Skills and innovation were given high priority in the new Cabinet announced by prime minister Gordon Brown last week.

A new Department for Innovation, Universities and Skills (DIUS) under secretary of state John Denham will be responsible for the development and delivery of science, research, innovation and a skills base to ensure the UK has the workforce to compete in a global economy.

DIUS’ remit will include responsibility for the development, funding and performance management of teaching and research in higher and further education, working closely with the new Department for Children, Schools and Families.

The new unit will also be responsible for taking forward the government’s wider skills agenda, including the implementation of the Leitch Review of Skills, published last year.

It is the first time innovation has been given Cabinet status, and experts say it reflects the growing importance of developing a knowledge-based economy.

CBI director general Richard Lambert says DIUS signals a new, essential urgency for the right skills for the UK’s future.

‘Our creation and use of knowledge in the years ahead will define our ability to compete in the global economy,’ he said.

Karen Price, chief executive of sector skills body e-Skills UK, says the inclusion of graduate education in DIUS’ remit is important.

‘Developing high-end graduate skills is a priority for the IT sector as well as the long-term professional development of the IT workforce,’ she said.

Brown has also created an advisory council of high-profile business leaders, such as the chief executives of Tesco and BP. But IT trade association Intellect expressed concern that the technology industry is under-represented among the group.