Archie Morton, Argyll’s director of education, must be wondering if his hard-pressed pound;45 million budget will ever give him any room for manoeuvre. He has endured almost pound;5 million in cuts during the first three years of the new unitary authorities, which is 9.8 per cent of its educational expenditure.

“It has been a desperately difficult time financially,” Mr Morton says, “but we have none the less been able to improve pupil attainment through the hard work of our staff and, by tackling problems in a different, more effective way, we continue to offer high quality in all that we do.”

Although budget cuts, transport issues and school rationalisation have dominated the Argyll scene, parents not directly hit by closures seem to agree. From the perspective of a school board chair for five years, Margaret Hirst at Park primary in Oban, says nobody has raised any concerns about educational issues in that time - which she interprets as satisfaction with the service.

Graham Oram, school board chairman at Ardrishaig primary, is also satisfied and believes the majority of parents are as well. “I have every sympathy with the intolerable financial pressures that the council faces,” Mr Oram says.

Argyll should not perhaps worry unduly. It has more influence than most authorities. After all, it runs a school whose products help run the country. Dunoon Grammar has now joined the ranks of the private schools which traditionally supply the governing classes.

It is the alma mater of John Smith, the late Labour party leader, George Robertson, the Defence Secretary, Brian Wilson, the Education Minister, and Lord MacKay of Ardbrecknish, a former Tory education minister - not to mention Iain Thorburn, a former deputy editor of the TESScotland.

Remoteness and size dominate everything in Argyll, education included. The area is 120 miles long from the island of Coll in the north on the same latitude as Arbroath to Kintyre which is in line with Blyth in Northumberland. It stretches 100 miles from Bridge of Orchy in the east to Tiree in the west. Just to complete the scattered picture 23 schools, including four secondaries, are on 15 islands.

But the council, with no natural centre, has not taken these challenges lying down. It has embraced the technological revolution vigorously and video-conferencing has almost become a way of life. This allowed Archie Morton to “join” a school board meeting in Mull last year to discuss the vacancy for the head’s post at Bunessan primary -without leaving Dunoon.

The education department’s travelling expenses have been cut by a fifth. Teachers travelling from the islands also face big bills unless the authority helps out electronically. Attending a training seminar in Glasgow from Tiree could cost more than pound;200. The coming year will see some further advances, however, as the council uses part of its pound;341,000 from the Government’s new deal money to furnish all remaining primaries with dedicated computer links. Modems and classroom telephone lines will be put into every school.

Allan Macaskill, the education chairman, is particularly proud of Argyll’s IT record which he believes is at the cutting edge of developments in the UK. “The authority was identified as one of only two in Scotland which use IT as a way of reducing staff and people isolation,” Mr Macaskill says.

But pupil travel still has to be done the old-fashioned way. The result is a pound;3.4 million budget which is 7 per cent of overall education expenditure, the second highest school transport costs of any local authority.

Argyll believes its disadvantage is worsened by the failure to provide a special island needs allowance, as in Orkney, Shetland and the Western Isles, despite having 26 populated islands.

In the meantime Argyll has - at least until now - struggled to maintain a primary school closures programme in the face of a predicted 18 per cent drop in the number of five to 16-year-olds over the next 15 years (against an overall population fall of only 1.73 per cent). The scoreline currently reads: three closed, two reprieved.

Three other primaries were to have been on the fixture list for next year but these were put on hold by the education committee last week pending full consideration of a Scottish Office cash “bribe” of pound;440,000 to rationalise schools, Argyll’s share of pound;15 million available nationally. The money is to be used to carry out improvements in schools receiving pupils from those that are closed.

The education department believes another six primaries could shut as part of this exercise which will not only eat into the council’s 5,000 surplus primary places and reduce long-term running costs but also fund the adaptation of schools for pre-five and community uses.

Dick Walsh, the council’s leader, was adamant last week that parents will have to decide between having a school on their doorstep and good quality education. As a report to the education committee stated: “The convenience of having a nearby school for all is provided at the cost of poorer facilities and fewer teachers for all.”

A rural setting, of course, is no shield against national problems. Argyll has taken its share of Government money to improve early reading and number. It is also one of 18 councils to receive another cash flow of pound;158,000 over three years to set up alternative systems to exclusion at Lochgilphead High and Hermitage Academy in Helensburgh.

The authority was one of the four trail-blazers for nursery vouchers, an experience which Mr Morton believes has not been a waste of time despite the abandonment of the scheme. It inherited two council-run pre-five centres from Strathclyde and now has 19, catering for 52 per cent of four-year-olds.

The voucher experiment provided valuable lessons on the most effective way of providing nursery education in a rural authority, according to Ronnie Gould, head of educational support, not least in ensuring that the council did not put at risk the viability of the voluntary and private sectors which provide places for another 35 per cent of four-year-olds.

But, as with IT, Argyll has made a virtue out of the necessities forced upon it. Twenty-four primary school “co-operatives” were set up to link isolated schools, 80 per cent of which have fewer than three teachers. The very largest primaries co-operate with themselves.

Chris Shirley, Argyll’s quality standards manager for education, says the structure acts as a support network for staff, a focus for developing curriculum materials and a means of sharing teachers round schools which benefits the pupils as well as the staff. Co-operatives also help to secure bulk purchasing deals and work with their secondary schools as required.

Inevitably, however, budgetary realities have intruded and Mr Shirley admits the seven area co-ordinators appointed to service the co-operatives have had their time “drastically reduced”.

The constraints of cash are clearly in danger of squeezing out innovation in Argyll as they are everywhere else, leading to a local education service which may have high standards but is rapidly becoming standardised.