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Dame Carol, the National Director of Health and Work, has been charged with investigating the incapacity benefit system.
Nearly 3million Britons currently claim long-term incapacity benefit, and one in five children is growing up in a family where one or both parents rely on out-of-work benefits.
The figures heighten fears Britain is breeding a "Shameless generation", named after the Channel 4 television programme which charts the lives of the dysfunctional Gallagher family, comprising the father, Frank Gallagher and his eight children.
Despite Government claims that it has eradicated youth unemployment, figures showed that there are 1.24million "Neets" in the country - youngsters aged between 16 and 24 who are not employed, in education or on a training course.
The number of Neets has risen by 15 per cent since Labour came to power in 1997.
Dame Carol said: "There are too many people with no expectation that their lives are going to get better, no structure, no shape.
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