Iain Gray gave this indication in launching his lifelong learning strategy in which links between FE and HE figure strongly. While some critics suggested the strategy was more structural than substantial, Scottish Executive officials believe that the merger of the two councils will prove "a very strong catalyst for change".
Among the issues to confront the new council, which will require legislation to bring it into being, will be parity of resourcing between colleges and universities.
The strategy also promises a fresh drive to improve links for students moving on from college to university and calls for greater collaboration between the Scottish Quali-fications Authority, colleges and universities in the development of qualifications.
The strategy document states that a merger of the two funding bodies "would make possible greater comparability and transparency in the way that different types of institution and levels of courses are funded in tertiary education".
But it cautions against "oversimplified funding arrangements (which), although superficially attractive, would in reality damage learning providers and the interests of learners themselves". Funding has to recognise the enormous variety of courses and individuals in post-compulsory education and training, and the emphasis should be on what is achieved.
The two funding councils have already begun working closely together, agreeing for the first time to draw up a joint corporate strategy and exploring the idea of having joint committees.
The councils have had a joint secretariat since their establishment. Roger McClure, chief executive of the two bodies, commented: "Our starting point is that a joint council is inevitable. But we haven't waited to be pushed."
Mr Gray has already asked both councils to work together on analysing the demand for students and the capacity of both sectors to respond.
The new lifelong learning strategy has for the first time tried to bring together the interests of the learning and business "markets" and the crucial role played by employers and learning providers as well as individuals.
The need to stimulate a positive attitude to learning is evident in the strong emphasis given to the role of schools (almost 40 per cent of those who had not undertaken recent learning had no qualifications which was true of only 11 per cent of recent learners).
But Mr Gray said his aim was a three-pronged drive to encourage lifelong learning - a "cultural change" to stimulate demand, greater collaboration between employers and education, and flexible and relevant provision so that demand for skills can be satisfied.
There would be a full review of the funding of learners during the course of this year, excluding student support and tuition charges in higher education which had just been introduced and needed time to bed in, Mr Gray said.
As revealed in last week's TES Scotland, the extension of learning entitlements beyond those in school and undergraduate education will be piloted. It will be confined to those leaving care, but focusing only on those youngsters whose schooling has been interrupted.
The Executive has opted for this highly cautious approach, arguing that there is insufficient clarity, even on the part of the parliamentary lifelong learning committee, about what entitlement is.
"We can deliver significant improvements for learners, employers and learning providers if we make sure that there is both increased clarity and equity in the system," it states. "Providing better information and guidance for learners and employers about the funding that is available to them is a first and important step."
Mr Gray said substantial sums were already being committed - pound;1.77 billion from the Executive rising to pound;1.9 billion in 2005-06 (although the vast bulk goes to the institutions), pound;2.2 billion by employers and pound;500 million by individuals from their own resources.
But he acknowledged there were still too many gaps - in skills, in opportunities and in productivity.
He has accepted the recommendation from the lifelong learning committee for trialling learning accounts among small employers, to help them link learning to the growth of their businesses.
Individual learning accounts are also to make a comeback. The new scheme will be administered by the Student Awards Agency for Scotland and Learndirect Scotland to ensure there will be no repeat of the misuse of funds that led the Government to close down the initial scheme across the UK.
Further stimulation is to be given to learning in the form of a "Give it a Go" taster campaign to engage 5,000 new learners in March and April, along with a new drive to boost community learning.
JUDGE US BY THIS
The Executive has set out six indicators by which its lifelong learning strategy is to be judged.
* A reduction in the number of 16-19s not in education, employment or training, the so-called "NEET" group, which remains around 14 per cent.
* Increased support for 16-19s from low income families to stay on at school or college through the extension of maintenance allowances, expected to support 40,000 youngsters by 2005-06. Participation in education by 16-19s from poorer families is less than 40 per cent.
* Increasing the number of graduates as a proportion of the workforce, currently 18 per cent.
* Reducing the proportion of adults whose highest qualification is below level 5 of the Scottish Credit and Qualifications framework, which means they have no qualifications and no Standard grade Credit passes (27 per cent in 2001).
* Reducing the proportion of 18-29s whose highest qualification is below level 6 with no qualifications or no Highers (33 per cent last year).
* Increasing numbers in employment undertaking training (28 per cent last spring).
Iain Gray, Enterprise and Lifelong Learning Minister, accepted there was no time-scale for the indicators and they would simply be "monitored on an ongoing annual basis".
They are indicators of progress not targets, Mr Gray said.