The number of young people not in education, employment or training (Neet) in England has dropped to its lowest level since 2005.

Official government figures show there were 774,000 16- to 24-year-olds who were Neet (13.1 per cent) from January to March this year, down 135,000 on the same period last year.

The number of 16-18-year-old Neets in that period was 122,000, down 29,000 on the same period last year, and the lowest since comparable records began in 2001. The figures also show that 94.2 per cent of 16 and 17-year-olds are participating in education and training, the highest since 2001.

Chris Jones, chief executive of the City & Guilds Group, said while it was “great” to see fewer Neets, “we can’t rest on our laurels”.

“There are still 13.5 per cent of young people in this position, slipping through the cracks. It’s creating a lost generation of talent and I worry about Britain’s economic future because of it.”

Mr Jones said England needed a curriculum that teaches young people the skills they need to get on in life, and that employers are actually looking for.

“We all have a role to play. It’s time for educators, employers and the government to step up and support young people so they are not destined for a lifetime on the dole,” he added.

Martin Freedman, director of economic strategy and negotiations at the Association of Teachers and Lecturers (ATL) said it was “curious” that the figures made no reference to the effect the first cohort of young people subject to the rise in the participation age to 17 had on the figures.

Skills minister Matthew Hancock said there was more to do but the figures showed the government’s economic plan was working.