As Scotland blearily comes to terms with the early hours of 1999, a new funding body for Scottish further education will come into existence.

The Scottish Further Education Funding Council will be responsible for handing out hundreds of millions of pounds in taxpayers' money - making it one of the biggest players in the public sector.

Local authorities might be reluctant to surrender control of schools to the Scottish Parliament

But with the greatest possible respect to the colleges, the education sector's attention is likely to be elsewhere for much of the new year. Just over four months of political campaigning remain as the parties vie to form the administration of the first Scottish Parliament for more than 300 years.

With policy areas like defence, foreign policy and macro-economics remaining at Westminster, education and health will take centre stage in the campaign and its aftermath. The government is planning a White Paper on Scottish education for early in the New Year. This will be in effect a campaign document setting out its stall for Holyrood. The SNP, Liberal Democrats, Conservatives and other parties will follow suit.

A comprehensive survey of voters in Scotland, The Scottish Electorate by Alice Brown, David McCrone, Lindsay Paterson and Paula Surridge, suggests that Scots have high hopes for their new parliament.

The survey indicates Scots have extremely high expectations of what Holyrood can achieve in terms of policy, making government more responsive, and giving Scotland a greater say in the UK and the European Union.

Education will be a key issue in the elections for the new parliament

The survey also indicates Scots have more left-of-centre values and policy preferences than the rest of Britain. Scots are more in favour of comprehensive schools, wealth redistribution, public ownership and using higher taxes to finance better public services.

Looking further ahead, the authors find most Scots expect Holyrood to lead to independence within the next couple of decades - a possibility most do not oppose.

Expectation is highest when it comes to education. Sixty-three per cent of Scots expect Holyrood to make our education system a little or a lot better. Twenty-five per cent say there will be no change; only 4% think things will get worse.

Trouble for local authorities

This weight of expectation may be bad news for Scotland's local authorities, who currently wield most of the power in schools. Many councillors still appear to believe that the Scottish Parliament will not dabble too much in how they run their schools.

That seems highly unlikely: the party (or more likely parties) which come to power in June will have been elected largely on the strength of education policy. Education will also be one of the biggest budget lines on Holyrood's books. So local authorities may have a short time indeed to convince the new MSPs that education is best left in the hands of councils.

And that is not the only time in 1999 that Scottish education will step into the unknown. In June, after their Standard Grade exams are out of the way, many Scottish pupils are due to begin work on new Higher courses.

The Higher Still reforms have been gestating for years: they have been postponed twice amid claims they were rushed and inadequately resourced. Boycotts by the two largest teaching unions - the EIS and SSTA - were only called off following delicate negotiations.

Part of the deal is that schools or individual subject departments will be able to opt out of introducing the new courses if they feel they are not ready. With something like 20 different highers at five different ability levels in more than 400 secondary schools, it calls for more than 30,000 decisions at local level by the summer holidays.

In practical terms this means pupils at some schools are likely to find themselves studying new Highers in some subjects while still following the old courses in others. It also means that one of the fundamental principles of Higher Still may not be fully implemented for years: that of inclusivity.

Modular - eventually

At the moment only about 20% of Scottish schoolchildren pass three or more Highers at their first sitting. The purpose of Higher Still was not to make the Highers easier, but nevertheless to give less able students some credit for the work done and skills acquired on their way to the exams.

Thus the courses are being broken into modules, with pupils being given credits for the work done in each one. They should also be being taught at five different levels of ability, but this aspect will be delayed as schools, local councils and the government attempt simply to replace the old Highers with the new. So less able pupils - for whom the reforms were originally intended - will continue to miss out for the time being.

The teaching profession in Scotland is meanwhile suffering from its own very special brand of pre-millennial tension. The so-called "Millennium Review" has led to an ongoing series of talks between the unions and employers over restructuring Scottish teaching. The employers' side wants teachers to give ground on issues like flexibility.

At the moment what teachers teach - and when - is tightly regulated. The complex system of promoted posts could be pruned, which could limit their career opportunities. Teachers might even be asked to cut short their long summer holidays. The carrot would be higher pay - but the unions are refusing to trade pay for working conditions.

There is also a widespread suspicion in the ranks that calls for "flexibility" conceal a desire to make teachers work considerably harder for not a lot more money. Some point to other areas of the public sector where - they say - the slogan of flexibility has been used to mask management's inability to manage.