An education charity has said 17 jobs have been cut after it lost Scottish government funding worth nearly half a million pounds. 

In October, Young Enterprise Scotland, which had 31 employees before the job cuts, said it was at risk of closure after the Scottish government scrapped established grants and “failed to follow through on funding assurances”. 

It subsequently received emergency funding to prevent immediate closure, but said today that 17 staff members had been made redundant. 

The charity said it would operate on a “significantly reduced staff” of “no more than a dozen people” after being denied funding from the Scottish government’s new Entrepreneurial Education Fund.

YE Scotland’s funding historically came from a combination of a core continuity grant from the Scottish government, an ongoing pipeline of support from trusts and foundations and support from the private sector, the charity said. 

But in July, YE Scotland was told that grant process would be replaced with a “competitive” process which then opened in August. 

The new fund awarded seven organisations a share of £829,346, with YE Scotland being unsuccessful in this round of funding. 

The charity was subsequently granted emergency funding of £285,000, which covered its existing costs for this financial year and saved the charity from closure. 

Emma Soanes, chief executive of YE Scotland, said: “It is a huge relief that we have been able to avoid a complete closure of Young Enterprise Scotland and we are grateful to the Scottish government for providing us with emergency funding which prevented our worst case scenario becoming reality.  

“Sadly however, this will provide little consolation to the 17 valued members of our team who have lost their jobs just weeks before Christmas. 

“Losing our major income source has been an enormously unsettling and upsetting time for everyone involved, and while we try to remain positive there is no doubt there will be challenging times ahead as we refocus and prioritise what programmes we deliver within schools and colleges on such a reduced staff model.”

Last year, YE Scotland supported more than 18,000 school and college students through its enterprise programmes, including its flagship Company Programme. 

In the past three years, more than 1,000 students have gained a YE Scotland enterprise qualification. 

Soanes said: “We will definitely be engaging our own entrepreneurial mindsets in the coming weeks and months as we reposition ourselves within the education ecosystem.” 

A Scottish government spokesperson said: “This will obviously be a concerning time for all employees impacted and their families. 

“The Scottish government has engaged with Young Enterprise Scotland to try to mitigate the impact of its financial situation, including awarding £285,000 towards the two previously funded projects to ensure the organisation’s continued viability.”