Lord Macdonald, the Scottish Office industry minister, announced on Monday that there would be consultation on the future of the Stirling-based Scottish Further Education Unit.

This follows a policy and financial management review which proposes that, after six years, the unit should no longer be a non-departmental public body (NDPB or “quango”) and that it should become self-financing. It would therefore lose its Scottish Office grant which stands at pound;680,000, almost half of its overall budget.

The unit was clearly taken aback by the proposals, which it did not see in their final formuntil a board meeting last Thursday.

Janet Lowe, the board’s vice-chair, said she was pleased at the recognition in the report that there should be a national body to support FE colleges. But she was “puzzled and concerned” at the principal recommendation that such a body should not be an NDPB. “That tells us what it should not be rather than what it should be,” she commented.

Tom Kelly, chief officer of the Association of Scottish Colleges, described the report as “introverted” and “an odd document.” He added: “Whether something should be an NDPB is a secondary matter to the strategic direction of curriculum development and other aspects of college activity.”

Ms Lowe, who is principal of Lauder College, reserved her strongest criticism for the proposal that the unit should be pruned to concentrate almost entirely on curriculum development.

“Further education is holistic. You cannot separate curriculum development from staff development, organisational change, quality, information technology and so on.

“That means the SFEU too has to be holistic, able to deploy expertise across the whole panoply of college activities. So how can it be expected to concentrate only on curriculum development?” she said.

Ms Lowe said there was a “mismatch” between college responses to the review and what the report recommends. The report “does not appear to have understood the role of the FE sector and therefore of the support that it requires.”

A press statement from the unit accused the report’s authors, Fiona Locke and Wendy Wilkinson from the Scottish Office efficiency unit, of disregarding evidence gathered during the review. This revealed that 87 per cent of colleges wanted the agency to continue in its present form and with its present functions, as did 93 per cent of other agencies who were consulted.

But the report suggests otherwise. “There are doubts over whether the SFEU is sufficiently in touch with colleges’ needs and uncertainty about the process in which SFEU attempts to identify these needs.”

The review team justified their proposals stating: “After more than five years of incorporation, it seems unlikely that SFEU is now in a position to add any real value to those functions in which the colleges are increasingly mature and expert.”

A concentration on curriculum support and related staff development would make the unit “more focused, more responsive and more accountable to colleges.”