INFORMATION AND STATISTICS WERE COLLECTED FOR INMATE RECEPTIONS, POPULATION TRENDS, TRAINING, EDUCATION, RECREATION, PRISON INDUSTRIES, EMPLOYMENT, BUILDING PROGRAMS, HEALTH, HYGIENE, WELFARE, PREPARATION FOR RELEASE, ADMINSTRATION, AND STAFF. THE NUMBER OF INMATES ADMITTED TO PENAL ESTABLISHMENTS IN 1978 ROSE FROM 17,540 IN 1977 TO 17,574, WHILE THE AVERAGE DAILY POPULATION INCREASED BY 161, FROM 4,871 TO 5,062. THE NUMBER OF MALES IMPRISONED FOR NONPAYMENT OF FINES WAS 6,744, A DECREASE OF 285 OVER 1977; THE NUMBER OF FEMALES SERVING SUCH SENTENCES, HOWEVER, ROSE SLIGHTLY FROM 397 IN 1977 TO 407 IN 1978. THE PRISON POPULATION HAS REMAINED FAIRLY STABLE SINCE 1973. SHOTTS PRISON, DESIGNED TO HOUSE 1,060 MALE INMATES, OPENED IN 1978; HOWEVER, THE NUMBER OF INMATES IS RESTRICTED DUE TO THE DEFERMENT OF THE BUILDING OF TWO MAIN BLOCKS WHICH WILL EACH HOUSE ABOUT 500 INMATES. THE BULK OF 1978 CAPITAL EXPENDITURE WAS COMMITTED TO THE REDEVELOPMENT OF EXISTING ESTABLISHMENTS. WITH THE INTRODUCTION OF NEW PRODUCTION FACILITIES AND TECHNIQUES IN RECENTLY COMPLETED PRISON WORKSHOPS, FRESH MARKETING OUTLETS HAD TO BE FOUND TO MEET THE INCREASED VOLUME OF MANUFACTURED ITEMS. THE POLICY OF PROVIDING MORE SKILLED EMPLOYMENT FOR INMATES HAS BEEN EFFECTIVE, AND ALTHOUGH THE NUMBER OF INMATES RECEIVING VOCATIONAL TRAINING WAS FEWER THAN THE PREVIOUS YEAR, THE RANGE OF COURSES OFFERED HAS INCREASED. DIFFICULTY WAS STILL ENCOUNTERED IN RECRUITING SPECIALIST STAFF, EVEN THOUGH THERE WAS A NET INCREASE OF STAFF TO 2,602. THE SCOTTISH PRISON SERVICE STAFF COLLEGE CONTINUED TO PROVIDE A WIDE RANGE OF TRAINING COURSES, FOR SPECIALIST OFFICERS. TABULAR DATA ARE PROVIDED IN THE APPENDIXES. (AUTHOR ABSTRACT MODIFIED--RCB)