Virtually the whole of Europe faces a crisis of escalating youth unemployment, and Britain is no exception. More than a million under-24s are out of work and not studying or training – over 15% of young people.

The low-skilled comprise the bulk of the unemployed. The OECD reported last week that 19% of 25- to 34-year-olds in the UK who left school at 16 are now unemployed in contrast to 9% in 2000, while for those with degrees the unemployment rate is only 4.7%. It is not being young that makes you unemployed, but being young and unskilled.

A striking exception to the European norm is Germany, with youth unemployment of only 7.5%. The German economy is the strongest in Europe, but Germany also has far fewer unskilled young people because of the success of its apprenticeship system, which embraces most school-leavers who do not go on to higher education.

Among Britain's school-leavers, one in three now go straight to higher education; barely one in 10 take an apprenticeship. Even these apprenticeships are often of questionable value. In recent years almost half of youth apprenticeships have lasted less than a year – many a matter of weeks – and barely a quarter of apprentices are studying at the equivalent of A-level or higher.

Britain needs to reform its apprenticeship system from top to bottom if youth unemployment is to be tackled. As Angel Gurria, the OECD secretary general, said of last week's statistics: "High youth unemployment is not inevitable, even during an economic crisis; it is the product of the interaction between economic context and particular policies." For decades, British governments – including the Blair-Brown government in which I was an education minister – have done a good job of enhancing higher education but paid too little attention to apprenticeships and technical education. This neglect continues. The number of youth apprenticeships fell last year.

Three key reforms are needed. First, the public and private sectors need to offer apprenticeships, and be funded by the state to do so, in far larger numbers. Barely one in three large companies, and one in 10 small companies, offer apprenticeships. The public sector is just as bad: the government department responsible for apprenticeships has only one apprentice under the age of 21, out of 2,500 employees. If the state does not take the lead, it cannot expect the private sector to follow.

Second, quality must improve. A staggering 11,775 apprenticeship qualifications are eligible for public funding. But employers rate very few; there is no proper test of competence for most of those who complete them; and although apprentices are expected to be "working towards" an acceptable standard of functional maths, English and information technology, it is unclear how often that is achieved. The businessman Doug Richard, in a recent report for the government, recommends there be one apprenticeship qualification per occupation, devised by employers. Literacy and numeracy should be embedded, and there should be a concluding test of competence – like a driving test – in place of the present box-ticking regime that many apprenticeships never even complete. These tests should be graded. In Germany, apprentices undergo a final examination in the vocational school and an oral examination and practical test in the workplace. The same should happen in Britain.

Third, information about apprenticeships is poor. The National Apprenticeships Service advertises some nationwide, but there is no marketing and co-ordination of places and applications on a par with theUniversities and Colleges Admissions Service for higher education. Ucas should become a clearing house for apprenticeships, starting with higher level apprenticeships, as well as for higher education places.

Another reason to reform? So short is Germany of apprentices that it has started recruiting from Britain. "Knowledge of some basic German is an advantage but not required," says the International Business Academy appointed for the task. They are particularly interested in young people with an aptitude for engineering, luring them with 170 hours of free German lessons and a net salary of €818 a month for three years to complete one of the best apprenticeships in the world. These are the very last teenagers Britain should want to lose.