Wastage of public spending may aid Tories

London Briefing: Tony Blair has repeated his belief that "education, education, education" is the key to Britain's economic future. Nothing controversial there, but the government is clearly concerned that not enough voters are paying attention to the achievements of the past few years.

According to Ruth Kelly, education secretary, there have been 28,000 new teachers and 105,000 new support staff.

Similar claims are made for other aspects of public sector provision, notably healthcare and crime. Hospital waiting lists are down as are, apparently, burglaries. Suddenly, all those targets so beloved of New Labour are being met.

The trouble with such claims is that the electorate is getting more sophisticated and refusing to take them at face value. We are left to wonder if there really are 28,000 extra teachers or, in reality, a much lower number once we net out those who have retired or left the profession. Even if these are net figures, most of us would have preferred an extra 105,000 teachers rather than the vaguely defined "support staff".

We would be even more impressed if there was convincing evidence that underperforming teachers were being squeezed out.

When Kelly says that every school will be rebuilt or refurbished in the next 15 years, most of us are inclined to think that this is as things should be.

Much of the money being poured into public services is being wasted. We know that government spending has exploded and that some of the money has stuck: services have improved. But we are all left with the uneasy feeling that all of those tax rises that have financed the expenditure boom may well have been unnecessary. If only somebody had paid attention to the efficiency of the public sector.

In education, for every proud boast of the government we also learn that the number of functionally illiterate school leavers is terrifyingly high. One statistic the government doesn't quote too often is that half of 16-19 year olds lack the numeracy skills usually expected of an 11 year old.

The Confederation of British Industry (CBI) has been moaning about the British education system for years. In a recent survey, the CBI found that 37 per cent of firms are dissatisfied with the numeracy and literacy of school leavers.

Some sections of the media have latched on to a new social class called "Neats" (I think it stands for "no education and training"), a group that is mostly comprised, it seems, of feckless youngsters who draw benefits with no intention - or ability - to find any kind of work. Whether this underclass represents anything new remains to be seen; it is undoubtedly true that for all the money thrown at schools in recent years there has been scant return.

New Labour's obsession with schools has been matched by a determination to expand higher education. But the universities complain that they are under pressure to expand admissions of pupils with devalued A-levels while getting little by way of extra funding.

The inability to pay star academics internationally competitive salaries has contributed to a brain drain and declining standards in many places of higher learning. Top-up fees for universities is a step in the right direction but does not go nearly far enough to solve the funding problem.

Blair will be in real trouble in this election if the Tories can find a way to tap into the prevailing mood among the British middle classes that the higher taxes they are paying are benefiting somebody else.

Most people believe that, if education and healthcare have improved, it is somebody else's school or hospital that is getting better. This vague sense of being had represents a rich vein of political opportunity.

Many journalists are talking up the possibility that this could be a close election. Fear of being bored to death over the next few weeks is driving this, but there is a real possibility that the initiative could be wrested from Blair. While we may not like any of the alternatives, many of us would love to see him lose.

Chris Johns is an investment strategist with Collins Stewart. All opinions are personal.