Four out of five people who use education services in Wales think they are good, and nearly two out of five are expecting improvements in the coming years.
But local government services will need to improve their performance if they are to deliver on such high public expectations, according to a new report.
And "institutional resistance" could stymie key education reforms - including the foundation phase for three to seven-year-olds and a wider choice of learning programmes for the post-14s.
Public service reform needs to go "further and faster", according to a year-long review commissioned by the Assembly government and led by Sir Jeremy Beecham, the first chairman of the Local Government Association in England.
The 103-page report says councils, public services, and private and voluntary sector organisations should join forces to improve standards, and that Wales could become an example of how to run good services in a small country.
Under the banner of First Minister Rhodri Morgan's "clear red water", the Assembly government has shunned New Labour's so-called choice agenda.
English policies, such as Tony Blair's controversial school reforms, have been given a firm "No thank you" from Welsh ministers.
But Sir Jeremy's report warns a "silo-based" mentality in the public sector and a "cosiness" that inhibits effective challenging of mediocre services is holding back reform and improvement.
One area of underperformance is school improvement, says the review, with local authorities lacking the capacity to challenge and support schools to improve.
But more could be done if, for example, all authorities pooled their resources and provided joint advisory and curriculum services to schools - as ESIS and Cynnal already do, for respectively five and three authorities in the south and north.
Dr Philip Dixon, director of the Association of Teachers and Lecturers Cymru, endorsed ESIS and Cynnal as good examples of collaborative working.
But he said LEAs should be required to set up joint services.
He added: "The 'cosiness' in Wales means that people are afraid sometimes to change the way in which others are working.
"Where, for example, the Assembly government has required FE colleges to apply certain policies to give FE lecturers pay parity with schoolteachers, that has almost been achieved - by using the levers of finance."
The report highlights other areas of education where progress on improving provision has been slow, or barriers to progress exist.
It says there has been little progress on proposals dating back to 1999 to rationalise sixth-form and FE provision to improve range and quality for learners.
And it notes that delivering the foundation phase and 14-19 learning pathways reforms will "make even greater demands on capacity at local authority level".
'Beyond boundaries: citizen-centred local services for Wales', see www.new.wales.gov.uk