation Framework (UTF) and College Transformation Framework (CTF).

PSR projects will remain separate to the UTF and CTF programmes due to their different nature: UTF projects are transformation projects supported by recoveries; and CTF projects represent flexibilities in credit thresholds to support curriculum transformation.

While these are separate to PSR initiatives, we would be open to considering if there are learnings, activities or opportunities that could be further enhanced as part of PSR.

The PSR initiatives will complement the projects underway as part of SSCF. Those projects run across AY2025-26 and AY2026-27 and this PSR funding requires delivery by 31 March 2027. We would be open to considering if there are learnings, activities or opportunities that could be further enhanced as part of PSR.

We fully recognise the challenges institutions are facing and particularly issues around capacity. We have sought to balance the need to ensure time for both development of proposals and maximising delivery of projects that recognise the Financial Year end date. We are holding a webinar on 17 August and seeking Expressions of Interest to be submitted to us by 21 August. We are committed to considering these and providing feedback by 7 September.

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.