Shabby schools with peeling paintwork, leaking roofs and outside toilets. Pupils sharing textbooks, able only to take photocopies home. It scarcely seems a recipe for success.

But this week Labour’s appeared to live up its pledge that education was its top priority - putting its money where its mouth is and giving schools an extra Pounds 2.3 billion while allocating Pounds 3.5 bn to its Welfare to Work programme.

The money will go on projects throughout England, Scotland and Wales. A total of Pounds 1bn has been earmarked to raise standards and there will be a one off payment Pounds 1.3bn to be spent on repairs over the next five years.

On the face of it the Budget appears to have met local authorities’ demand for an extra Pounds 900m - that, however, was based solely on the needs for England’s schools.

So the amount of cash available will be still fall short of what is actually needed and heads, governors and councillors will have to wait five months to see what is allocated in the local government settlement.

Will the extra Pounds 1bn be on top of the 1.2 per cent increase agreed by the previous administration for local government? Or part of it?

The Conservatives claimed that school budgets last year would rise by 3.4 per cent. In fact spending limits saw that rise capped at 2.5 per cent in three-quarters of education authorities.

Councils are already spending Pounds 656m above what the Government believes is necessary for education. Without the extra Pounds 900m they said there would be real problems.

Councils say that half the extra money - Pounds 500m - will go on an inflation-linked pay rise for the profession. Last year only 54 per cent of LEAs fully funded the 3.3 per cent staged pay award for teachers, putting a strain on already stretched school budgets.

By the turn of the century there will be more than 7.5m pupils in schools, with the most dramatic increase coming in secondary schools - the most expensive sector. Department for Education and Employment forecasts show that an extra 200,000 secondary pupils will be in schools in 2000.

In contrast, projections for primary schools show a drop of 15,000 children between now and 19992000 and a 30,000 decrease the year after. In theory this should make Labour’s pledge to cut primary classes to 30 or under for every five, six and seven-year-old easier to achieve.

In practice, though, local authorities are limited in what they can do about class size. They are constrained by local management which allows heads to decide what they want to spend their money on, and by admissions limits.

New figures released by the DFEE last week revealed that one in three primary children is now taught in classes of 31 or over. In total, 1.35m children - 85,000 more than last year - are in classes of 31-plus. A report by IPF Ltd - the commercial arm of the Chartered Institute of Public Finance and Accountancy - claimed that an extra 2,400 teachers and 1,800 additional classrooms would be needed if class sizes were reduced.

Stephen Byers, the school standards minister, said: “We cannot and will not stand idly by while our five, six and seven-year-olds and their teachers face the daily misery of overcrowded classrooms.”

A survey of education authorities, conducted by the Local Government Association to back up its special pleading to Government for more money, reveals cuts of Pounds 122m to delegated school budgets last year. Discretionary awards to students were cut by Pounds 24m, administration and support by Pounds 21m, and adult education and youth services by the same.

It shows that the number of higher education discretionary awards given out by councils dropped by 43 per cent - from Pounds 71m to Pounds 18m - between 1991 and 1995. The value of an average award fell from Pounds 1,690 to Pounds 1,020.

In further education there has been a 19 per cent cut from Pounds 151m to Pounds 84m and the average award per holder has gone from Pounds 630 to Pounds 520 over the same period.

Officials advising the Local Government Association’s education committee warned: “Authorities have a legal obligation to consider the request for awards and there is a risk that commitments cannot be met if substantial additional reductions are made.”

They claimed there was little scope for further cuts in local authority administration where spending has dropped from Pounds 1.15bn in 1990 to Pounds 672.2m in 1995.

Survey evidence showed that a further Pounds 21m of cuts have been made to admin support in 199798 to prevent further real-terms reductions in school budgets. However, the Education Act 1997 and other proposed legislation may increase the need for administration. “The scope for significant further reductions in this area will not be possible if LEAs are to meet their statutory responsibilities,” officers warned.

On top of this councils are fighting a battle for more special needs funding. The number of pupils who are statemented rose from 153,000 in 1991 to 227, 000 in 1996 - an rise of 74,000 or 48 per cent.

And meanwhile the buildings continue to crumble. The Society of Chief Architects of Local Authorities recently revealed a dramatic shortfall in money spent on all council buildings over the past three years. The average LEA was identified as spending less than a third of what was required to cover essential repairs and maintenance. It concluded that if the trend continued some buildings would be unusable in 10 years’ time.

The local authority survey revealed a total need for capital spending of Pounds 5.9bn over the next three years with Pounds 3.3bn to meet outstanding repairs and maintenance.

Up until this week Government support for capital expenditure per pupil had dropped from Pounds 74.41 in 1992 to Pounds 56.17 in 1997. It is now set to average Pounds 150 per head.

WHAT COUNCILS WANT THE MONEY FOR

Pounds 500m: inflation-linked pay rise for teachers;

Pounds 137m: increased pupil numbers;

Pounds 128m: other expenditure pressures;

Pounds 93m: to cover the ongoing cost of last year’s staged pay award;

Pounds 41m: special educational needs;

Pounds 25m: adultyouth awards;

Pounds 10m: home-to-school transport.