Becta, the education IT procurement quango, is to be scrapped as part of the new government's £6.2bn cuts this year, announced by George Osborne this morning.
Schools are expected to get more control over their technology purchases as a result. Becta did not buy computers and software for schools, but instead drew up framework agreements that bound local authorities to particular vendors and packages.
Staff were told the organisation will close down by November.
It is unclear what will happen to the quango's Home Access scheme, which it signed the contracts for only in November, and aims to provide laptops and broadband to poor families at home.
Becta was established by Labour in 1998. In recent years it has been hit by controversy over its policies around open source and procurement from smaller vendors. While in opposition Osborne himself suggested wider adoption of open source software could slash school IT spending by half.
Labour had already earmarked Becta's £112.5m annual budget for a £45m cut over the next two years.
Last year Becta's £220,000-per-year chief executive Stephen Crowne defended it against cuts, claiming it "saves many times more than Becta costs to run".
Today he said: "Naturally we are very disappointed at the government's decision.
"Becta is a very effective organisation with an international reputation, delivering valuable services to schools, colleges and children. Our procurement arrangements save the schools and colleges many times more than Becta costs to run. Our Home Access programme will give laptops and broadband to over 200,000 of the poorest children.
"Our top priorities now are to make sure we have an orderly and fair process for staff, and that as far as possible schools, colleges and children continue to benefit from the savings and support that Becta has provided."
The Qualifications and Curriculum Development Agency, the quango responsible for coordinating examinations, is also expected to be culled following legislation. Overall the Department for Education will be required to trim its budget by £670m.
Across the whole government only the MoD and Department for International Development will be immune from this year's cuts. ®