In her letter of guidance to the Scottish Funding Council on how it should support the Government’s policies and priorities during 2009-12, Fiona Hyslop makes it clear that further and higher education should gear its output “to ensure the skills learned during courses of study at college or university can be utilised to best effect in the workplace.” These should support the “key ambitions” to develop entrepreneurial capacity and graduate employability.

This confirms the line taken in the New Horizons report of the university taskforce last June, which set out plans for a special “horizon fund” to back teaching and research aimed at “increasing sustainable economic growth.”

The Government wants colleges and universities to support the key economic sectors ministers have identified - energy, financial and businesses services, food and drink, life sciences, tourism and the creative industries.

But Ms Hyslop’s letter also set out other priorities for the funding council, including continuing to widen access for all students, exporting knowledge from FE and HE to grow businesses, encouraging specialisms in institutions, and stimulating more collaboration among colleges and universities.

In addition, the two sectors will be expected to receive funding which will support some of the Government’s non-economic priorities. The outcome of a “strong fair and inclusive national identity,” for example, ought to lead the funding council to promote Gaelic in colleges and universities, Ms Hyslop stated.