Since the publication of the Moser Report in 1999, improving the basic skills of adults has been a major priority for all of the UK's governments. There has been a particular interest in building up workplace provision, because of the assumed relationship between the basic skills of the employed population and productivity. A longitudinal study tracked 53 workplaces which hosted subsidised basic skills courses, and examined the impact on the enterprises themselves as well as on learners. It established that employers were not, contrary to policy-makers' expectations, concerned about employees' literacy levels, and supported provision largely as a way of providing general development opportunities. Learners, who made small literacy gains at best, did not change their behaviour in ways which were likely to affect productivity. Once subsidies ended, employers were unwilling to support further provision at full cost. This provides further evidence that basic skills tuition does not have an immediate impact on performance. Overall the subsidised programmes used an extremely costly approach, and left no lasting legacy. The findings have major implications for the organisation of effective educational provision for less-skilled employees and suggest that the current approach to subsidising workplace training is seriously defective. (Contains 3 figures and 12 notes.)