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: Artist impression of the sprawling new campus of the University of Dubai at the Academic City. Photo credit: Supplied Picture

London: The knowledge and skills of British adults is ranked 30th out of 142 countries - despite our economy being the 28th best.

Schools in Lithuania were rated two places higher than here, even though it languishes in the bottom third of economies in 94th place. Hungarian schools come eight places higher than the UK. Its economy is ranked in 83rd position.

New Zealand came top in education, followed by Australia, Canada, Norway and the US. Last month, a report from the Organisation for Economic Co-operation and Development (OECD) found England was the only wealthy country where school-leavers are worse at maths and reading than their grandparents.

The latest study, compiled by the Legatum Institute, a London-based think-tank, used internationally recognised sources of information including data from Unesco that cover 96 per cent of the world’s population and 99 per cent of global gross domestic product.

It placed Britain as the 16th best place to live overall in its annual prosperity index using nine categories that also include health, safety and security and personal freedom.

This was a drop of three places from last year.

The standard of education was based on factors including pupils-to-teacher ratio, the level of secondary education reached by workers and enrolment in universities and other higher education.

Programme director Nathan Gamester said: “In the UK’s instance, one of the biggest drivers in decline was the level of secondary education per worker. Secondary education completion rates have fallen, while those in Germany - which has gone up eight places - have risen.

“Policies are needed that keep pupils in schools longer and reverse the drop-out rate to make sure they have the skills and experience to compete with other countries.’

Norway came first for overall prosperity. It was also top for its economy and for education was placed fourth. Other countries that outperformed the UK included Iceland, which was placed 13th overall. Its economy was 41st. The report said the UK’s prosperity had ‘continued its descent’ since falling from 18th to 21st in 2010. It has since been ‘leap-frogged by a number of middle and high-income countries from Asia and the Middle East’.

This was blamed on unemployment levels of around 7 per cent, poor high-tech product exports and weak foreign investment.

Fewer Britons are satisfied with their quality of life compared with five years ago, the report added.

The OECD report revealed England was 22nd out of 24 countries in literacy and 21st for maths.

Japanese school-leavers were more advanced than English university graduates, the report found. It exposed deep failings in Labour’s education policies during its 13 years in power. The authors warned improvements were essential to compete in the global economy.

Education reforms under the Coalition include teenagers having to stay in school, college or work-based training until they are 17, rising to 18 from 2015.

A Department for Education spokesman said: “Our reforms ensure that all pupils will now study English and maths to 18 if they don’t achieve a C at GCSE, and we have raised the age of compulsory participation in education or training until the end of the academic year young people turn 17.

“From 2015, this will be raised to their 18th birthday.”

The changes would ‘enable all pupils to access rigorous qualifications that will be respected by higher education and employers’.

“We have turned more failing schools into academies with the support of a strong sponsor than ever before and we are setting up new free schools to give all local parents the choice of a high-quality school with great teaching and strong discipline.”