Thousands of youngsters are still leaving West Midland primary schools without basic literacy and numeracy skills, Government figures have revealed.
Test results for pupils aged 11 showed a quarter of Birmingham children failed to reach basic standards in English, while more than a quarter failed in mathematics.
The results were exactly the same as last year.
Business leaders last night warned low skills were holding back the region's economy.
Jerry Blackett, Birmingham Chamber of Commerce's policy director, said: "It is probably the biggest single concern of our members."
Nationally, results improved slightly - but the Government looked certain to fall short of its targets for raising primary school standards, due to be met next year.
The Minister in charge, Worcestershire MP Jacqui Smith (Lab Redditch), told The Birmingham Post she would be judged by voters on whether results improved.
The Government has set itself a target of ensuring 85 per cent of pupils achieve the required standard, known as level four, in both literacy and numeracy tests by 2006.
But the national pass rate this year was 79 per cent in literacy and 75 per cent in numeracy - both up by one per cent on last year.
In Solihull, 84 per cent of 11- year- olds reached the required level in literacy and 80 per cent did so in numeracy.
In Birmingham, the pass rate was 74 per cent in literacy and 70 per cent in numeracy.
Authorities including Telford & Wrekin, Stoke-on-Trent, Coventry, Dudley, Sandwell, Walsall and Wolverhampton also achieved results below the national average.
Mr Blackett said: "The overwhelming message from business is that we need workers with basic skills in literacy and numeracy. We can teach the rest. But employers are shocked by the large percentage of workers who come to them lacking these basics.
"They are extremely angry that they are having to pick up the tab."
But Ms Smith pointed out that results nationally, and in most education authorities, were the highest they had ever been.
The Government was working with primary schools to help them improve, for example by training headteachers and reviewing the curriculum.
She said: "All those things will be taking place across the West Midlands.
"We will be putting into place the results of the review of the literacy and numeracy frameworks, to make sure all primary teachers across the West Midlands have got the tools at their disposal to make the most of our children.
"But I think they do deserve congratulations today for being part of achieving the highest ever maths and results for our 11 year olds.
"Pupils and teachers and parents across the West Midlands deserve congratulations."
She refused to be drawn in to questions about her future if the Government's targets were not met.
"My responsibility is to ensure I am doing the absolute best for our children, in terms of the support we as a Government are putting in place, in terms of making sure the investment is getting in to our schools to make that improvement. That is what I will be judged on by the electors of Redditch, and by those people who will be electing the next Government.
"I am happy to be judged on the difference we are making to people's lives."
National assessments for seven-year-olds in England showed modest improvements.
Results were up by one per cent in reading, writing and maths in the new, toned-down assessments.
For the first time this year, schools were only required to provide figures relating to teacher assessments, rather than the full-scale testing of seven-year-olds of the past.
The figures showed 85 per cent of pupils achieved the level expected of seven-yearolds in reading, 82 per cent in writing and 91 per cent in maths.