Since their creation, the government has invested over £330m in ELCs and Curriculum Online which schools use to purchase accredited titles. Schools and suppliers had hoped that the system would continue beyond 2006, but it looks increasingly likely that ELCs will end in August 2006 when the current credits expire.

Speculation has been growing that Schools Minister, Lord Adonis has decided to end ELCs, but will replace them with equivalent funding paid directly to schools. Suppliers are less enthusiastic, arguing schools won’t buy software but will instead use the money to fill funding gaps in other areas. Suppliers are also concerned that ending ELCs just eight months after the launch of BBC Jam (previously known as the Digital Curriculum) will have a devastating impact on UK educational software developers.

If ELCs are withdrawn there will inevitably be a significant consolidation in the sector and the impending sale of Granada Learning may herald the start of a bumpy road for the local educational software industry.

• www.curriculumonline.gov.uk