Peter Peacock told the conference he was considering giving councils more control over the national priorities action fund.

Cash is currently routed through seven different funding streams to support a string of initiatives covering the school in the community, social justice, school discipline and ethos, school infrastructure, the new National Qualifications, the recommendations of the disciplinary task group and nutrition in schools.

“We will do what we can to simplify funding for education and children’s services,” Mr Peacock said in his speech.

Officials said later the intention is to allow authorities to move money between different strands. “We would need a lot of convincing to keep the dividers in the fund if this is not helping authorities to deliver the improvements we are all seeking,” one said.

He added: “The message is that, while we will not be removing the policy objectives that these themes support, how authorities get there should be a matter only they can decide, and we don’t want to be second-guessing local decision-making - so long as they can show they have achieved the agreed outcomes.”

The fund has allocated money over a three-year period to support the national priorities - pound;133 million last year, pound;145 million this year and pound;150 million the year after.

Mr Peacock raised the possibility of schools being empowered with a budget of their own to commission services from other agencies. “But for that to happen,” he said, “there must be better institutional links between schools and structures outside the school.”