As if businesses didn't have enough to worry about with the pre-Budget pension and maternity pay recommendations, a new report from the National Audit Office (NAO) says firms should also teach their staff pre-GCSE literacy and numeracy.

According to the report, presented to Parliament last week, 20% of businesses have skills shortages which cost around £10 billion each year in lost revenue. The NAO has worked this out to average around £165,000 a year in a business with 50 employees.

To help firms reduce these losses, the Learning and Skills Council is planning to roll out a National Employer Training Programme from April 2006, which will link businesses with potential training providers.

However, with few firms currently willing to fund training in subjects that staff should have learned at school, it remains to be seen whether these recommendations will be taken on board by the Government and, ultimately, forced on small business owners.