Children’s minister Tim Loughton confirmed plans to decommission the national electronic common assessment framework (eCAF) system in a statement to parliament.
The government had been consulting on getting rid of the system since the Munro report into child protection argued that nationally prescribed IT systems constrain local innovation.
Officials also carried out a "market sounding exercise" to see if a private company would take over the running of the system from government, but no suitable company was found.
A spokeswoman for the Department for Education said: "The consultation and market sounding exercise have not provided compelling evidence that the government should continue to fund the national eCAF system.
"Ministers have therefore decided to stop the department’s support for national eCAF and to decommission the system in 2012."
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