Ahead of Thursday's GCSE results, excerpts from a new survey of over 500 firms will reveal that 37 per cent of firms are not satisfied with the basic literacy and numeracy of school leavers. This compares with 34 per cent in the 2003 survey and illustrates growing business concern about the ability of the education system to effectively deliver basic skills.

The annual CBI-Pertemps employment trends survey - due for full release next month - will also show that the vast majority of employers - 83 per cent - believe the government should focus on ensuring all young people leave school literate and numerate.

But employers fear that government proposals to reform radically the education system will distract attention from the key task of improving young people's skills.

Government figures show that 50 per cent of 16-19 year-olds lack the applied numeracy skills expected of an 11 year-old.

The latest figures suggest that employers spend over £23bn each year on training and CBI research shows this amount is rising year on year. But the employers' organisation is concerned that a significant proportion of this is being spent ironing out basic problems that should have been resolved by state education.

The CBI survey will show that 33 per cent of firms needed to give school leavers basic training in literacy and numeracy over the past twelve months.

Digby Jones, CBI Director-General, said: "Too many school leavers are failing to make the business grade. A fundamental working knowledge of English and Maths provides a vital foundation for every day-to-day business task. But the education system is letting down many young people and leaving them unprepared for the world of work."

"Employers are left to pick up the pieces and the bill, with many resorting to basic training to compensate for the short-comings of an education system that they have already paid for through increased business taxation."