A study by the organisation responsible for promoting local and national initiatives among schools, colleges, local education authorities and business shows that eight out of 10 schools and colleges have links with 200,000 companies in Britain. But the average spent on each pupil per year is just #163;3.50.
And a national survey of the leading 40 companies involved in Education Business Partnership work shows that schools and colleges are failing to equip pupils with the skills they will need for work in the 21st century. But they acknowledge that the range of skills demanded is changing rapidly and needs more investment. Many firms complain that school and college-leavers lack vital personal skills and a basic understanding of business, and have poor numeracy and literacy skills.
Glaxo Wellcome, a leading pharmaceutical group, believes the situation is so serious it is calling on the Government to introduce the teaching of personal skills (including communication and research) and core skills (such as the ability to use technology) in all primary and secondary schools.
Kay Roberts, Glaxo's educational development manager, says: "Some schools have introduced initiatives which integrate personal skills and core skills into the curriculum, and there is a discussion at government level regarding the introduction of personal skills at post-16, while core skills are being piloted among 14 to 16-year-olds.
"However, as these skills will be useful to all pupils - to equip them for school, work and citizenship - we believe the Government needs to introduce them much earlier - at the beginning of pupils' secondary education in Year 7 or, ideally, in primary schools."
Glaxo Wellcome is not alone in demanding these skills from its workforce. Geoff Loades, group personnel director at Norwich Union, the insurance company, agrees. "Schools need to focus more on skills such as communication, self-development and teamworking in preparation for work. And the group that would benefit most from this approach might be the non-academic pupils with personality, who might otherwise get left out."
He believes that schools cannot be held totally responsible for this development, and that business must play a part. "We recognise the responsibility of employers to contribute to this and work with education, so that curriculum material is relevant to current and future business needs.
"There needs to be more opportunity for teachers to learn about the workplace and the changing workplace environment, and greater links between business and education."
There is a lack of business awareness. Andrew Day, Ford's occupational psychologist, says: "Schools don't concentrate enough on business issues. There seems to be a big void between the type of people who are coming out of school and the type of employees we want to develop, particularly in terms of understanding business."
He is also concerned with the low levels of literacy and numeracy of the employees working on the assembly line. "We need people who can read basic signs and count numbers, and it amazes me that people often struggle at that level."
At Virgin Our Price, Gill Horner, who works in career planning and recruitment, has encountered similar problems. "Schools are not doing enough to ensure their pupils will meet the needs of business in five years' time," she says. "The majority of applications from school and college-leavers contain spelling and grammatical errors. Many candidates are unaware of how to structure a concise, informative CV and are unable to sell themselves because of this.
"The first stage of our selection process consists of a numeracy test. The test is not difficult; it tests for basic competency in simple arithmetic. But at least half the candidates fail."
Many schools have begun working in partnership with companies, but businesses still feel that there is a long way to go. Danielle Michaels, of the recruitment division at Marks and Spencer, says: "Schools and colleges are improving but they started from a very low base. The curriculum has consistently been an academic one, but over the past five years that has shifted as schools have begun to work with businesses.
"It is important that students understand how to apply their skills in the workplace, and to ensure this business has a responsibility to work with schools. It is also critical that pupils have a work placement to ensure they understand the relevance of what they are learning."
Companies suggest that schools and businesses should discuss their aims for individual work placements before the pupils arrive to be able to measure the effectiveness of work experience afterwards.
According to Andrew Tanner, head of public relations at Sainsbury's, the supermarket chain: "Many [schools] don't have enough resources or teachers and are out of touch with what is going on. It is important for government to identify the skills businesses will be looking for and plough more resources into helping pupils achieve them. Better links between schools and colleges and businesses and the careers service would also improve the situation and create a more holistic approach."
s Response rate to survey: 70 per cent
TES survey page II
why we should spend more, page VI