Headteachers have complained that annual 1 per cent efficiency savings required of local authorities by the Assembly government are leading to direct cuts in their budgets, and could mean redundancies and bigger class sizes.
But Jane Davidson, minister for education, lifelong learning and skills, said examples of good practice would be shared with directors of education, schools and heads in the new year.
Speaking at last week's National Association of Head Teachers Cymru's annual conference in Ewloe, north Wales, she said: "We want to see efficiency savings rather than the cutting of services.
"It doesn't seem appropriate that some authorities have made these decisions without thinking about frontline services."
Efficiency is about better ways of working, for example, by improving procurement practices or encouraging greater collaboration, she said.
Schools are included in this drive, so LEAs might revise school transport arrangements or redeploy staff in schools with falling pupil numbers, she suggested.
The Assembly government is not asking local councils to target school budgets, but efficiencies are necessary because the growth in overall government funding is slowing down, she warned.
She added: "There are more teachers, more support staff, smaller class sizes and the best-ever teacher-pupil rations. However, public services must become more efficient if we are to sustain improvements."
Value Wales, the Assembly government's procurement body which aims to get better value from public spending, is identifying examples of good practice and drawing up an action plan for LEAs and schools.