Pupils as young as six must be targeted if the Government is to stand any chance of tackling disengagement from education among post-16s, a report claimed this week.
Research by left-of-centre think-tank Demos also says politicians have "failed to recognise" that youngsters classified as Neet (not in education, employment or training) in England are merely the "tip of the iceberg".
Ministers need to focus their attention on early intervention, Demos says, by targeting children who fall behind as early as Year 2.
Sonia Sodha, a senior researcher at Demos, said the Government's approach had been "too little, too late".
"Investing in tackling the causes of being Neet earlier on - such as not being able to read - is better for children and much cheaper for the taxpayer," she said.
"For example, every Pounds 1 spent on reading tuition for six-year-olds falling behind has been estimated to save the taxpayer more than Pounds 10 over their lifetimes."
Ms Sodha added: "Education policy over the past decade has been too focused on trying to roll out one-size-fits-all national initiatives. We need to provide more support to schools to help them provide effective and innovative services that work for their children."
According to Demos, 16 per cent of children in England make no progress in English and maths between the ages of seven and 11, and 8 per cent leave primary school with levels of literacy andor numeracy below those of the average seven-year-old.
It estimates the cost to the public purse of failing to master basic numeracy during primary years at up to Pounds 2.4 billion each year; the figure for literacy is thought to be Pounds 2.5 billion.
The report recommends early-intervention initiatives such as Reading Recovery, an intensive one-to-one tuition programme that has been found to bring 80 per cent of participants up to average reading levels for their age.
A spokesperson for the Department for Children, Schools and Families said: "Between 2006 and 2007, we saw a reduction of around 20,000 in the number of young people aged 16-18 who were Neet and, since 1997, we have halved the number of young people leaving school with no qualifications. We have set ourselves an ambitious target of getting the proportion of Neets down to 7.6 per cent by 2010."
A HIGH PRICE TO PAY
The Neets classification was coined in 2000 by the then Department for Education and Skills. According to DCSF figures, in 2007 9.4 per cent of 16-18s were Neets. The 2007 report, The Cost of Exclusion, from the Prince's Trust and the Royal Bank of Scotland, estimated that the UK's one million Neets cost the economy Pounds 3.65 billion a year.