PUBLIC money is potentially being "squandered" on university students who graduate without the skills required for work, a former college boss has warned.

Sue Pinder OBE, who stepped down in 2012 as principal of James Watt College in Greenock, said colleges were better placed than higher education institutions to produce students with the skills required by the economy.

Her comments, contained in a new book of ideas to improve the education system compiled by the Scottish Conservatives, come at a time when the further education sector has been hit by significant cuts.

While universities have seen funding largely protected at a time of austerity in public finances, a recent parliamentary briefing for MSPs showed colleges would see a £67 million real-terms cut between 2011/12 and 2015/16.

Ms Pinder said: "Scotland's universities consistently appear in the world top rankings, but there is a lingering concern about the fit between the knowledge and skill sets of graduates and skills gaps in the economy. Questions need to be answered about the potential squandering of public resources on graduates who cannot find work and are not work ready when they graduate.

"The college sector is the most ­critical for the economy. Colleges are all about vocational skills and workforce development; it is the college sector that is crucial to a vibrant and enterprising economy."

Ms Pinder went on to attack the ­Scottish Government's "radical regionalisation" agenda, which began in 2010/11. "What started out as a series of draconian spending cuts, some £50m per annum, soon evolved into a direct attack on the governance, performance, leadership and management of the colleges," she said.

Alastair Sim, director of Universities Scotland, which represents university principals, said: "There is a risk, and one universities very much want to avoid, that Scotland's university and college sectors are pitted against each other to argue over which offers the most value."