Peers debated employment opportunities for young offenders on a motion tabled by Labour peer Baroness Healy of Primrose Hill, on 17 October 2012.
Lady Healy expressed concern about the level of re-offending among young people in England and Wales which, she said, occurs mostly in the first three months of release.
She told peers there were 7,443 18- to 20-year-olds behind bars in 2012, and that the estimated cost of re-offending to the UK economy was "up to £11bn a year".
Peers heard that young adults aged between 16 and 24 were most likely to commit an offence, but with the "right intervention and support" they were also the group most likely to desist from offending and grow out of crime.
She put forward six proposals to help young offenders, including incentives for employers to recruit former prisoners and financial assistance to help them through further education.
Moreover, the government should reconsider its plans to abolish housing benefit for under-25s, she said.
Conservative Baroness Stedman-Scott told peers she had spoken to many young people who were "sofa-surfing".
Unless they had a "sustainable and stable, in every sense, roof over their head" any employment and training support will be lost because "they will be worrying about other things", she said.
Crossbench peer Baroness Young of Hornsey lamented the rise in the number of black and ethnic minority people in the youth justice system.
Moreover, she said, about 2,000 people were sentenced after the summer riots in England in 2011 "which puts us into a downward spiral" given the current re-offending rates.
For the government, Lord Freud said there needs to be a co-ordinated response across government departments to reducing re-offending.
The coalition had "led positive change" in how to tackle the causes of crime, in order to prevent offenders from recommitting crimes, the welfare minister added.
Replying to Lady Healy's point on housing benefit for under-25s, Lord Freud stressed it was only a proposal under discussion, and no decision had yet been made.