To tackle the mounting challenges of knife crime, mental health and future employment, the all-party parliamentary group (APPG) for youth affairs has called for political leadership "from the top".
This would include a Department for Education minister, who would be answerable to parliament and government for youth policy.
Also among the moves proposed is a strengthened national body for youth work to mobilise, train and support professionals, trainees and skilled volunteers.
The inquiry, which received written evidence, held parliamentary hearings and visited local youth projects and services over five months last year, also describes cuts to youth work as "short-sighted" and recommends investment in youth work to provide long-term savings.
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This relates particularly to young people who are "at risk" of crime, those who are vulnerable to being taken into care, or those who fall outside the threshold of statutory mental health interventions.
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It adds that the loss of youth services has contributed to rising knife crime, and highlights Prime Minister Theresa May's comments at this week's Knife Crime Summit, that society cannot "arrest ourselves out of the problem".
It argues that for many families who cannot afford a hobby or leisure activity or a holiday, youth clubs and youth work activities are a "game-changer", helping young people to form healthy relationships and make positive change in their communities, as well as improving job opportunities for young people.
Launching the report, the APPG's chair, Lloyd Russell-Moyle MP, said: "The loss of funding and lack of political leadership means that youth work services have been eroded.
"Long-term support for all young people sacrificed for short-term interventions for a few.
"The government's own civil society strategy recognises ‘the transformational impact that youth services and trained youth workers can have'.
"It must act now. We need a coherent approach and investment to secure and sustain youth work."
Vice-chair Ben Bradley MP added: "We need to establish a clear duty and guidance to ensure young people can access quality youth work."
Leigh Middleton, chief executive of the National Youth Agency, which provided secretariat support to the APPG, said: "At its heart, youth work harnesses the skills of all young people not fulfilled by formal education.
"We cannot expect it all to be done by schools. However, the recruitment of youth workers is in decline. Skilled volunteers have an important part to play, but they too need training and support.
"We welcome the government's commitment to strengthen the youth work workforce by working with us to open up career pathways in youth work.
"This is an important first step in response to the cross-party recommendations."