The Scottish Executive has begun consultations over the merger of the further and higher education funding councils.
Ministers are proceeding cautiously because of fears that too speedy a transition could lead to "destabilising the sectors". Full merger, creating a council responsible for almost 900,000 students in 66 institutions and a budget of pound;1.1 billion, is expected to take around five years to complete.
Jim Wallace, the Deputy First Minister, said the merger was nonetheless a key part of the Executive's lifelong learning strategy for which he is responsible. It would "create greater transparency, comparability and parity of esteem between the HE and FE sectors," he said.
The two councils at present use different funding methods and resource the sectors differently, creating anomalies which lead to frequent complaints, particularly from the FE sector. One sensitive issue to be resolved is whether the new council should receive a single budget which it is then free to distribute, or whether Ministers and Parliament should impose controls over the balance between HE and FE.
Loosening the funding strings to make FEHE collaboration easier is also on the agenda, following the examples of partnerships between colleges and universities at the Crichton campus in Dumfries and in the Highlands and Islands. Current funding is based on type of institution, not level of course - unlike England - so HE courses in colleges are funded through the FE funding council.
There is no steer in the document to merge institutions, although it asks whether Ministers should have new powers to kick-start mergers rather than waiting to approve or otherwise those submitted to them by the institutions themselves. Since 1992, the date of the current legislation governing the two sectors, nine HE mergers have been approved (mostly the teacher- training colleges with universities) but none in FE.