Graduates will be offered grants of up to £20,000 to teach at FE colleges, Business Secretary Vince has announced.

The government is hoping the incentive will help improve numeracy and literacy among vocational learners, especially in areas like engineering where, said a government spokesperson, the UK had a “massive skills shortage”.

Maths graduates will be offered up to £20,000, while a maximum of £9,000 will be on the table for English graduates.

Dr Cable said: “Too many businesses tell me they cannot find young people with the numeracy and literacy skills they need.

“It’s not just those planning on going to university who need to have a firm grasp of English and maths. These basic competencies are needed for all types of employment and it is not possible to enter a full apprenticeship until then.”

The announcement follows the government’s most recent Skills for Life Survey, which showed that 24 per cent of the population (8.1 million people) lacked basic numeracy, and 15 per cent (5.1 million people) lacked basic literacy.

The grants, including up to £9,000 for those wanting to specialise in teaching SEN students, will go toward initial teacher training for 2013/14 graduates.

Skills Minister Matthew Hancock said: “It does not matter whether you are studying vital skills like carpentry or studying at university to be a research scientist, there is not a job in this country that does not need maths and English.

“These bursaries will help us recruit the brightest and best teachers so we can improve standards and provide people with the basic skills they need for a rewarding career.

“They will also make sure that we promote excellence in special needs teaching so that we protect members of our society that are potentially the most vulnerable.”

The bursaries will be available for two years and, in addition, £1m in grants will fund high-level specialist training for those already working with students with SEN, through continuous professional development.

Lynne Sedgmore, 157 Group executive director, said: “This announcement is good news indeed, not only because it brings focus once again onto English and maths, which all FE Colleges know are vital to their learners’ success, but also because it sends a clear message to potential teachers that teaching in FE is as valuable as teaching in schools.

“As those of us in the sector know, our learners are perhaps the most enriching and stimulating, and so we are pleased that a great many more good teachers will have the chance to find that out for themselves.”

Joy Mercer, Association of Colleges policy director, said: “New bursaries will help colleges attract graduates so that they can support students who leave school without GCSE maths and English at grades A to C.

“New grants totalling £1m to support professional development for those already working with students with special educational needs is equally welcome.

“Speed and longevity are of the essence — it is useful that government has committed to initial teacher training grants for 2013/14 graduates so that colleges can start recruiting straight away, but funding has only been confirmed for the next two years and a short-term funding commitment risks limiting the benefits.

“Colleges also face considerable challenges in attracting people with excellent applied maths skills and relevant vocational expertise who may not be graduates or be looking to undertake initial teacher training — we would welcome further discussions with government, its agencies and partners as to how the sector can be helped to attract these types of people from industry into the college classroom.”

Further details on the grants, covering the application and payment process along with eligibility criteria, are expected in the autumn.