The Welsh Assembly’s second year has brought a growing readiness to move away from the educational agenda set for England - but continuing discontent over funding.

Both Rhodri Morgan, First Minister of the Assembly, and Jane Davidson, the energetic ex-teacher who replaced Rosemary Butler as education minister last October, have stressed they want to do things their way. “Welsh solutions to Welsh needs” is their mantra.

This independence was most striking in their reception of Labour’s Green Paper on education, with its aim of creating diversity by making nearly half of all secondaries specialist schools by 2006. Welsh schools would not be following suit, Mr Morgan made clear. Miss Davidson said: “The focus of the National Assembly is on local schools that offer the widest opportunities for their children. We could not contemplate a situation where specialisms are concentrated too narrowly.”

So schools in Wales are to stay fully comprehensive and proud of it, news that warmed the cockles of Welsh teachers’ hearts.

On school league tables, too, the Welsh are taking an independent line. Test results have never been published for primary schools and now Miss Davidson is consulting on radical changes to the league tables for the country’s 200 secondaries: either to scrap publication altogether, leaving it up to parents to get results from schools, or to add a value-added indicator.

Other distinctive policies have been welcomed by teachers: plans for performance management that stress self-evaluation and put pupil results in context; literacy and numeracy strategies that rely on encouragement rather than dictation; consultation on the future role of Estyn, the Welsh inspectorate (already a sight less punitive than its English counterpart); and a swiftly promised inquiry into abuse proceedings after the Marjorie Evans “slapping” verdict.

Yet the feel-good factor remains elusive, chiefly because schools in Wales feel that the money now apparently flowing so freely to English schools is still not flowing to them. According to the Welsh branch of the National Union of Teachers (NUT Cymru), consultations on at least 120 teacher redundancies started this term simply because schools lacked the funds to keep them - until they were bailed out at the 11th hour by last week’s announcement of their share of Gordon Brown’s extra millions.

The funding problem is mysterious. According to the Barnett formula for sharing out government funds to the different parts of the UK, public spending per head in Wales is higher than in England. And according to the combative Miss Davidson, funding for Welsh schools has increased faster than inflation since 1997. Funding per pupil last year was pound;2,870 - higher than in eight out of 10 English regions - and money for schools is set to rise by 9 per cent this year.

To which Welsh heads can only reply that it does not feel like that. “The amount in the original pot may be the same as in England, but what actually reaches the schools is very different,” says Anne Hovey of the National Association of Head Teachers. Or, in the words of Gethin Lewis of NUT Cymru, “The funding fog is as thick as ever.”

There is no Welsh equivalent of the standard spending assessment, the Government’s view of what English councils should spend on education, and there is little “ring-fencing” of authority funds. Welsh councils may divert money meant for education to other services and in any case they pass a relatively low proportion direct to schools - in 1999-2000, only four out of 22 delegated as much as 80 per cent.

And initiatives sending money direct to schools, such as specialist status, do not exist in Wales. Welsh comprehensives might not want the status but they would like the extra money it brings.

Ian Morgan, head o Harold Road junior in Abergavenny, Monmouthshire, said his school had so far received no money at all for improvements at key stage 2, despite Assembly claims of extra funds.

Gethin Lewis, of the NUT, described the dithering over passing on education’s share of the Chancellor’s extra pound;100 million for Wales over three years as “inexcusable”.

Jane Davidson announced at the start of April that pound;23m of that would go to education this year: pound;15m to schools, pound;4m to further education and pound;3.4m to higher education. But not until last week did the Assembly decide how much each school should receive, from pound;3,000 for the smallest primary to pound;25,000 for the largest secondary.

Welsh schools have so far escaped acute problems of teacher supply. Jane Davidson has said that, unlike in England, there are no general teacher shortages in Wales and that a crisis seems unlikely.

She cites figures for last year showing that nearly half of the Welsh authorities recorded no vacancies and the worst-hit only 15. But NUT Cymru, which represents more than half of schoolteachers, says schools in Wales face a “silent but growing crisis”, with an ageing staff who will all retire at once and many shortages concealed by staff teaching subjects in which they are not trained.

The Welsh Assembly is steadily getting to grips with the problems of a country where rural poverty and the death of heavy industry have left a legacy of high adult illiteracy, truancy and poor achievement by boys.

Its pound;27m Basic Skills Strategy, launched by Jane Davidson last month, covers everyone from pre-school children to adults. It will identify basic skills needs among adults unemployed for six months or more and develop new literacy and numeracy qualifications.

The latest annual report from the Welsh inspectorate shows that primary schools have made great strides with literacy and numeracy, despite strategies that are based on the spreading of good practice rather than compulsory hours (although many primary schools have, for instance, adopted the numeracy hour).

Now the same good practice approach will be applied to the problem years of KS3 where, as in England, standards dip. An acute problem in Wales is the large - and growing - gap between the performance of boys and girls, both in KS3 tests and at GCSE.

Last year, less than 60 per cent of boys reached the expected level at KS3 in all core subjects (English or Welsh, maths and science), compared with two-thirds of girls, and only 43 per cent of boys got five higher-grade GCSEs, compared with 55 per cent of girls.

This means Wales will probably fail to meet two government targets: that the difference in performance between the sexes should be halved, and that between 70 and 80 per cent of pupils should reach the expected level in KS3 in all core subjects by 2002.

But, despite continuing problems with truancy - in some secondaries, about a fifth of pupils regularly skip school - the Welsh are on target to cut the number of exclusions by a third by 2003.

The crumbling condition of many Welsh schools is also being tackled at last. The Assembly has earmarked pound;300m over the next three years towards ensuring that all schools are in good physical shape by 2010.

And work continues towards that exclusively Welsh qualification, the Welsh Bac, a broad exam combining the academic and the vocational that would replace A-levels. Its development was one of the pledges Rhodri Morgan signed up to when he formed a coalition with the Welsh Liberal Democrats last October.

Invitations to tender for a pilot scheme went out in March. The scheme appeared to have been dealt a blow when the International Baccalaureate Organisation refused to become involved, saying the guidelines put out by the Assembly were not broad enough. But the IBO’s brush-off was not a setback at all, sniffed the Assembly; they wanted to do their own - distinctively Welsh - thing anyway.