A report by the Chartered Institute for Personnel and Development (CIPD) (www.cipd.co.uk) shows that the UK is facing a severe skills shortage, as “poor education at schools, followed by weak training for adults” has left young workers unable to meet basic standards for reading and maths.

Almost every other developed country has had more success in building a skilled workforce, leaving the UK economy at risk of falling behind, the report claims.

It found that England and Northern Ireland rank in the bottom four OECD countries for literacy and numeracy among 16- to 24-year-olds, while employers invest less in skills than most other EU countries.

The CIPD proposes increasing skills funding by £3 billion, with £1 billion of that coming from the National Productivity Investment Fund announced in the Autumn Statement, and the other £2 billion from the Apprenticeship Levy — a new measure that came in at the start of this month.

“Another important step would be to promote life-time learning”, the CIPD said, “to ensure that workers are not left with only the skills they learn in school, as the economy changes around them.”

The CIPD’s skills adviser, Lizzie Crowley, said: “This is a sobering analysis of the state of skills in the UK. Our report should serve as a real wake-up call for the Government to break with the past two decades of failed skills policy and set the UK on a new course that delivers the right results for individuals, organisations and the economy as a whole.

“While more efforts are being made to reform education, it’s clear that there needs to be a much greater emphasis on learning and development in the work-place.

“As we move towards Brexit, it’s crucial that the Government works in partnership with education providers and businesses to address these deep-rooted issues that continue to blight individual and business potential.”