Speaking at the annual youth justice convention in Brighton, Blunt said progress on offending and numbers in custody will be difficult to achieve unless change is embraced.
"We know that the system must be reformed if it is to meet the challenges ahead," he said.
"It will be very difficult to simply hold performance at current levels in this economic environment and the associated social environment in the short to medium term."
Blunt, who has previously called for a shift to an early intervention approach in youth justice, said the government’s vision for the youth justice system is one that prevents "today’s troubled young people and children becoming tomorrow’s hardened criminal class".
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