Around 39,000 apprentices receive training contributions each year, supported by £90 million of Scottish Government funding. The review will consider the level of these contributions.

It will also examine how the current system, delivered by Skills Development Scotland, operates across key sectors and age groups while supporting the Government's focus on growing the economy.

Ministers committed to the review during the passage of the Tertiary Education and Training (TET) Act, which MSPs approved earlier this year to simplify funding for post-16 education and skills. The first stage of the review will start later this month.

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Higher and Further Education Minister Ben Macpherson said: "Apprenticeships help create positive futures for people, including many of our school leavers, as well as developing the skills required to meet the changing needs of the 21st century economy.

"The Scottish Government recognises that there are financial pressures surrounding the current apprenticeship model. That is why we are reviewing contribution rates, to look at whether current public funding for the Modern Apprenticeship programme is still appropriate and sustainable, as well as meeting our priorities and Scotland's labour market needs.

"The Scottish Government will do more to help ensure that smaller employers can recruit more apprentices, for the benefit of their businesses and those in training."

Scottish Training Federation Chief Executive Stuart McKenna said: "The Scottish Training Federation welcomes the Minister's commitment to review funding rates for modern apprenticeships.

"To ensure the continued success of the programme, it is essential that we review the current funding model to ensure it remains fit for purpose."