scottish Education Minister Brian Wilson yesterday responded to calls for a fundamental review of further education funding and an end to the culture of cronyism in college boards of management.

Mr Wilson pledged to reform funding procedures which, he said, have encouraged ''over-vigorous'' competition and penalised colleges which fail to attract enough students.

He also promised a review of board appointment procedures to bring them in line with the Nolan Committee guidelines.

The announcement was welcomed by the Educational Institute of Scotland, which last week denounced a ''self perpetuating oligarchy'' of board members who were cashing-in while lecturers were losing their jobs.

Speaking at the annual conference of the Association of Scottish Colleges in Dunkeld, Mr Wilson promised a new strategic framework for Scottish further education.

Announcing that he has asked officials to ensure that funding encouraged ''collaboration in a common enterprise'', he said: ''I believe that the present funding arrangements have been largely responsible for the sometimes over-vigorous competition which seems to characterise part of the sector.''

He said it did not make sense for two or three colleges to be fighting each other over the same catchment areas in order to generate growth.

Board appointment procedures must take account of the Nolan principles of selflessness, integrity, objectivity, accountability, openness, honesty and leadership, he added.

''Boards of management have a vital role to play, and the way board members are appointed is crucial. To many in the local community there is no clear understanding of this process and little knowledge of the members once appointed.

''I look forward to working with the further education sector and building on its strength, initiative, expertise and sheer determination. The sector has an important role to play as we develop new policies for education and training which will be central planks in building a country with drive, purpose and energy,'' he said.

Mr Wilson echoed themes raised by EIS general secretary Ronnie Smith at the union's conference in Perth last week.

Mr Smith referred to the ''unpleasant spectacle'' of board members enjoying ''considerable personal gain'' while employees were taking pay cuts or losing their jobs.

Yesterday he said: ''We obviously welcome Mr Wilson's comments as picking up on an issue in which we have expressed concern.

''One of the Nolan principles is that of accountability, which I think is that which is most conspicuously absent from the present arrangements. At the moment, when a vacancy arises on a board, existing members approach someone they know to fill it. Boards are heavily skewed towards the local business community.

''The Minister has identified the problems but he has not spelt out the means by which these will be addressed. We would hope to be involved in discussions about ways of taking the process forward.''

Mr Bob Kay, chairman of the Association of Scottish Colleges, said: ''The ASC and all its members are positive about working with the Minister and the department who put forward a message which will clearly put the sector in the spotlight.''