A quiet revolution is taking place in further and higher education - and it could cost up to pound;30 million over the next five years.

The Scottish Qualifications Authority and the colleges are in the midst of a programme to modernise Higher National Certificates and Higher National Diplomas, a move which is on a par with the much better-known and better-resourced Higher Still reforms that ushered in National Qualifications.

But, although Anton Colella, the authority’s chief executive, describes HN programmes as “one of the unsung successes of Scottish education”, the Scottish Executive has still to show it is prepared to be as bountiful with its financial support as it was with Higher Still.

Neil Robertson, the SQA’s depute director with responsibility for HNs, says the authority and the colleges are only partially resourced to carry out the reforms. “The extent of the gap is under discussion,” is how he puts it.

But, Mr Robertson added, such is the “corporate can-do” attitude of the FE sector that modernisation is continuing in anticipation that funds will be forthcoming. Such confidence has led the SQA to double its investment in the past year from pound;0.7m to pound;1.7m to kick-start the changes. In turn, this reflects the importance attached to Higher National awards by ministers who see them as a key route for students to progress to degrees - and therefore as a key ingredient in the Executive’s inclusion agenda.

The potential is already clear. There are almost as many students emerging with Higher National qualifications as with first degrees, according to the last official figures (for 2002): 23,450 and 26,255 respectively. A third of all undergraduate level students in Scotland were enrolled in FE colleges in 2001-02, almost two thirds of them on Higher National programmes. And 57 per cent of these students went on to further study.

Figures from Glasgow Caledonian University’s centre for research in lifelong learning show that HNs are already delivering for the Executive - compared with degree courses, they attract older people and more students from deprived areas, while also being more flexible.

But it is widely accepted that change is long overdue, with the Higher National framework having grown like Topsy, as each college developed its own portfolios alongside those of the SQA and other colleges. The plan is to streamline the existing 1,100 programmes to around 400 by 2008; courses in the arts alone are likely to drop from 80 to eight HNCs and eight HNDs.

David Fairweather, curriculum manager at Falkirk College who has been seconded to the SQA to work on the reforms, says the intention is “to develop the provision in a more focused way, hopefully making it more visible to employers and to universities - and more understandable.”

Employers have consistently praised HN programmes, while the universities have struck a less certain note. Some have given such students full “advanced standing,” allowing them direct entry into the second or third year of a degree course. Others are more reluctant, claiming HNs and degrees can be “misaligned”.

“Articulation is not automatic or universal,” Tom Kelly, chief executive of the Association of Scottish Colleges, says. “But there should be much more of it and the arrangements should be easier to use than they are at present.”

At a two-day conference in Inverness this week, Jim Gallacher, professor of lifelong learning at Glasgow Caledonian University, suggested there were three main problems facing HN students transferring to degree courses - coming to terms with different curricula, making adjustments from college cultures to the ethos of universities, and adapting to university teaching and assessment approaches.

Mr Robertson accepts there will be a challenge for the universities - and also for some employers - in taking on board the new HN design rules. For example, a Higher National Certificate is now made up of 12 credits instead of 15. This was designed to make them fit-for-purpose for employers, as most HNC students are part-time and in work.

The SQA is plugging the gap by introducing three new units, officially launched this week, covering workplace effectiveness, employability and personal development planning. “These are intended to be cross-cutting in a way that employers, and increasingly universities, say they want,” Mr Robertson says.

The universities have already expressed concern, however, that reducing the core of a Higher National Certificate programme from 15 to 12 units could undermine progression to degree courses.

The SQA counters that this is not so, as the universities receive most of their students through the HND route. The problem facing attempts to dovetail Higher Nationals with degrees is that the former are designed to a national standard while the latter, offered by “autonomous” universities, are all different.

In an attempt to clarify the standards, HN programmes are to be more clearly established in the Scottish Credit and Qualifications Framework, level seven for HNCs and level eight for HNDs (an honours degree is level 10). Although HNDs will require credits from 30 units, half of those can be lower than level eight.

The SQA is not just concerned with a numbers game and it has major ambitions for the HN framework, already evident in the use of the courses in Chinese universities.

Mr Colella stresses the importance of the “quality surround” for HNs which is a key element in the modernisation programme. This will feature assessment exemplars, CPD support and online assessment. There will also be specific occupational standards at one end and, at the other, the development of routes into HN studies including entry for school students.

And there will be a clearer definition of core skills, such as those launched this week, and a recognition of work and learning achievements which can be counted towards HN credits.

“We hope this will result in a more flexible and dynamic product not only in Scotland but abroad as well,” said Mr Colella.