How the trend toward school-based management since the 1988 Education Reform Act has affected racial educational equality in England and Wales was studied through an examination of the policies and practices of a British Local Education Authority (LEA), identified as Woodshire. A review of the policies, practices, and events in the Woodshire district was supplemented by in-depth study of four Woodshire secondary schools. The Woodshire LEA is a nonmetropolitan county in England that experienced a severe cut in its educational budget during the study period. There is a relatively low number of ethnic minorities in Woodshire, but the largest of the ethnic minority groups is Pakistani. Interviews with members of the governing bodies of the four targeted schools, document reviews, and observations in the district have provided detailed empirical evidence that racial equality has not benefited from the move to local management of schools. In fact, racial equality has been disadvantaged because of a number of factors. The principal factor at work has been the noninterventionist stance of the LEA, which has attempted to maintain noncontroversial political positions. After discussions of the LEA, chapters focus on: (1) race and school policy; (2) school government and race; (3) English as a second language; (4) cultural issues; (5) student racist behavior; and (6) relations with ethnic minority parents. (Contains 2 tables and 24 references.) (SLD)