The Lifelong Learning Minister gave his strongest hint yet that he expects more further education colleges to merge.

As he announced his expected approval for the merger of Glasgow College of Building and Printing and Glasgow College of Food Technology, Jim Wallace told ASC members: “I hope the creation of the new college will provide an opportunity for yet further merger discussions in Glasgow as soon as circumstances seem right.”

The only other merger proposal publicly on the table is between Glenrothes and Fife colleges, but the priority is to rationalise FE in Glasgow before the funding council ploughs more much-needed cash into upgrading the college infrastructure in the city.

He said there were welcome signs of progress as colleges look at the scope for, and the value of, mergers.

But Mr Wallace acknowledged that colleges had been busy carving out their own territory and it might be difficult for them to pool their autonomy. He insisted that they had to keep their eyes on “the bigger picture”.

That means every college board “giving very serious consideration to wider issues of alignment and delivery beyond the communities and skills sectors served by the college”. He said: “I am struck that the current alignment of the further education sector remains virtually the same as it was 11 years ago. That can’t be right. Is it too much to believe that nothing has moved on in that time, or that the optimum configuration of the sector remains the same?”

Mr Wallace said circumstances had changed a great deal in those 11 years and he added: “We see a sector which has matured greatly. It is not for Ministers to tell you where co-ordination ends and integration begins. But what I require is that each college continues to look seriously and impartially at where and how it should stand in the sector.”

The new Glasgow college, to be known as Glasgow Metropolitan College, will be established on August 1, its combined enrolment of around 20,000 students and more than 500 staff supported by a pound;22million annual turnover.

Mr Wallace said he hopes the success of the merger “will give a key signal to the sector on how both educational delivery and financial stability can be boosted in this way.”

Tom Wilson, principal of Glasgow College of Building and Printing, described the merger as “the natural evolution” of the collaboration that had developed between the two colleges.

Donald Leitch, his counterpart at Glasgow College of Food Technology, said the work in each college complements the other and there would be very little curricular duplication.

In his speech, Mr Wallace said the merger of the funding councils for further and higher education would encourage colleges to collaborate, making it easier for students to move from FE to HE and creating parity of esteem between the two sectors.

But he warned more than once that the Executive’s spending review, the outcome of which will be revealed in September, “is likely to be a very tight one”. He added, however: “I will continue to champion the (FE) sector in Cabinet: I give you that assurance here today.”

Mr Wallace gave the same message to the colleges as he gave earlier in the year to the universities: they should look for other income to supplement what they receive from the public purse.

“Real growth and success will involve finding new markets for the education and training products you offer, and opening new streams of income for the expertise you possess.”

The Minister acknowledged that colleges were expected “to make the resources we provide work harder every year”, while at the same time they were being required to improve the quality of what is achieved in a way which is both “strenuous and relentless”.