The Education Secretary was speaking at a conference to discuss the new sector skills body for post-16 education workers (see above).

He said: “Employers complain education is not working the way they want. A major priority is the building of a new relationship with employers.” He cited foundation degrees as an excellent case of co-operation but said much more needed to be done to develop “better dialogue” between education and employers. “Change in this area is actually important to our future economic success.”

The bodies are meant to let employers shape training . But firms are not getting involved. Only 7 per cent of employers are even aware of the existence of the predecessors to sector skills councils, national training organisations, the Department for Education and Skills says.

Mr Clarke repeated the mantra about the UK’s skills deficit. The UK has the lowest participation in education of all the Organisation for Economic Cooperation and Development countries, with the exception of Turkey and Mexico.

In an admission that meeting employers’ needs will help cut wage costs, he cited the shortage of London tradespeople which has driven up the cost of plumbing and other work. He said: “People can charge ridiculous rates for these skills. We need a coherent London strategy. Money is part of the answer but will only make a difference if there is a coherent strategy.”

The Sector Skills Development Agency echoed the call for more input from business. Christopher Duff, its chief told the conference: “We expect other sector skills councils to feed us with better intelligence about what employers need.”

But while Mr Clarke’s speech contained much “could do better” rhetoric, his appreciation of the work done to date earned him a warm reception. He told delegates: “Change is hard. I want to thank you very much indeed for making that commitment.