Initiatives such as the University for Industry and Individual Learning Accounts, and the establishment of the Learning and Skills Council, represent a fundamental shift in strategy. For the first time, the delivery of learning and skills has a strong political and financial commitment from Whitehall. However, there is a policy problem looming on the horizon which could jeopardise the progress that has been made.

The problem is what I describe as the adult skills ticking time bomb - and it is a problem that could seriously constrain the UK’s productivity and growth rates. The National Skills Task Force identified that, during the next 10 years, two million extra jobs will be created in the UK - 90 per cent of which are likely to require level 2 qualifications (defined as 5 GCSEs at grades A-C and level 2 NVQ attainment). At the same time, demographics indicate that there will be 2m fewer young people in the UK in 2010 than there were in 1985. Therefore, these jobs will have to be filled from the adult workforce, of whom a third - around 9m people - currently lack level 2 qualifications.

Given that one in five adults also have literacy and numeracy problems, a huge effort is needed to turn the situation around. There are three principal challenges which must be overcome if this adult skills gap is to be plugged. These are: motivating adults to learn, encouraging a culture of learning in the workplace, and providing credible vocational qualifications.

The first challenge is providing learning and skills training tailored to the individual. Nowadays, learners expect to be treated as consumers and are demanding courses which both meet their skills needs and fit in with their lifestyle.

So, much greater emphasis must be placed on providing courses with small units of learning that enable individuals to build towards a qualification at their own pace.

This is of particular importance to those adults who have not studied for a formal qualification since they left school and are lacking the confidence and motivation to take up studying. It is also essential for many working adults, often with families and other commitments, for whom formal learning can, at best, be an occasional activit.

Evidence shows that recognition of achievement at unit level - which is often the first time someone has gained an education certificate - provides adults with the morale boost they often need to continue learning.

Creating a workplace learning culture is the second challenge. It is widely believed that UK businesses fail to offer workers the necessary skills because they don’t want to fund training. In reality, while this is a factor in some cases, the most common reason firms, particularly small to medium-sized enterprises (SMEs), fail to invest in workplace skills and training is that their managers and human resources staff lack the expertise and time needed to introduce new management practices.

The Government must place high priority on channelling assistance through the LSCs and Small Business Service to those smaller firms that want to set up training schemes. Help could include training for managers, tax credits, peripatetic advisers or mentors, and local collaborative learning networks which should benefit small businesses.

The third challenge is in establishing a clear and credible qualifications framework. There is a confusing array of qualifications on offer and it is unsurprising that the take-up of many vocational courses has been so disappointing. The number of vocational qualifications must be reduced sooner rather than later.

Also, more has to be done to improve the quality to ensure that they are valued by employees and employers alike. Standards must be driven up because there is no bigger turn-off for adult learners than the perception that their qualifications carry no weight in the labour market.

Radical action is needed to plug the adult skills gap. I therefore propose two ideas which, I believe, will have a significant impact on the quality and status of adult learning.

* Entitle all adults who do not hold a level 2 qualification the chance to get one for free through the publicly-funded education system.

* Establish a more flexible funding system for adult learners, including income-contingent loans.

I am confident that if the Government brings in these proposals, then the LSC and their myriad partners across England can deliver the upskilling of adults that is essential for the UK to become a high-skill, high-wage economy competing with the best in the world.

Chris Humphries is director-general of City amp; Guilds