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The Conservatives are considering scrapping the idea of ringfenced capital budgets for school improvement works, in a move that would make the flow of work in the sector much less certain.

It is understood that, if the party wins the next election, it wants to end the practice of having two funding streams for schools 鈥� one for continuing upgrade works and build projects, and a 鈥渞evenue鈥� pot that is used for other spending, such as staff.

Instead, a Tory government would allocate a certain amount of money to every school, which the school would use at its own discretion. This would mean it would not be committed to a fixed amount of capital spending.

It could also mean spending on construction receives a lower priority, as the impact of buildings on pupil performance is still unclear. Spending on teachers and classroom equipment is often deemed to have more short-term benefits.

A source close to the situation confirmed that the Conservatives 鈥渨ant to remove the distinction between capital money and other money鈥�.

However, the source added that the party was likely to have to develop some mechanism for ensuring school buildings did not fall below minimum standards because of a lack of spending.

It is also unclear whether major nationwide building programmes, such as the current 好色先生TV Schools for the Future initiative, would be maintained separately.

The source said: 鈥淵ou have to have safeguards for maintaining stock 鈥� something that says you have still got to do x, y and z.鈥�

James Bowyer, partner at EC Harris, said: 鈥淭he question is, how far is this going to go? It only makes sense if the government is clear about the outcomes schools will be measured on.鈥�

The development emerged as research by the Office of National Statistics piled greater pressure on the government to justify large amounts of spending on education. The report found that, despite spending increases of 拢30bn a year, value for money from schools has fallen steadily.