Transport and education are the key election issues for business, and company bosses are dissatisfied with the Government's record on both, the Confederation of British Industry said today.

CBI director general Sir Digby Jones said that measures to improve Britain's road, rail and school systems should feature prominently in the party manifestos.

Whichever party wins the May 5 General Election, the Government will not have the money to implement its plans unless business is thriving, he warned.

In a survey released by the employers' organisation, 89 per cent of company bosses said they were unhappy with the Government's record on transport and 74 per cent on education.

The survey also revealed business scepticism about Government promises to cut Whitehall bureaucracy.

Just four per cent of the 404 firms which responded said they were confident that the £21.5 billion savings identified in the Treasury's Gershon Report would be implemented, against 49 per cent who were "not very confident" and 37 per cent "not at all confident".

Sir Digby called for a £300 billion spending programme to transform Britain's transport links over the next ten years.

And he urged the incoming Government to concentrate on raising standards of English and Maths teaching in schools as well as improving the flawed basic skills of 15 million adults.

"Every party needs the wealth business creates to fund the plans we're about to see them spell out," he said.

"As the next Parliament progresses, competitive pressures - especially from India and China - will increasingly put that at risk."

In the CBI Public Services Survey, transport was named as the number one service affecting competitiveness, with 42 per cent of those taking part seeing it as the most important area for Government action. But 53 per cent of firms said they were dissatisfied, and 36 per cent very dissatisfied with the Government's record.

"A better transport system is crucial for business," said Sir Digby. "Our failing transport system adds to costs and puts the UK at a disadvantage when international businesses decide where to place their investment and jobs."

He called on all the parties to set out their vision for what the British transport network will look like in 20 or 30 years' time, along with an implementation plan for how it can be achieved.

Thirty-six per cent of firms said education was the most important public service for the Government to focus on. But 23 per cent were dissatisfied and 51 per cent very dissatisfied with Labour's handling of the issue, which Prime Minister Tony Blair has always put at the top of his agenda.

The recent CBI Employment Trends Survey found that half of employers are unhappy with literacy and numeracy levels among school-leavers. Research for the organisation has revealed that a third of companies are forced to offer remedial training to compensate for shortcomings in the state education system.

"The UK will not be able to compete in the modern global economy unless we have welleducated and motivated employees," said Sir Digby. "The next government must build on the current Government's initiative to increase literacy in secondary education, and improve vocational training.

" It needs to focus on improving the basic skills of school leavers and achieve dramatic progress in both literacy and numeracy."