A major overhaul of Britain’s “dysfunctional” skills system intended to boost every worker’s productivity by an average of £1,800 a year will be unveiled by Gordon Brown this week, as the chancellor seeks to answer criticism from business that current training does not meet employers’ needs.

Publishing the recommendations of the Leitch Review into skills training, Mr Brown will accept the demands of the CBI employers’ body that the UK system needs to shift from being supply to demand-led, scrapping the current system under which further education colleges dictate what the UK’s needs should be.