Rather than squabbling over Tony Blair’s future in the wake of his third election victory, Labour MPs should perhaps be wondering how much longer the electorate will give them the benefit of the doubt on public services.

Since 1997-8, annual real spending by central and local government on schools has risen by a massive pound;16 billion to pound;38bn. And Labour has promised schools their share of a further pound;12bn increase in education spending by 2008.

Whoever is Prime Minister at the next election, probably in 2009, will have to convince the electorate that this extra cash has produced results.

So far, despite the appearance of shiny new buildings and state-of the art computer suites, the public remains sceptical. Research published by the Department for Education and Skills last year showed that more people thought secondary schools had got worse in the past three years than thought they had got better.

Primaries were seen in a more positive light, but even there, only 30 per cent of more than 3,000 adults polled believed standards had improved.

And it is not just the public who appear unimpressed by Labour’s record investment.

The National Association of Head Teachers is so concerned about the pressure on school budgets that it voted to pull out of the school workforce agreement.

So where has the money gone?

Complaints from unions about central government and its quangos siphoning off money which could be better used by schools may be justified, but the amounts are small.

The administration costs of four schools quangos - the British Educational Communications and Technology Agency, the National College for School Leadership, Qualifications and Curriculum Authority and Teacher Training Agency - almost doubled in the four years to 2003-4. But the extra spending amounted to just pound;66.8 million.

Heads then cite local education authorities siphoning off cash for other services. This is also true but again the impact is limited. Councils still spend more than the Government says they should on education.

At the same time, the amount retained centrally by LEAs for education services has fallen steadily as a result of central government pressure to delegate more money to schools.

So what about schools? What have they done with the extra pound;780 per pupil given to them since 1997-8?

There are three quick answers - staff, buildings and new technology. Wages have swallowed the largest chunk. More than a third of the extra money given to schools has gone into the pockets of staff. In some primaries, wages account for more than 90 per cent of the school’s budget.

The teacher recruitment crisis of the late 1990s, the introduction of performance pay and heads’ desire to use extra money to employ more staff have all pushed up schools’ pay bills.

Official figures show teacher numbers have increased by a fifth to 432,000, while average teachers’ pay increased from pound;22,000 in 1997 to more than pound;30,000 in 2003.

In 2003-4 schools spent almost pound;16 billion on teachers’ salaries and associated costs such as pensions and national insurance.

Schools with a high proportion of experienced staff have faced sharply rising costs as teachers have benefited from performance-related pay.

At the same time, the number of support staff has more than doubled to 266,000, with extra responsibilities putting upward pressure on their pay too.

These extra staff have helped to cut adult:pupil ratios, reduce the burden on teachers and ensure pupils with special needs receive individual attention.

But even union leaders admit that privately employing extra staff is not always the best use of money.

One said: “I have been to schools where there are four adults in a class.

You have to ask whether this is the best use of resources.”

Spending on school buildings is a more visible way of showing taxpayers their money has been well spent.

Labour arrived in Government committed to tackling a pound;3bn backlog of school repairs but has spent much more.

School capital funding from the DfES has increased by around pound;300 per pupil - even before work funded through the off-balance sheet private finance initiative is included.

Building work has been one of Labour’s undoubted success stories, but that has not stopped some questioning whether at least some of the cash could have been better spent.

Heads have complained that some initiatives, such as removing outdoor toilets, have been gimmicks, and during the funding squeeze of 2003, ministers were forced to allow heads to use some capital funding to prop up their general budgets.

The other big beneficiary of increased school spending has been new technology.

Individual schools have spent hundreds of thousands of pounds over the past few years buying up-to-date computers and interactive whiteboards.

Where until recently a teacher would stand in front of a class with chalk and a blackboard, they can now use whiteboards to show videos, web pages or other material to illustrate the points they are trying to make.

Research by the Royal Economic Society has called into question the impact of ICT on standards, but teachers’ leaders have few doubts about its benefits.

Mary Bousted, general secretary of the Association of Teachers and Lecturers, said: “In many schools now every classroom has an interactive whiteboard.

“They have completely transformed teaching and learning.”

Why then, despite these improvements and rising exam scores, is the public less than impressed by schools’ progress?

John Bangs, head of education at the National Union of Teachers, argues that ministers have failed to sell improvements to the public.

“When the Government says there’s a problem with secondary schools, parents think there is a problem. The Government needs to celebrate the genuine success of schools in raising standards.”

Mrs Bousted agrees. But she also believes schools can do more to ensure taxpayers get a bang for their bucks.

She said: “In some schools it is undoubtedly the case that heads need better financial management support to ensure money is being spent well.”

But John Dunford, general secretary of the Secondary Heads Association, counters that the Government has failed to target money where it is most needed.

“There are a considerable number of schools which have deprived pupils but do not get extra money,” he said.

The Government has also wasted money on initiatives such as the Leadership Incentive grant, which was supposed to improve school management but which, he argues, has done little to raise standards.

Implementation of the workload agreement, not to mention recent demands by heads and pressure for a national pay structure for support staff, suggests that the pressure on school budgets is likely to grow rather than ease.

But schools should perhaps think twice before they accuse the Government of underfunding.

If after 12 years of rapidly rising spending the public is not convinced there are real and significant improvements, then voters will take their revenge at the ballot box. Anger at the perceived state of London schools - less than half of parents are satisfied with the secondaries in their borough - is believed to be one reason the swing against Labour was stronger in the capital.

Opposition parties will not hesitate to point out that the pound;16bn extra for schools is equivalent to pound;326 a year for every man, woman and child in England.

The political pendulum could then swing back against high public spending and in favour of tax cuts.

If that happens, Labour politicians, local authorities and schools will be left with just two choices. To blame themselves or blame each other.

Primaries pay price for PPA time

Chris Davis, head of Queniborough primary, Leicestershire, spends about Pounds 430,000 of the school’s pound;540,000 budget on staff salaries. A further pound;10,000 is spent on agency supply staff.

And the chair of the National Primary Headteachers’ Association said this will have to increase in September if he is to provide teachers with the 10 per cent non-contact time promised in the workforce agreement.

More than half of the association’s members who have taken part in a poll on the organisation’s website believe cover should be undertaken only by qualified staff, something that would drastically increase the cost of the agreement. Fewer than one in five believe the agreement will be easily introduced.

Mr Davis said: “I am not going to be able to do what I want to do and introduce time for planning, preparation and assessment using qualified staff.

“I do not think primary schools will be able to implement PPA without additional funds.”

He believes initiatives such as the specialist schools programmes have increased an historic funding imbalance which favours secondaries.

Much of the rest of his school’s budget is spent on necessities.

These include approximately:

* capital spending pound;33,000

* rates (council tax) pound;7,700

* support services (including bursar, payroll, personnel and SEN assessment) pound;7,000

* building maintenance pound;2,500

* water pound;2,500

* refuse collection and window cleaning pound;2,500

* grounds maintenance pound;2,000.

The school spends about pound;40,000 a year on furniture, equipment and curriculum materials.

Mr Davis said that while staff costs have risen, computers are falling in price and have additional knock-on savings. The rise of the internet means schools are free to spend less on books.