Despite frequent criticisms of small schools, evidence collected over the last decade indicates that smaller English primary schools offer a curriculum and maintain standards compatible with those offered by larger institutions. In recent years, informal clustering arrangements have enabled small schools to increase the range of subjects offered, improve resources, and end the isolation of both teachers and pupils. School clusters typically develop through a three-stage pattern consisting of initiation (early connections and limited involvement among schools), consolidation (implementation of cluster agreements but with minimal alterations to existing practices), and reorientation (staff "ownership" of the cluster leading to greater reflection on and innovation in teaching strategies). Targeted training approaches by both internal and external support persons facilitate the transition from one stage to the next. Recent developments such as devolved budgeting and the demands for increased specialization resulting from the National Curriculum may require more formal cluster arrangements, called federations or consortia, to deal with matters such as joint hiring, common purchasing policies, and shared timetables. Legislation will be required to allow individual schools to delegate some of their powers to the federation management committee. Government funding of pilot projects would allow existing clusters to experiment with management strategies. (Author/SV)