A DECLINE in language learning at Scottish schools and universities is costing the economy at least half a billion pounds every year.

The figure is contained in a new study that assesses for the first time the financial impact of more than a decade of decline in language learning in schools.

Dubbed the "language tax", the figure is an attempt to estimate how much business is lost to Scotland because companies miss out on overseas contracts or inward investment.

The report, by the Scottish Government's Languages Working Group, makes 35 recommendations on how to improve the situation.

Foremost of these is that children should begin learning a second language as soon as they start primary school, rather than primary six, as is now the case.

The group also says children should learn a third language no later than P5 and calls for a compulsory language qualification for primary teachers.

The proposals are to be piloted in 12 schools across Scotland with the help of Scotland's National Centre for Languages (SCILT), based at Strathclyde University.

SCILT is to be given increased funding of more than £600,000 in 2012/13, with £120,000 used for the language pilots.

Alasdair Allan, the Minister for Learning, welcomed the report, which takes a further step towards the Government's earlier pledge to observe the European Council's 2002 Barcelona Agreement.

The agreement encourages the learning of two languages, in addition to the mother tongue, from a very early age.

He said: "The world is changing rapidly and radically and the Government has a duty to ensure schools prepare young people so they can flourish and succeed in the globalised, multi-lingual world we now live in.

"One indisputable aspect of modern life is more people travel widely for jobs and leisure and we must respond accordingly.

"We will not be as successful as a country and economy if we remain essentially a monolingual society."

The findings were welcomed by business leaders and language experts, although there was concern over whether the improvements could be realised.

Lauren Paterson, a CBI Scotland policy executive, said: "We welcome what the Government is trying to achieve as we feel that in order to compete on the international stage in the future it is vital to have language skills."

Dr Dan Tierney, a reader in language learning at Strathclyde University, said: "The targets are welcome, but extremely ambitious and will be very difficult to achieve. To achieve coherence from P1 through to secondary will require better planning in terms of teaching and learning and teacher supply."

Lloyd Anderson, director of British Council Scotland, added: "Scotland needs globalised citizens who can go out confidently on the world stage and win business to grow Scotland's exports. Language learning is a vital part of creating that outward-looking mindset."

Schools have seen falling numbers of pupils going on to study languages at Higher in recent years. Although Spanish has increased in popularity, the number of pupils taking French and German has fallen steadily.

There has also been concern about the time primary schools spend teaching languages, as well as the lack of language expertise among primary teachers.

The demise of languages in secondary has been blamed on the fact many schools no longer see languages as compulsory.

And as part of cuts to education budgets, two-thirds of local authorities have scrapped foreign language assistants.

The report warns the fall in pupils taking languages to exam level could have an impact on the qualifications the Scottish Qualifications Authority can offer, and "on higher education institutions maintaining their investment in language departments".

Many universities have closed language departments in recent years or downgraded courses.

A recent survey found nearly all pupils from secondary schools in many European countries learn two or more foreign languages. More than half of senior secondary UK school pupils do not study foreign languages.