Too many students leave school in Wales thinking education is not for them.

Nearly half of our 16-year-olds are not achieving at least five GCSEs at grades A*-C.

Participation in post-compulsory education is low, with one in 10 of all 19-year-olds classified as not in education, employment or training. And relatively few young people in Wales are in employment-based training.

Extending personalised learning pathways and choice at 14-19 are critical to addressing these problems. The Assembly government’s reforms of the 14-19 curriculum aim to equip young people with skills needed in the modern workplace by providing more vocational and work-based courses, and traditional qualifications that will boost achievement and increase the number of qualified school-leavers.

If you venture into Wales’s deprived communities it becomes clear why the Assembly government is so committed to reforming 14-19. Thirty per cent of the Welsh population live in the “objective one” area of the south Wales valleys - an area eligible for funding from the EU to stimulate economic development.

It is here that you find the lowest post-16 educational participation in Wales. This pattern of untapped resource has ensured that many vibrant valleys communities, that are rich in so many ways, remain economically poor.

Such a waste of talent and potential cannot continue. This is why I support the Assembly government’s target that 95 per cent of young people should be ready for high-skilled employment or higher education by 2015.

There is a great deal that needs to be done to achieve this figure. Wales is more advanced than anywhere else in the UK. The 14-19 action plan, the Welsh baccalaureate (foundation, intermediate and advanced), the newly-appointed vocational skills champion, the Heads of the Valleys initiative, and local skills and employment action plans form the backbone of the Assembly government’s strategic policy response.

However, as I write, the First Minister Rhodri Morgan has yet to seal the deal on our nation’s budget for 2006-7. It is one of the added complications of a minority administration that the agreement of other political parties is required.

The draft education budget, if unamended by the opposition parties, will deliver a good deal for our education sector with continued financial growth in virtually all areas.

Early years and pupil support are the winners of this budget round, with another pound;50 million being invested by 20078.

Furthermore, pound;80.2m will ensure no Welsh-domiciled student faces variable university fees during the Assembly’s lifetime.

But what about the deprived communities? The draft budget allocates an additional pound;2m to 14-19 learning pathways provision. ELWa, the post-16 education funding agency, will gain pound;6m for its 14-19 agenda.

Additional sums will follow in 20078.

This financial package should allow the continued development of the critical 14-19 networks throughout Wales. Collaboration has not been easy or cheap. There have been difficulties for local communities, but work must continue towards the 2008 goals of auditing existing provision, delivering an annual prospectus of activity for 14 to 19-year-olds and work with employers to develop work-focused experience.

Employers must fully recognise that today’s student is tomorrow’s employee.

It has been disappointing to hear of the recent difficulties faced by young people who begin Modern Apprenticeships in Wales in getting the support needed from employers to complete their training. Investing in training must be seen as an investment in the future prosperity of all companies, no matter what their size.

A recent study by Ewart Keep of the University of Warwick shows that wider key skills are seen as fundamental to future employers, but in England “certification in these areas has been negligible”. In Wales, the introduction of the foundation-level baccaulaureate will deliver these key skills from the age of 14.

So what more can be done? It is here that the new sector skills council plays a critical role. Its raison d’etre is to map skills gaps and suggest solutions. The Assembly government and the vocational skills champion must use this resource and ensure the skills councils are fully engaged with local networks in encouraging employers to provide work-based learning support.

Christine Chapman, the deputy education minister, this week published a report on funding the aims of the Assembly government’s 14-19 reforms. I hope the detailed plans unveiled will answer the key issues of adequate funding and boosting the participation of businesses in work-based learning.

These two aspects are critical to the success of our modern education system and to the future success of Wales’s economy.

Jeff Cuthbert is the Labour member for Caerphilly and sits on the Welsh Assembly’s education committee