Companies are having to give staff lessons in basic reading and writing due to the failings of the education system, according to a report by the Confederation of British Industry.

The report argues that today’s school-leavers are unable to add up sums in their heads, speak in a concise and articulate manner or follow basic written instructions. It claims this group is obsessed with mobile phones, iPods and the internet and dubs them ‘Generation Text’.

As a result, 15% of companies now offer remedial maths lessons and 13% provide literacy classes. The survey also revealed that 86% of employers believe the government must do more to encourage basic maths and English skills in youngsters.

The challenge ahead is for schools to channel that same enthusiasm into numeracy and literacy skills, where far too many young people are struggling

“Young people are clearly doing some things very well,” said CBI director general Richard Lambert. “These technology-smart whizz kids are making a great impression at businesses with their expertise in IT and computing.

“Their fluency with iPods, mobiles and MySpace has translated well into the workplace, and often gives them an edge over their bosses.

“The challenge ahead is for schools to channel that same enthusiasm into numeracy and literacy skills, where far too many young people are struggling,” added Lambert. “Maths and English skills are a vital bedrock for further learning, and are essential both in the workplace and in life.”

The CBI’s survey of 500 companies with over 1.1m employees found that 90% of companies were satisfied with the IT levels of school-leavers but over half questioned the shift in emphasis towards technology at the expense of reading, writing and arithmetic.

“We simply cannot match the labour costs of India, China, and other emerging economies, and only a higher-skilled workforce will keep the UK competitive,” warned Lambert. “The under-qualified will be left to choose from an ever-dwindling pool of unskilled jobs.”

“Basic literacy and numeracy problems are a nightmare for business and for individuals, so we have to get these essentials right,” he added. “Progress has been made but it is nowhere near enough, especially considering the massive investment made in education.”