Almost a third of the annual pound;4.5 billion spent on education in Wales does not go to front-line teaching, according to a major new report.
An independent review of education spending by PricewaterhouseCoopers (PWC) found that 32 per cent of the total education spend - around pound;1.4 billion - goes on support services and administration rather than direct teaching and learning.
It also warns that the education sector will "struggle" to deal with national public sector spending cuts that are set to hit Wales in 2011.
The 87-page report, which took seven weeks to complete at a cost of pound;180,000, says a shift of just 2 per cent could free up an extra pound;82 million for the front line.
Eduction minister Leighton Andrews refused to be drawn on precise figures, but suggested that "over time" it might be possible to divert around pound;100 million to teaching and learning.
The overall tone of the report matches Mr Andrews' stated ambition to make the education system "smarter and simpler" - only last week the minister announced the end of large-scale education initiatives.
Although the report has been widely welcomed, some teachers and unions have expressed disappointment that it fails to call for a reduction in the number of local authorities and advocate direct funding for schools.
Mr Andrews said there will be no "radical restructuring" of local authorities, but he hopes the report will contribute to the "growing momentum" for greater collaboration at local level.
On the theme of simplifying governance, the report says that the Assembly government's education policy agenda should be refocused on the most "critical and beneficial" initiatives. It calls for both grant structures and the inspection regime to be simplified.
The report says that the most significant savings could be made through local authorities, schools and other public bodies sharing provision.
Schools could also join together in clusters to provide support services more cheaply, perhaps even sharing expertise, facilities and staff, it suggests. See next week's TES Cymru for more analysis and reaction.
Original paper headline: Revealed: the pound;1.4bn that fails to reach the front line