A "considerable lump sum" is to be made available for two areas of work: arts organisations creating work specifically aimed at a young audience; and school and youth group arts projects.
This project has grown out of the New Directions lottery fund, but is, says Sylvia Dow, the SAC's senior education officer, better targeted. "New Directions was entirely application-led. The Government is now allowing us to be strategic. We can identify gaps in provision and be much more focused about what we want to encourage."
The message to schools is to think big. The fund is aimed at projects that will make a difference, transform an area of school life, create something new and inspirational.
The paperwork associated with New Directions put off some applicants, but the new system should be easier to administer.
"It is a much simpler process," says Dow. "The guidelines are clearer, and most importantly we can now talk to and guide the applicant, which we weren't allowed to do with New Directions."
The minimum grant is pound;2,000 and applicants for more than pound;70,000 will be asked to fill in an outline application so that the SAC can advise if the project is heading in the wrong direction. "It still has to be a rigorous assessment," says Dow, "but we can hold applicants' hands. They're not alone."
New Directions funding has had a tremendous impact on arts and education in Scotland. "We've turned around the brass band, pipe band and wind band scene," says Dow. "They have all been on to us to buy new instruments."
And whether it is a year-long programme of artists-in-residence for every school in one local authority, or the creation of a single, large-scale artwork in a primary school with associated workshops and activities, New Directions has given educators the opportunity to expand their horizons and make unbelievable things happen.
Sylvia Dow is happy that there has been a good spread of applications from across the country. "We've been successful in spreading money into the community," she says. "We haven't had the kind of problems England has had with people complaining about all the cash being sucked up by one or two big organisations."
Theatre, dance and music for a young audience are still in their infancy in Scotland, but the new fund should make a big difference. For Scotland's arts organisations it may mean that the youth-oriented project which has languished for lack of funding will finally see the light of day.
Sylvia Dow talks of ballets written for children and touring exhibitions aimed at young people. The UK still lags behind much of the rest of the world in its provision of arts for children. This fund could be the beginning of a new era.
A series of roadshows to explain the new funding will take place across Scotland between April 20 and May 11. To reserve a place, contact Gillian Shaw or Lesley Edwards, tel: 0131 226 6051 fax 0131 477 7240 e-mail firstname.lastname@example.org