ONE OF Scotland's leading economists has called for a wide-scale rationalisation of the country's universities, criticising the current system for its failure to meet the needs of business and the economy as a whole.

In a move that is sure to spark fears of closures and academic job cuts, Neil MacCallum, head of policy and strategy at the Scottish Chambers of Commerce, is to campaign for a high-level strategic review of the entire sector. Citing a growing skills gap as evidence of a poor record of connecting skills to the enterprise agenda, he believes that the time is right for a comprehensive study of the education system's structure and economic role.

"Scotland has to look very hard at rationalising higher education because we have too many institutions at the moment. We have to identify our strengths and avoid unnecessary duplications," he said. The higher education sector is a tremendous asset to Scotland, but it operates in a highly competitive international marketplace.

"We have to look at the scale and focus of the entire sector, reallocate resources where necessary and put ourselves in a much more advantageous position."

Formerly head of appraisal and evaluation at Scottish Enterprise, MacCallum believes that over-emphasis on academic qualifications has disadvantaged Scotland plc.

"There is no doubt in my mind that many markets in Scotland are not being served with the skills they need. Business and industry has been struggling to make a connection with education for years. We are very poor at leveraging the knowledge that comes out of the sector and there is widespread agreement that this must be addressed," he said.

"I am not calling for particular universities to close or merge, but nothing should be off the agenda and we have to consider the future approach carefully, not slip back on knee-jerk reactions.

Calling for parity of esteem between academic and vocational qualifications, the economist's comments will strike a chord with many in the business community. While most have welcomed the growing proportion of Scots now being educated to graduate level, there is broad consensus that a bias towards non-vocational subjects is creating a skills gap.

The new Scottish government recognised the issue earlier this month, when Cabinet secretary for education and lifelong learning Fiona Hyslop MSP published a lifelong skills strategy calling for collaboration between the public and private sector to design a system that meets the needs of both learners and employers.

"There has been a growing feeling amongst businesspeople for some years now that the current trend for pushing kids into academic courses is creating a major problem. Nobody disagrees that educating people to a higher standard is desirable, but we need a balanced approach that recognises the need for vocational qualifications as much as it does marketing degrees," said independent business consultant Peter Campbell.

However, any move to rationalise higher education would be certain to provoke resistance from within the sector. Universities Scotland, the organisation which represents the country's 20 higher education institutions, warned that any programme of cutbacks, closures or mergers could prove disastrous.

"We have over 40,000 employees. We have a sector turnover of over £2 billion. When you put this together you come out with a clear conclusion that universities are big enough to be efficient and effective. There is no case in recorded history in the UK of two universities being merged and actually saving money," said Robin McAlpine, spokesman for Universities Scotland.

"The Future Skills Scotland report showed that, in fact, in the next 10 years, Scotland may face a shortage of 200,000 people with postgraduate qualifications. There are signs that we are facing a real economic crisis because of complacency about the levels of education that we have in this country."

Reiterating his support for a strong higher education sector, MacCallum nevertheless points to repeated surveys pointing to a widening skills gap.

"I am not trying to upset traditionalists, just engender a mature, dispassionate debate about the future direction of the education system and it's strategic role in the economy," he said.