While the creation of the Department for Business, Innovation and Skills is yet another challenge for the further education sector to deal with, it is good news from a strategic economic perspective.

This single, powerful and strong ministerial department led by Peter Mandelson, who is also the First Secretary of State, will be focused on rebuilding the country’s economic strengths. For the first time in a long time we will have enterprise, innovation and skills in one place.

This has to be good news for the skills agenda, which over the past few years has suffered from a fragmented approach and a consequent lack of focus and clear policy direction. Further education is now poised to be closer to the heart of the Government’s economic thinking.

With this change comes a logical strategic decision that needs to be made quickly. The new Skills Funding Agency needs to be linked even closer than the proposals suggest to current and future economic priorities at a regional and national level. Its regional network needs to be more aligned with regional economic priorities to avoid the centralist, “top down” approach that has bedevilled strategic skills planning.

The logic has to be that these elements of the agency should be aligned with the work of the regional development agencies, whose job is now to work on clear evidence-based priorities for short-term and medium-term economic recovery.

Leaving the Skills Funding Agency as proposed runs the risk of isolation from wider economic and higher-level skills issues. This is not to suggest a “land grab” by the regional development agencies, but it is a proposal of strategic logic that would enhance economic recovery and give colleges a better opportunity for local dialogue on key strategic issues.

Steven Broomhead, Chief executive, Northwest Regional Development Agency.