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The proposed changes are likely to affect school improvement services, careers information, education welfare services and services provided by the voluntary sector and funded through the former Children's Fund and Standards Fund Grants.
It has been revealed the Standards Fund Grant, which funds children's music lessons, could face the axe and take with it dozens of jobs.
And a Teesside MP is now leading the fight to stop ministers taking away the Standards Fund Grant which is used to pay for thousands of children's music lessons.
Warwickshire schools have already benefited to the tune of pounds 4 million over the last three years from Standards Fund grants for computer equipment under the Government's National Grid for Learning.