The size of the lost generation of young people out of education, work or training is now a million souls. In a gruesome employment market, having the right skills to compete is essential. Yet our skills system cares more about meeting qualifications targets than the real needs of individuals or employers.

The Government seems to think that qualifications are a neat proxy for the level of skills in Britain and that a boost in the mere volume of training will automatically benefit the economy. That is why we have had a flood of official statistics in recent years showing that the numbers on apprenticeships and other vocational courses have boomed.

It is true that the number of people in apprenticeships rose to 224,800 in 2008, up from 75,000 in 1997. However, a close look shows that this growth was partly driven by a rebranding of a number of different training programmes as apprenticeships.

The sensible decision to extend funding to apprenticeships for over-25s masked a 16 per cent decline in the number of 16-18 year-olds taking an apprenticeship in 2008. Moreover, a completion rate of just 53 per cent does not signal great success.

Apprenticeships are an easy sell politically – voters have heard of them (although they may no longer be what they expect). Politicians see the popularity of well-established employer-run schemes and assume it follows that apprenticeships should be rolled out to all sectors at all levels. The hitch that it doesn't want to acknowledge is that not all sectors or employers want them.

A general desire to boost apprenticeships is a good thing. But the Government's approach should not be about driving up supply and then finding artificially created demand to meet this surplus. Great energy (and money) should not be spent on foisting apprenticeships upon employers who receive no real benefit from these sorts of schemes.

If skills policy is going to make any difference it has to be about listening to what young people really need, and what employers really want. Not about notching up another point on a dubious national qualifications target.

The author is head of the education unit at Policy Exchange. The think tank is publishing a report, Get Britain Working, on Monday