A government policy unit set up to drive through Tony Blair's first term education reforms is being scrapped under a shake-up in the Department for Education and Skills.

The Standards and Effectiveness Unit, David Blunkett's first initiative as education secretary after Labour's victory in 1997, was hailed by the new government as an engine for school improvement. Now insiders fear that disbanding the unit could eventually lead to the bulk of the department's in-house school improvement work being farmed out in lucrative contracts to the private sector.

Government Response: Department for Education and Skills

A DfES spokesperson said: "The changes within our schools directorate will in fact reinforce and increase our focus on standards by creating a new team whose key objective is continuing to improve education in our primary and secondary schools. Raising school standards remains a key priority for the government and this reorganisation will ensure that this continues."

Forum Response: Association of Teachers and Lecturers

Dr Mary Bousted, ATL general secretary, said: "The government's narrowly defined, intellectually impoverished, definition of standards has run its course. Test results have run into the sand - as they were bound to do sooner rather than later. Ministers know only too well that if standards are to improve, more of the same won't do.