The new department has been included on a list of departments earmarked by the Scottish Executive for relocation as part of a commitment to devolve more and more civil service jobs away from Edinburgh.

Ironically, however, Edinburgh is also on the short list of possible locations for the “new” department. Both the further and higher funding bodies have previously operated from separate sites in the capital and it’s understood that the inclusion of Edinburgh on the relocations shortlist is as a possible “co-location” site for the merged activities.

Dundee and Fife’s inclusion on the shortlist emerged today in the wake of Deputy Minister for Finance and Public Service Reform Tavish Scott reporting to the Executive’s finance committee that since 1999 decisions have been taken on 2400 civil service jobs moving from Edinburgh to “all parts of Scotland”.

As part of his six-monthly update, Mr Scott told the committee over 2000 of these jobs had already moved, with another 400 due to move.

These decisions mean that, to date, more than 55% of posts in the Executive and its agencies are located outside Edinburgh. There are a further 2000 posts under review, with decisions on many due soon.

Mr Scott also said that, as well as the jobs already decided upon, a number of agencies had been added to the current programme of location reviews.

These include the headquarters of the Scottish Court Service and the Office of the Legal Services Ombudsman. A further two candidates have also been identified as part of the Small Unit Relocation Initiative — a further Crown Office transcription unit (two have already been established in Dingwall and Tain) and the new convener of the Water Customer Consultation Panels.

The minister said the Executive “remains committed” to its relocation policy despite concerns voiced in recent weeks.

Later a Scottish Executive spokesperson Edinburgh, Dundee and Fife also face stiff competition from Glasgow City and North Ayrshire for final selection, a date for which is not yet known.

Dundee & Tayside Chamber of Commerce and Industry chief executive Mervyn Rolfe said although the city should be grateful for the civil service jobs the Executive had decided should be sited locally, much more needed to be done to redress the low ratio of such jobs to population from which Dundee still suffered.

The city also lost some civil service-related posts, mainly through the reorganisation which took place after the launch of Scottish Water.

“We do need considerably more civil service jobs to be located in Dundee if the city is to be on a par with other major population centres in Scotland,” said Mr Rolfe.

It also emerged today that Dundee and Fife have lost out on bids for two health-related departments with the announcement that NHS Education Scotland and NHS Health Scotland, together with NHS Quality Improvement Scotland, are to switch most of their activities to Glasgow from Edinburgh.