The education system is failing to arm school leavers with the rudimentary arithmetic, reading and writing skills they need to succeed at work, the CBI has warned.

It says that employers end up picking up the tab, having to invest in basic training to get many school-leavers up to scratch in English and Maths.

As young people around the country make plans for their future after collecting their results, the CBI said that barely half of GCSE students achieved a Grade C or above in Maths (54%) and just six out of ten (60%) reached the same standard in English.

According to results from the CBI/Pertemps Employment Trends Survey 2005, to be released this autumn, almost half of employers (42%) feel unhappy with the basic skill levels of school-leavers and 50% believe teenagers do not have sufficient communication, team-working and problem-solving abilities.

Sir Digby Jones, Director-General of the CBI, said: "The UK is the fourth richest economy on Earth. Surely it cannot be beyond us to ensure all our young people have the basic skills they need to get on at work? Yet sadly too many, particularly boys, are being left behind. How can school-leavers hope to succeed in the modern world if they cannot read or write?"

Sir Digby added that the CBI had welcomed the Government's pledge of a 'relentless drive' to raise standards and eradicate illiteracy and innumeracy and the promises of February's education white paper.

However he added: "We need to see action as well as words - at the moment the UK economy is losing up to £10 billion a year because of poor basic skills, whilst our school-leavers are held back from fulfilling their potential."

CBI survey figures from 2004 show that four out of five businesses (83%) felt the number one priority for the education system should be to improve basic literacy and numeracy levels.