Policy Exchange reveals the real scale of joblessness to be verging on six million

11.15am update: Just this morning the latest figures for the number of 18-24 year olds Not in Education, Employment or Training (NEET) have been released, which have hit a record high of 835,000, equivalent to 17.6% of that age bracket.

Shadow Universities and Skills Secretary, David Willetts, commented: 

"More than one in six young people are now without a job or a place in education or training. Ministers have comprehensively failed to get a grip on this crisis. Young people don't need more empty promises or celebrity gimmicks. They need more apprenticeship opportunities, more postgraduate places and better careers advice.”

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Policy Exchange scores a good media hit with the splash in today's Daily Express, coupled with coverage elsewhere in the papers, as it reveals the  true scale of unemployment across the country.

A new report by the think-tank puts the actual number of Britons out of work and living on benefits at 5.96 million - somewhat different from the official tally of 2.44 million, according to the latest figures.

Policy Exchange calculates the figure based on the number of those of working age living off the following benefits:

• 1.58 million on Jobseeker's Allowance
• 2.6 million on incapacity benefit and the new Employment and Support Allowance
• 736,000 on lone parents' benefits
• 400,000 on carers' benefits
• 363,000 on disability benefits
• 182,000 on other income-related benefits 
• 95,000 on bereavement benefits

It also reminds us that the cost of the benefits system has risen from £93 billion in 1997 to £193 billion today, all of which will present a considerable challenge for an incoming Conservative Government if elected next year, as Policy Exchange's director Neil O'Brien explains:

“The narrow unemployment figures we are used to seeing tell you less and less about the real number of people who are trapped on benefits. To get the full picture you have to look at all the different benefits, including Incapacity Benefit and Income Support.

"Our unreformed benefits system is too complicated. It gives people too little financial incentive to work, and too little pressure and help to find work. Other countries have successfully reduced the number on benefits. We will need to totally change our system. There’s nothing kind about leaving people to rot on benefits.”

Shadow Work and Pensions Secretary, Theresa May, said the report demonstrated the urgent need for radical welfare reform:

"These figures plainly show ­Labour’s complete failure to get to grips with our welfare system. Too many people have been abandoned on out-of-work benefits and now sadly the recession has made their situation even more desperate. The Government should adopt Conservative proposals for bold, radical welfare reform to help these people and their families before it’s too late.”

Mrs May gave a speech identifiying the principles underpinning the Conservative approach to welfare reform earlier in the year and also answered Conservative Home readers' questions about welfare reform and unemployment.

Jonathan Isaby