A former chief executive of Marks & Spencer has been appointed as a government jobs adviser in its latest attempt to tackle the growing youth unemployment crisis.

Marc Bolland, who oversaw the retail chain from 2010 to 2016, will lead a summit of business leaders, amid warnings that the country risks a “lost generation” without urgent intervention.

About 1 million people aged 16 to 24 – one in eight – are not in education, employment or training. An interim report published by the former health secretary Alan Milburn on Thursday warned that this cohort – known as Neets – could increase to 1.25 million by the 2030s without radical action.

In light of Milburn’s findings, Bolland has been appointed as lead non-executive director at the Department for Work and Pensions (DWP), Downing Street said on Saturday.

Bolland, who also led Morrisons supermarket, is understood to have been chosen for the role thanks to his existing involvement with the DWP via his charity Movement to Work. The government said a collaboration with Movement to Work had already helped more than 200,000 unemployed young people find jobs.

The government said Bolland would work with “leading chief executives across sectors” to “create clear routes into work and tackle the longstanding challenge of youth unemployment”.

It added that he would also advise the work and pensions secretary, Pat McFadden, on how the government should respond to Milburn’s findings. McFadden said Bolland’s appointment sent a “clear signal” that the government was “serious about tackling that challenge” of youth unemployment.

A central part of Bolland’s role will be to work with charities supporting disabled young people to ensure they have access to training and employment opportunities, it is understood.

Bolland said he was “honoured and passionate” about working with the government. He added: “I know that working hand in hand with business to support young people gives them the best possible chance of success.”

The proportion of Neets in the UK is significantly higher than in many other developed countries. In the Netherlands, about 5% of 16- to 24-year-olds are not in education or work, while it is about 12.5% in Britain.

Milburn’s report found that six in 10 young people had never had a job, compared with four in 10 in 2005. The economic cost of the crisis was estimated to be about £125bn.

He said an increasing number of young people were being ruled as unfit to work because of health conditions, including anxiety, depression and neurodevelopmental conditions.

However, it is estimated that for every £25 the government spends on benefits for young people, it devotes just £1 to helping them find work. Almost half of those who claim a health or disability benefit before the age of 24 are still unemployed or not in education a decade later.