Every year 150,000 young people start work without the basic qualifications needed for the job.

For more than seven years, efforts to cut the numbers failing to gain level 2 (GCSE-equivalent) qualifications have stalled.

Now the education system is making a renewed effort to help this group - by following them into their workplaces.

In April, employer training pilots will be extended across the country.

Called Train to Gain, the scheme will fund level 2 courses for adults at work and compensate employers for the time.

New research from the Learning and Skills Development Agency, which examines the obstacles and incentives of learning in the workplace, suggests it is targeting some of the right areas.

Research shows that low-skilled employees who are most in need of training are the least likely to get it. Small and medium-sized businesses are also less likely to find time for formal training.

Train to Gain tackles both these areas. It focuses on level 2 qualifications for adults, and 70 per cent of firms involved in the pilots have fewer than 50 employees.

David Way, director of skills at the Learning and Skills Council, said:

“The success of the employer training pilots has demonstrated that these barriers can be overcome. The pilots make it as simple as possible for employers to provide training for their staff, for example by working around shift patterns and offering bite-sized sessions.”

But the survey also notes that employers consider their main purpose to be providing goods and services, not training workers.

Richard Wainer, policy adviser at the Confederation of British Industry, denied that even small firms were reluctant to train staff.

Employers spend about pound;4.5 billion a year on training staff, although the National Employer Skills Survey says only 34 per cent of firms have a training budget.

But Mr Wainer said: “The Government’s responsibility is for education and training of young people and getting them to the level 2 standard.”

Nevertheless, companies support Train to Gain, he said, particularly because firms can choose their training providers and have courses tailored to their needs.

Peter Milner, who owns and runs the Eric B Milner jeweller’s business in Birmingham with his son, Chris, had never considered formal training until he heard a Train to Gain radio commercial.

With the help of Josiah Mason college, Mr Milner was able to plan a bespoke course that would enable Chris to do work that the firm used to outsource, such as setting stones in rings.

He said: “If we had had to pay for the course, I would have paid. But it had to be something I knew would benefit us both.” Too many college jewellery courses were divorced from business realities, he said.

The CBI would like to see more of colleges’ pound;5 billion budget for workplace training made available to private providers.

A CBI survey claiming that most employers were unhappy with colleges’

work-based training was rebutted last month by the Association of Colleges.

The AoC said a larger independent survey had shown that 95 per cent of employers who actually used college training were happy, and that a previous CBI survey showing 85 per cent were satisfied was not publicised.

But employers also point out that a lot of learning in the workplace goes unrecognised, because it is informal. Mr Wainer said: “Qualifications aren’t necessarily what employers are looking for. It’s competence.”

The LSDA report Learning at work is available on the web at www.lsda.org.ukpubs