A GOVERNMENT review of Scottish further education funding must foster collaboration rather than "over-vigorous competition", Scottish Office education and industry minister Brian Wilson has warned.

Mr Wilson, speaking at the annual conference of the Association of Scottish Colleges, urged the 43 colleges to come forward with proposals for partnerships and mergers, although he said any merger proposal would have to be carefully examined in terms of enhancing services to students and the local community.

There had probably never been so much turbulence and tension in the sector, caused in part by a funding formula whose stress on growth had led to needless competition, Mr Wilson said.

"In my view, it does not make a lot of sense for two or three colleges to be fighting each other over the same catchment areas in order to generate growth. Competition needs to be exercised within sensible parameters."

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Delegates demanded a clear strategy for the sector. Jim Thomson, chair of Clackmannan College's management board, said he was not worried whether the policy was for growth or contraction, so long as it was coherent, and allowed colleges to plan on a more long-term basis.

Ed Weeple, secretary of the Scottish Office Education and Industry Department, said a "crescendo of criticism" had led to a review of the way colleges were funded, although he stressed the current system had resulted from a joint exercise between the SOEID and the colleges themselves. "The remit of the review is to consider the distribution of the available finance, not to discuss its quantity," he said. "It is not a lobby group."

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A key question would be whether there should be a direct link between funding and output, such as a premium for the proportion of students who achieved a qualification.

"Activity producing no recognised qualification amounts to a quarter of measurable activity, an increase of 42 per cent between 1994-95 and 1995-96," he said.

Joyce Johnston, principal of Fife College, questioned Mr Weeple's figures, and said it was more helpful to talk about access courses rather than courses which did not lead to a qualification.

Leo Martin, chairman of John Wheatley College's management board, said he would find it appalling if further education was simply channelled towards people getting qualifications. His college aimed to get people who were disenfranchised and ostracised back into society through education.

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"Don't create a situation where we can't get them through the door," he warned.

Mr Wilson said further education had always had particular strengths in promoting access from people who found learning beyond the sanctuary of school very difficult.

"In a world which continuously threatens to open up a gulf between those in work and the workless, that attention to access routes and wider participation remains extremely important."