The charity's call comes in response to analysis it has published that shows spending on youth services by English and Welsh councils has fallen by £750m between 2010/11 and 2016/17.
According to the Youth and Consequences report, spending on youth services by English local authorities fell from £1.18bn in 2010/11 to £448m in 2016/17. In Wales, annual spending has fallen from £45m to £31m over the same timescale. The figures represent a combined spending reduction of 61 per cent.
The analysis shows that youth services in the West Midlands and North West have seen the deepest cuts with spending falling 71 and 68 per cent respectively. Spending reductions were lowest in the East of England (53 per cent) and South West (55 per cent).
In Wales, spending reductions were deepest in the Mid Wales region and lowest in South West Wales.
The report states that over the six-year period studied, spending on children and young people's services has fallen by just one per cent, suggesting councils are "choosing or being required to divert spend away from universal or targeted youth services".
YMCA said the figures show that youth services are the "go to" budget for cuts because "local authorities do not recognise the long-term benefits to young people". As a result, young people are missing out on taking part in positive activities and learning and development opportunities, it added.
Denise Hatton, chief executive of YMCA England and Wales, said: "For more than half a decade, services that provide young people with positive activities that support their learning and development and allow them to meet new friends and socialise have been chipped away to the point that they are almost non-existent if it wasn't for charities and social enterprises.
"Unfortunately it is not until news of young people's loneliness or incidents like the recent knife crimes in London hit the headlines, that the role of youth services is in the spotlight. But like all news cycles, this will pass and public outrage will simmer down, yet cuts to youth services will continue if local authorities don't recognise its vital benefits to the development of young people.
"Without drastic action to protect funding and making youth services a statutory service, we are condemning young people to become a lonely, lost generation with nowhere to turn."
The report analysed spending data from local authority Section 251 returns, the Office for National Statistics and the Welsh Government.
Last week, the Labour Party pledged to carry out a consultation on the implementation of a statutory youth service as part of efforts to ensure young people in every local authority have access to youth provision, services and facilities.