Speaking in a debate with the Conservative and Liberal Democrat shadow children's secretaries, Michael Gove and David Laws, Bousted said the watchdog was inefficient.
She said: "In my view Ofsted is now a force for lowering standards in schools, not a force for raising standards."
Bousted said that the government could make efficiency savings by slimming down the watchdog. "If you want to save money in the next comprehensive spending review then Ofsted costs you a bundle," she said.
Her comments came as Michael Gove warned that school support staff pay could be affected by the economic downturn.
Kathryn Booth, a teacher from Dorset, asked Gove and Laws if they would welcome national pay and conditions for support staff, should their party come to power.
She asked them both to endorse the new School Support Staff Negotiating Body, which the government has recently set up.
Gove said: "I am conscious that we're entering an economic climate in which some very tough decisions are going to have to be made by any future government. Support staff certainly do need to have their concerns and conditions respected and heard. But we also need to be clear that politicians shouldn't make promises about future rewards that they may not be able to keep."
Laws said the Liberal Democrats would support the new body. He described support staff pay and conditions as "disgraceful".
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