Schools could become the centrepiece of a drive to grow the North's economy by £100bn if they are given 'urgent attention', according to a new report.
Former chancellor, George Osborne, said the region is at a 'turning point' where it could start to close the economic divide with the South or be 'left behind'.
While transport is often highlighted as the key to growth in the North, the first report from Mr Osborne’s Northern Powerhouse Partnership think tank identifies raising educational standards as the priority.
The report, developed with input from more than 200 businesses and civic and academic leaders, aims to identify what needs to be done to build a Northern Powerhouse where people want to live, invest and set up businesses.
It recommends 'urgent attention' is given to improving the performance and aspiration of schools in the region.
According to the report, the area loses 30,000 graduates a year as students choose to move away after completing their studies.
Also in urgent need of improvement are the transport infrastructure, fibre and broadband provision and the level of ambition in local decision making, the report said.
Mr Osborne said the region is at a 'turning point'.
He said: "We can either make use of the momentum behind the Northern Powerhouse to really close the North-South gap, or we can let the moment pass and leave our country divided and the North left behind.
"Get it right and the northern economy will be £100 billion bigger, with more jobs and higher living standards for all.
"Many issues have been raised with us, from transport connections to devolution. But one challenge stood out: education.
"Our education system, right the way from the start of school to higher education, must provide the next generation with the skills, inspiration and training to fulfil their goals and build our economy.
"There is now overwhelming evidence that attainment at 16 is too low in the North, leaving us lagging behind the UK and international competitors.
"We also let go of far too many talented graduates.
"I will be asking a group of leading employers and education leaders to work together with the partnership to draw on the latest evidence and thinking to examine a number of key issues to put this right."
A Government spokesman said: "There are 420,000 more children in the North at good or outstanding schools than there were in 2010 and statistics show the attainment gap between disadvantaged pupils and their counterparts is shrinking.
"But we know there is more to do and that's why we launched the Northern Powerhouse Schools Strategy review and committed £70 million to support educational improvement in the North.
"We have also named Scarborough, Oldham, Blackpool, Bradford and Doncaster as Opportunity Areas to benefit from additional funding and resources to promote social mobility."
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