The independent Commission on School Reform has advocated a move away from a uniform approach towards greater diversity, with more decisions taken at local level.
Fundamental changes are needed to empower schools and better serve pupils from disadvantaged backgrounds, said the commission which has just published its final report By Diverse Means: Improving Scottish education.
It recommends a shift in the role of local authorities which, in many cases, are too involved with the day-to-day management of schools, the commission said.
Such a shift could give headteachers greater control over a range of areas including leverage to recruit and retain talented teachers to work in deprived areas by offering financial incentives.
The commission, chaired by educationalist Keir Bloomer, was set up in 2011 by the think tanks Reform Scotland and the Centre for Scottish Public Policy.
It has produced 37 recommendations covering areas such as continued development of the Curriculum for Excellence, targeted support for pupils and schools experiencing disadvantage, a centre dedicated to improving education outcomes in deprived areas and greater autonomy at school level.
The changes are needed to address "deep-seated problems" with the schooling system which have developed over decades, Mr Bloomer said.
"There is an assumption in Scotland that our education system in Scotland has always been and is now among the world's best. There may have been a time when that was true but unfortunately it is not true now," he said.
"Scotland's schools do an excellent job. The standard of education they provide is high and it is remarkably consistent across the country. But they are no longer world leading. If we want to be back again in the position of being the world's best then there is no alternative but to make some quite significant changes."
Turning to school governance, Mr Bloomer said: "The role of government and its agencies is strategic leadership. It is not micro-management. The role of local authorities is about co-ordination and about championing the interests of the individual child and family. The role of schools, increasingly, has to be about innovation.
"We are therefore suggesting that schools must be more empowered than they are at the present time, freer to take decisions that they believe to be in the interests of the young people in the circumstances in which they are found. The result of empowering schools will be to create a richness and diversity in the system which it currently lacks.
"Scottish education, at least at the macro-level, is astonishingly uniform and the problem with a uniform system is that it does not have the capacity to learn from its own varied experience."
Mr Bloomer said the commission ruled out a move towards academy schools which have been introduced in England where funding comes from central rather than local government.
But while local authorities would still be responsible for allocating money to education in their areas, the commission is "advocating a shift in the role of councils", he said.
"At the present moment, in many cases councils have a tendency to be too much involved in the day-to-day management of schools. We do think that once money has been determined for allocation to education then that should be delegated to schools and it should be as far as possible be delegated to schools without strings attached."
The commission further recommended that "talented staff should be encouraged to teach and remain in schools in the most disadvantaged areas".
He said: "Although the commission hasn't advocated that there should be some kind of financial premium (for such staff), the logic of what we are saying about delegation of resources to schools means that that is a perfectly feasible way forward.
"Schools should have greater freedom to attract and retain people than they have."
Education Secretary Michael Russell said: "Scottish education is good and, importantly, it is getting better. I am pleased the commission has recognised that Curriculum for Excellence provides the framework to continue those improvements.
"The report sets out a number of interesting recommendations that I am keen to explore further. That is why I am seeking to meet the chair of the commission to discuss how we can work together to build on what has already been achieved at an early date.
"I believe we have the right elements in place to secure a truly excellent education system and we are making progress in that regard. When I visit schools I see inspiring teachers and dedicated leaders rising to the challenge of delivering a modern education for their pupils.
"This can clearly be seen from the excellent inspection ratings achieved by a number of schools in recent weeks. Scottish education is working and I am determined to do everything I can to ensure progress continues to be made."
Conservative education spokeswoman Liz Smith said: "This is a first-class report which makes a very bold statement about why there is an overwhelming need to reform the decision-making process in school education.
"The Scottish Conservatives share entirely the view of the commission that the current structures result in too many cases where the drive for excellence is hampered by a lack of diversity in the way schools operate.
"The commission's belief that many more schools can raise standards if their heads and teachers are allowed to develop new ways of working is one which will strike an important chord with parents.
"This is one of the most thought-provoking reports in school education in recent times, made even more impressive by the breadth of political views within the membership of the commission."
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