Becta, the Government's educational computing agency, this week published a critical report on schools' information management (Sims) software.
It said that Capita, the leading support services company, has a near-monopoly in the market with more than two-thirds of schools using its Sims systems for such activities as timetabling and compiling compulsory annual data returns for the Department for Education and Skills.
Becta said evidence from councils indicated that Capita's systems were often considered poor quality and frequently contained bugs. Figures from the agency show that the price of Sims software for a typical primary more than doubled from pound;144 in 1999 to pound;380 in 2004. In secondaries, the rise was from pound;576 to pound;1,900.
Schools have also been spending increasing amounts on support staff to update the software and fix glitches. Becta estimates that the total cost of running information management software in England's schools exceeds pound;235 million a year.
The agency also criticises the DfES for overburdening schools with requests for computerised information. Collecting pupil data is a key part of the Government's drive to "personalise" learning.
"There is an urgent need for some stability in relation to the ever-escalating requirement for more and more data to be provided by schools," the report said.
Earlier this year, secondary schools reported problems with an upgrade of Sims. The Secondary Heads Association received 79 complaints in 24 hours as secondaries struggled to fulfil their census requirements.
Martin Ward, SHA deputy general secretary, welcomed the Government's plan to investigate ways to improve the software systems and open them up to more competition.
Capita said that more school staff are now using Sims than five years ago and that overall costs per user had actually fallen.
"Sims is a far more complex product today. It is easy to use, saving many hours a week for teachers and cutting administrative costs," said a spokesman.