British Chambers of Commerce Director General, David Frost said:
"This is a national disgrace, which is a direct consequence of the failure of our education system to engage young people and prepare them for the world of work. When 45 per cent of 16 year olds do not reach the minimum employability standard of five GCSEs at grade A-C including English and maths, it is no wonder that so many are economically inactive.
"While government appears to be making progress with 16 to 18 year olds, it seems that in reality, the problem is just being pushed higher up the age scale. Over half a million 18-24 year olds (12.5 per cent) are now unemployed, an increase of 15,000 on the last quarter.
"And while overall numbers of 16-17 year olds not in education employment or training have fallen, 25 per cent (185,000) of young people at this age are still in this category.
"Too many young people are not fulfilling their potential. Government must ensure that reforms to the education system are successfully seen through if we are to solve this problem. It must also tackle the culture of worklessness and low aspiration that exists in many communities. If young people do not continue their education or enter the workplace, it is likely that they will fall into a dangerous cycle of dependency on the benefits system."