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The investment made in education by the previous Labour government has not delivered the returns needed to boost the economy, it has been suggested.
A report by the Confederation of British Industry (CBI) said many young people are leaving school without the skills they require in the workplace.
"Too many school leavers leave education without the skills, knowledge and attitude to work [that] employers are looking for… And too many of these young people are being let down by persistent underperformance of the education system through attending failing or coasting schools," said CBI director of public services and education Susan Anderson.
She noted that the link between poverty and poor educational achievement is still "too clear".
The study concluded that although GCSE pass rates are rising, not enough students are getting qualifications in important subjects such as English and Maths.
Commenting on the report, Dr Mary Bousted, General Secretary of the Association of Teachers and Lecturers, said: "We commend the CBI for the aspects of its report which go beyond the usual industry hand-wringing that everything is rotten in state education. It says sensible things about skills and the link between education and employment. And it is heartening to read the CBI's critique of the current national curriculum and a desire for schools to focus on the application of knowledge rather than its acquisition.
"Their report is weakest on the ways in which education can be improved. It fails to sufficiently acknowledge how much education standards have risen across the board. This is because a success story does not provide a good basis for the type of education revolution that the CBI wants - an even more rapid expansion of academies and free schools run by profit-making sponsors.
"The grubby reality is that every pound put in shareholders' pockets is a pound denied to pupils' education. This is why state schools should not be run for profit."