The defection of Tory MP Emma Nicholson to the Liberal Democrats, reducing the Government majority to three, has already set the political tone for 1996.

With two controversial Education Bills due to go before MPs shortly, one of the ministers facing the greatest potential difficulty in getting business through Parliament in the coming year is Gillian Shephard, the Education and Employment Secretary.

Already one of the Bills announced just two months ago is in serious trouble - with plans to hand over control of student loans to the banks delayed by a year, beyond the last possible date of a general election. Although the necessary legislation will go ahead, Opposition politicians are accusing ministers of being in disarray.

Mrs Shephard is also in trouble over plans to introduce nursery vouchers and expand the grant-maintained schools sector - schemes apparently foisted on her against her will by Prime Minister John Major.

It is expected that these will be included in a second Grant-maintained Schools and Nursery Bill due to be published soon, implementing nursery vouchers, new financial arrangements for grant-maintained schools and, perhaps, a fast-track path to GM for church schools.

The churches have made plain their opposition to the potential fast-track proposal which they believe amounts to preferential treatment. Anglican bishops and Catholic peers could combine with the Opposition in the Lords to defeat it.

Moderate Tories such as Demitri Coryton, chairman of the pro-local-government Conservative Education Association, believe education ministers should repel the radical policies on vouchers and opting out being pushed by Mr Major’s Downing Street policy advisers.

He said: “This year I hope the Government will continue its improving schools initiative, developments in post-16 education and lifelong learning but I also hope that it will resist the attempt to coerce schools to opt out. It could have terrible consequences if they remove parental choice just because [schools] aren’t doing what some ministers want them to do.”

The debate between Tory radicals and pragmatists is set to intensify in the coming year, against a backdrop of a Prime Minister who may be forced to hold an election ahead of his preferred date, in the spring of 1997.

Although he has said he intends to continue into 1997, the choice may not be his. His Government could face a majority of just one following two forthcoming by-elections, and the cold snap has been an extra worry to the Whips, who are on full alert for winter chills caught by their older members.

The introduction of nursery vouchers in four pilot authorities should give the Government enough worries. Parents will be able to receive the vouchers in February: the other councils will watch hoping the idea falls flat on its face.

The pay review body’s report is due out at the end of the month and informed punters are going for a 3 per cent-plus rise. Councils will say they cannot afford it on top of increased pupil numbers and other costs. Gillian Shephard will argue that she has put enough money in.

Peter Smith, general secretary of the Association of Teachers and Lecturers, believes that the teacher unions, together with parents and governors will have to continue their campaign over class size and school budgets. But he does not expect any industrial action.

He is also pressing for the unions to make a positive defence of the teaching profession in the failing schools debate, which will continue this year. And he warns the Labour party that it will have to try harder to get the unions on its side in the event of an election.

The Government and Labour are both talking tough on standards and are making dire threats to bad teachers. And some of the unions are already talking about trying to do deals with a future Labour government.

Professor Michael Barber, dean of new initiatives at London University’s Institute of Education, expects other education associations (the so-called hit squads) to be set up. He hopes they will have more success in saving schools threatened by failure than the association of which he was a member achieved at Hackney Downs, which closed last month. Professor Barber also believes the debate will shift from school failure to identifying individual failure.

In September the new slimmed-down curriculum comes into effect at key stage 4 and schools are now receiving the new GCSE syllabuses for full and short courses. For the first time all 14 to 16-year-olds will have to study technology and a modern language (which can be covered by a short course).

But the key event in the curriculum calendar is the publication of Sir Ron Dearing’s review of 16-to-19 qualifications, scheduled for Easter. The main issue here is the future of the beloved A-level. Those hoping for one exam encompassing both vocational and academic options can expect to be disappointed.

A more likely development is a new diploma offering pupils in their first sixth-form year the chance to take five subjects, going on to take the traditional two to three A-levels.

General national vocational qualifications are expected to acquire the less tongue-tripping name of applied A-levels.

Labour’s post-16 and higher education policy papers are still on the new year’s “to do” list, though party sources promise its post-16 curriculum document is imminent.

While it is now accepted that the tight four-year deadline for visiting all schools will eventually be relaxed, 1996 will see the Office for Standards in Education struggling to finish off the first cycle of inspections. Autumn will see the start of the final year for secondary inspections and the third year for primary. OFSTED is still short of primary inspectors and will continue to advertise for recruits.

Politically sensitive reports are expected on examination standards and literacy in three inner London boroughs. Also, the results of the blanket inspections of Waltham Forest and Lambeth should be available in time for Christmas.

Teacher recruitment could become a problem. Universities have already warned the Government that students are shunning teacher-training courses as the economy appears to improve.

Meanwhile the Teacher Training Agency must get to grips with the task of reforming in-service training. It must devise a new headteachers’ qualification to fulfil promises made by Gillian Shephard at the last Conservative party conference. And it is looking for a way of way of financially rewarding the best teacher-training courses and punishing the worst without de-stabilising the entire training system and enraging the providers.

In the world of further education, 1996 will see an escalation in the drive for greater efficiency - a euphemism for cuts. FE must cut its capital spending by Pounds 30 million, with the introduction of a three-year austerity budget.

Meanwhile, the much-vaunted Higginson committee of inquiry into information technology will spell out the need for Pounds 84m minimum investment in computers, with barely a hope of finding it.

In Scotland, 1996 will see change in local government with the creation of 29 single-tier authorities on the mainland to replace the nine regions and 53 districts.

This has caused fears that the smaller councils will be unable to provide the same level of service as the former larger education authorities, with special needs and the arts particularly at risk.

Likewise, in Wales the 22 new unitary authorities will take power in April, as will the first tranche in England where Avon, Cleveland and Humberside will be reorganised and York will split from North Yorkshire.