Britain must make the creation of a skilled workforce more than just a "balloon on a slide", a key Government adviser warned yesterday.

Sir Andrew Foster, who led a high-profile review into reforming colleges, said it was time to stop talking about the skill gap and rectify it.

Speaking at Warwickshire College's Technology and Business Centre, he said he had seen for himself the threat posed by global competition.

"I have a post-university son working in China," said the respected civil servant.

"I have listened to him explaining how over there they are not talking about it - they are doing it and doing it and doing it in terms of developing their skills. That is a powerful point, yet we seem to have it as a balloon up there on slides.

"The question is, what do we have to do to change it from a balloon to a motor-power to improve the way we are doing things?"

Sir Andrew warned that failure to act risked seeing Britain lose its position as the fourth richest nation in the world to growing powers like China and India.

"At the moment we have an economy that is doing well and creating wealth and an affluent society," he said.

"If we don't do something serious about skills, will we still have that economy in 20 years time? In my view the answer is no."

Industry leaders and Ministers have raised concern over a shortfall of skills in the workforce. The country has one of the worst drop out rates at 16 in the developed world with more than a quarter of 15 to 19-year-olds out of education or training.

The UK also ranks 22nd out of 30 countries for the level of "basic" qualifications - equal to five GCSEs at grades A to C - among 25 to 34-year-olds.

Meanwhile, China is producing 300,000 graduates every year in science, technology, engineering and mathematics - three times the number coming through UK universities.

India has 450,000 engineering undergraduates in the current academic year alone, according to business lobby group, the CBI.

A raft of initiatives have been introduced to address the problem, including reforming the school curriculum for 14 to 19-year-olds along vocational lines.

Higher education reforms are also aimed at increasing the amount of people going to university to 50 per cent, though some claim the tripling of tuition fees will hinder this.

The Government now regards colleges as a crucial component in developing the skills of the workforce, particularly among those who may have not shone in schools.

Two years ago it commissioned Sir Andrew to examine how to make the further education sector work more effect ively and shed its

"Cinderella" status. Among his main findings was that it was being held back by bureaucracy, poor leadership a nd lack of "clarity of purpose".

"There has been an unduly heavily managed system with too much bureaucracy and heavy regulation," Sir Andrew told the conference of college leaders.

He believed colleges needed to make a focus on delivering skills their unique selling point. ..SUPL: