JOHN Swinney is to warn local authorities to stop using a flagship Government policy for young people in care as a way to save money from their own budgets.

It comes after The Herald on Sunday revealed several councils were classing a new education bursary for care-experienced young people as income and using it as a reason to reduce other cash children were eligible for.

Experts said the practice was putting young people in care at risk of homelessness, and causing further hardship.

The flagship Government policy was introduced last year, with Nicola Sturgeon championing the fund which is supposed to help people from care-experienced backgrounds continue on to higher education or college.

Just 4% of people from care go on to university, and 40% go to college.

At the time, the Scottish Funding Council announced a £5.2 million pot to be spread among colleges and universities to pay for the bursary, with proposals clearly stating “care-experienced students will continue to be eligible to receive additional funding elements, such as travel, study costs, additional support needs, childcare and discretionary awards”.

However, earlier this year charities raised concerns that the bursary scheme was being mismanaged by some councils and care providers, who were classing it as extra income and using it as an excuse to reduce other funds.

Some young people were losing money for basics such as food, clothing and toiletries, or told they didn’t deserve the £8,100 to help them continue their studies.

Foster carers have also been affected, with some told that due to their foster child’s increased income, they would no longer be eligible for as much funding from local authorities. Instead they were being told to ask their foster children to give them money from their care bursary to make up the difference.

The Herald on Sunday understands Education Secretary Swinney is now preparing a statement on the issue, warning local authorities to stop classing the funds as income or using them to penalise young people or foster carers in other ways.

A Government source said: “The whole point of this bursary was to help young people who have been in care to achieve their goals and to make sure they are not adversely affected by not always having that family support that other young people might have when going on to further education.

“The First Minister took great pride in the bursary scheme, and it was intended to genuinely help bridge the attainment gap and improve the lives of young people in Scotland.

“When it came to light that it was not being administered necessarily in the way it was intended, it was obvious that the issue needed to be clarified.

“It should have been done in the beginning really, when this was introduced, but nobody thought councils would start taking money away from some of the most disadvantaged kids in the first place.

“The briefing from John Swinney should be issued soon, it’s awaiting sign-off. It’s basically telling councils to stop this abhorrent practice and stop classing the bursary as income for these children.”

The Scottish Government reiterated that it is now working with Cosla on how to resolve the issue, with a spokesman saying: “The bursary was introduced by ministers to offer increased financial support for all care-experienced students. It was designed not only to provide enhanced living cost support, but also to act as an incentive for young people with experience of care.

“No student should be made worse off as a result of the increased bursary and we are working with Cosla to consider how best to resolve this issue.”

Duncan Dunlop, chief executive of Who Cares? Scotland, welcomed the move. He said: “The care-experienced bursary was put in place after the Commission on Widening Access, an independent task force, recommended it as a step towards addressing the systemic inequality that care-experienced people face in education.

“It’s vital that care-experienced people receive the bursary as it was intended. It is not an income, it is student support. It’s been disappointing to hear from our members the differing practice and approaches being taken across Scotland.

“We’d welcome any action that addresses the gap that has emerged between the intention of the policy and the reality that people are facing, with the money being taken off them.”