Flexible AI Upskilling Fund pilot

The Department for Science, Innovation and Technology (DSIT) recently announced a £7.4 million pilot scheme to subsidise the cost of AI skills training for small and medium-sized enterprises (SMEs) in the Professional Business Services sector. £6.4 million of grant funding is available.

Through this pilot programme, eligible businesses can apply for funding for up to 50% of the cost of AI skills training and other AI upskilling activities. This refers to training which supports employees to develop their technical skills and/or understanding of AI to be able to develop, deploy, or use AI in their role.

This pilot scheme is funded through the £37.5 million Labour Market Evaluations and Pilots fund, announced by the Chancellor at Spring Budget 2023.

Funding will be provided by DSIT in the financial year (FY) of April 2024 to March 2025. Successful applicants must be able to complete delivery of training and submit invoices for reimbursement via grant funding by February 2025.

Please note that by submitting this application for grant funding for the AI Upskilling Fund, you agree to be contacted by DSIT and its delivery partners for future surveying to contribute to the evaluation of the pilot. If you are unsuccessful in your application and would like to opt out, please email us at ggms_aiupskilling@cabinetoffice.gov.uk 

Please note that this scheme is a pilot funded by the Labour Market Evaluations and Pilots Fund (LMEP). This fund aims to build the evidence base on the effectiveness of policies to improve labour market outcomes, including by funding novel or experimental approaches such as this one. To ensure this pilot generates robust evidence of the effectiveness of this type of skills intervention, this scheme may be evaluated based on a Randomised Controlled Trial (RCT) approach. In this scenario, funding will be awarded by lottery amongst applications which score above a pre-defined merit threshold. If this scheme does not adopt an RCT approach, funding will be awarded via merit-based allocation for the funding available. If you are unsuccessful in your application, we will inform you whether it was because we have adopted an RCT approach or because you did not reach the minimum merit threshold, outlined further below.

Applicants can apply for a maximum amount of funding depending on the size of their business, set out in the table below. The aim of the scheme is to subsidize the cost of AI skills training up to a ratio of 1:1. For example, a small-sized business can apply for up to £5,000 of grant funding to pay for 50% of AI skills training which costs £10,000. If the training cost £8,000, the applicant could only apply for £4,000 of grant funding.

To ensure a robust evaluation, our aim is to fund a range of businesses across the micro, small and medium-sized business categories, so we may limit the total number of businesses that can be awarded funding in each size category. The maximum amount of funding available per individual applicant will remain as stated above. If, over the course of the pilot, there are not sufficient businesses applying in one or another category, we will look to reallocate funding to the other categories.

Funding is for the delivery of AI skills training only. It is not for the cost of:

-          Purchase of AI technologies

-          Business advice of consulting

-          Recruitment activity

-          Work placement or internship salaries

-          Capital expenditure (1)

Applicants can apply for different levels of funding depending on their business size and type as defined by BEIS SME action plan: 2022 to 2025 (2).

Minimum Financial Assistance

This grant funding is awarded under Minimum Financial Assistance exceptions to the UK Subsidy Control regime. 

The Department for Science, Innovation and Technology offers a Minimum Financial Assistance (MFA) subsidy under the Subsidy Control Act (2022), subject to your agreement to, and compliance with, the terms and conditions set out below.The amount of MFA offered is up to £10,000. Before making the payment, we require written confirmation that receipt of the payment will not exceed each business’ MFA threshold of £315,000 cumulated over this and the previous two financial years, as specified in section 36(1) of the Subsidy Control Act (2022). This means you must confirm that you* have not received more than £315,000 minus the value of this subsidy in MFA subsidies or comparable types of subsidies (see section 42(8) of the Subsidy Control Act) between 1 April 2022 and this date. 

We take this opportunity to remind all potential applicants that you are required to keep a written record of the amount of MFA you have received and the date/s when it was received. The written record must be kept for at least three years beginning with the date on which the MFA was given. This will enable you to respond to future requests from public authorities on how much MFA you have received and whether you have reached the cumulative threshold. Subsidy Control Statutory Guidance 97 Confirmation must be sent by someone who is authorised to do so on behalf of your organisation.

Randomised Controlled Trial (RCT)

Please note that this scheme is a pilot funded by the Labour Market Evaluations and Pilots Fund (LMEP), which aims to continue to build the evidence base on the effectiveness of policies to improve labour market outcomes, including by funding novel or experimental evaluations. As such, this scheme may adopt a Randomised Controlled Trial (RCT).  

In this scenario, funding will be awarded by lottery amongst applications above the pre-defined merit threshold. If this scheme does not adopt an RCT approach, funding will be awarded via merit-based allocation for the funding available.

If applicants are unsuccessful, they will be notified whether it was because they did not pass the eligibility or merit threshold, or because they were randomly selected through the RCT to not receive funding. All businesses will be expected to engage with the evaluator throughout the pilot and evaluation up to March 2027.

(1) Capital expenditure means money used to acquire, adapt or maintain fixed assets, such as land, buildings and equipment, which is normally capitalised in the provider’s audited annual accounts.

(2) https://www.gov.uk/government/publications/beis-small-and-medium-enterprises-sme-action-plan-2022-to-2025/beis-small-and-medium-enterprises-smes-action-plan-2022-to-2025-accessible-webpage