The scale of youth unemployment is an “economic catastrophe and a moral failure”, Andy Burnham said as he pledged action to get young people off benefits and into work.
Almost a million 16 to 24-year-olds are neither earning nor learning and Mr Burnham said the Government has a “duty to do everything in its power” to make sure people who can work are in employment.
The Prime Minister’s intervention came as new analysis revealed teenagers and young adults make up nearly one in three people who have recently started claiming disability benefit for anxiety disorders.
Writing in The Times, Mr Burnham said the state must provide a “safety net” but there had to be a “fundamental change in the way the Government and society support young people”.
“We face a choice. We either invest in the success of our young people or pay for failure through the benefits system,” he said.
“We cannot afford to do both. I choose the first.”
An estimated 981,000 young people aged 16 to 24 in the UK were not in education, employment or training (Neet) between April and June this year, according to the latest Office for National Statistics figures, around one-in-eight people in that age group.
Mr Burnham said: “This is an economic catastrophe and a moral failure. And it must change.”
A review of the issue by former Cabinet minister Alan Milburn will be published next month and Mr Burnham said major changes will be needed.
Every young person will be guaranteed a “high-quality technical pathway, work placements, apprenticeships and the skills and experience they need to secure a good job” with “timely, high-quality mental health support” available.
But that will be matched by an “expectation that young people will take up the opportunities made available to them”, Mr Burnham said.
This comes as Lord David Blunkett, a New Labour work and pensions secretary and the MP for Sheffield Brightside, backed a report which called for a new wave of technical universities to tackle the crisis.
The Policy Exchange paper said that Barnsley and Doncaster were two of the strongest cases for a new degree-level technical institution, as they are two large towns and cities with no university of their own.
It says that these qualifications should be partnered with industry, in a similar style to Sheffield’s advanced manufacturing research centre (AMRC).
It uses the example of Hereford’s New Model Institute for Technology and Engineering (NMITE), which should be replicated across the country.
Lord Blunkett said: “Differential access to skills is one of the key drivers of regional inequality across Britain.
“The post-16 journey is vital for the needs of both SMEs and the large infrastructure programmes, which will be the driving force of substantial economic growth.
“Policy Exchange’s timely report shines a spotlight on a pioneering employer-focused institution, NMITE, which is doing concrete work to bridge these divides in post-18 education.”
Sir James Dyson, founder of Dyson added: “Britain doesn't produce enough engineers. Only about one in 11 British graduates studied engineering or related subjects.
“Without them, we can't make things, invent new products and technologies – or compete against the rest of the world. Britain needs many more places like these.”