Every young person should be guaranteed a job if they are unemployed for more than two years, the Government’s official inquiry into last summer’s riots recommended today.

The inquiry, ordered by David Cameron, also said schools should be fined if pupils leave without learning how to read and write.

And it suggested schools and social services should routinely contact absent fathers, in an attempt to make them take an interest in their child.

The recommendations are included in today’s report by the Riots and Communities Victims Panel, which was launched by the Prime Minister last year following riots and looting across the country.

Three Birmingham men, Haroon Jahan, aged 21, Shahzad Ali, aged 30, and Abdul Musavir, aged 31, were killed when they were hit by a car in Winson Green during the riots.

Officers of West Midlands Police were attacked by gangs with baseball bats, had their cars rammed, and were apparently shot at.

The panel, chaired by Darra Singh, Chief Executive of Jobcentre Plus, visited Birmingham during the inquiry and held a public meeting in Handsworth last October.

Today’s report claimed there is a group of approximately 500,000 “forgotten families” who “bump along the bottom” of society.

It pointed out that a fifth of youngsters leave school with the reading ability below that expected of an 11-year-old.

The report said: “We recommend that schools failing to raise the literacy rate of a child to an age appropriate standard should cover the financial cost of raising their attainment when they move onto a new provider.”

The report also said every school should be required to develop and publish policies on “building character”, to teach youngsters the difference between right and wrong.

Some children grow up without a single positive adult figure in their lives, the report said. It continued: “Where it is in the best interests of the child to do so, we recommend that absent fathers should be contacted by statutory social services and schools about their children as a matter of course.”

Government and public services should do more to fight unemployment, the report said. It called on the Government to “provide a job guarantee for all young people who have been out of work for two years or more.”

And it called on advertising watchdog the Advertising Standards Authority to work with schools to teach children that they don’t need the latest trainers or mobile phones to be happy.

Mr Singh said: “We must give everyone a stake in society. There are people ‘bumping along the bottom’, unable to change their lives. When people don’t feel they have a reason to stay out of trouble, the consequences for communities can be devastating – as we saw last August.”