In poor countries, one in four young people is unable to read a single sentence. There are 130 million children who remain illiterate and innumerate despite having been in school. Nigeria has the single greatest number of children without a primary school place - a higher figure now than when the pledges were made at the beginning of the century. In Tanzania, only 3.5% of children have textbooks and there are overcrowded class sizes of up to 130 pupils in Malawi.
In west Africa, it warns of too many teachers who are on low pay, temporary contracts and with little training. The quantity of teachers would also need to be increased, with an extra 1.6 million needed to provide enough primary school places.
But aid to education has declined at a greater rate than overall aid budgets, says the report.
"One of the things that we found shocking was that low income countries faced the biggest losses in aid," says report author, Dr Rose.