England faces a "dismal picture" on basic skills, despite Pounds 5 billion being spent over six years on improving adults' reading, writing and maths.
The House of Commons public accounts committee said that even if the Government meets its ambition of 95 per cent functional literacy and numeracy among adults by 2020, England will only have caught up to the standard of the top 25 per cent of countries today.
Edward Leigh, the committee chairman, said: "This is a dismal picture, both for the many who face diminished prospects in what they can achieve in life and for the competitiveness of our country in the world economy."
The committee said ministers should order a repeat of the 2003 Skills for Life survey to see what effect the money spent between 2001 and 2007 has had, something they have now agreed to do next year.
The committee said the Department of Innovation, Universities and Skills acknowledged more work needed to be done on numeracy, following an earlier focus on reading and writing.
Graduates of maths-related courses should be targeted for recruitment to teaching in order to redress the balance of 6,300 numeracy teachers to 9,100 in literacy, the committee proposed.
Prison education represented "a major lost opportunity", the committee said, with just one in five offenders who have low basic skills enrolled on a course to improve them. It called for incentives for prisoners to improve their literacy or maths and for basic skills to be integrated into vocational skills training in prison.
Take up of Skills for Life courses within the free, employer-based Train to Gain scheme had also been lower than expected, with just 41,000 enrolments compared to an expected 73,470.
But Alan Tuckett, director of the Niace, the non-governmental adult education body, said the Skills for Life work already undertaken should not be underestimated.
"You can look at the Skills for Life agenda through either end of the telescope," he said. "On the one hand, the committee is surely right that the size of the job is enormous. To make a real difference to the lives of several million people isn't a cheap job.
"On the other hand, the Government is surely right to take pride in the number of people who have responded to the Skills for Life programme and the opportunity for people to get the first certificate of their lives."
One important area for development was basic information technology skills, along with literacy and numeracy, he said, because these were often crucial to help people into work.
The Government met its July 2010 target to improve the basic skills of 2.25 million adults two years early. In six years, 5.7 million adults took 12 million courses, with 7.6 million leading to approved qualifications - although only the first qualification for any student counted towards the target.
It is not known how much was spent on adult literacy and numeracy before the Skills for Life programme was launched in 2001, as the money was not ring-fenced.
Sion Simon, the further education minister, said: "No Government has done more to tackle improving the nation's literacy and numeracy skills, despite the scale of the challenge being so large and historic."
He said an extra Pounds 3.9 billion has been allocated to Skills for Life up to 2011.