Those of us whose job it is to help young people find work have known for some time that reform of the jobcentre system is long overdue. I would go further and say that these institutions, introduced as labour exchanges in 1909 as a pioneering way to match working men to jobs in industrial Britain, have served their time. With some honourable exceptions, they have become silos of misery and have no place in 21st century Britain. The prime minister's favourite thinktank, Policy Exchange, has called for their complete overhaul. The headline figure in the Joined Up Welfare report last week was that only 36% of people at jobcentres find sustained work. This is a national scandal.

I do not wish to decry the work of the thousands of jobcentre advisers, many of whom are doing their best for their "customers". In parts of the country there are simply no jobs and staff are often demoralised and demotivated. The ancient system is rotting from the inside. Part of the problem lies in the merging of the functions of the old DHSS benefits offices with those of the jobcentre. When Jobcentre Plus was created in 2002, it seemed like New Labour forward thinking to bring job recruitment to the very place where unemployed people gathered to claim benefits. But the culture of the benefits office poisoned everything it touched: Jobcentre Plus became the place you signed on rather than the place you went to find work.

My charity, the Creative Society, has been helping find jobs in the creative industries since 2009 and it was obvious from the start that jobcentres were the last places young people wanted to be.

Earlier this month I joined a group of young jobseekers from south-east London in an interview skills workshop. My task was to act the part of a call centre manager recruiting for new workers in the area and I saw 10 candidates in quick succession. In the horrible jargon, these young people were "Neets" (not in education, employment or training) and to use a favourite euphemism of those who work in this area, some were "a long way from the job market".

Their self-criticism was brutal and articulate. One of the candidates knew he was not confident enough about speaking in public; a young woman told me she had to be more resilient after being knocked back for several jobs; a very capable teenager said he knew he needed to come across as more cheerful. In their time working with the Creative Society, this group of young people has been utterly dismissive of Jobcentre Plus. Not one of them would consider it seriously as a place to go to find work, nor would we advise them to do so.

The Policy Exchange proposal to mutualise jobcentres and set them up in competition with private companies and charities is a classic market-driven solution. But local authorities, local enterprise partnerships, trade unions and chambers of commerce must also be involved. Across the country, job brokerages are already springing up on an ad hoc basis to bring employers and jobseekers together.

This is not a party political matter. Labour's David Lammy is one of the first frontline politicians to acknowledge that jobcentres are "not fit for purpose". Labour-controlled Newham council in east London has set up a pioneering job brokerage service in recognition of jobcentre failings. Meanwhile, the Creative Society has been working closely with the Legacy List, the Olympic Park charity, to research new approaches to job creation in the Olympic boroughs.

Organisations such as mine are essentially remedial. We teach young people about the "hidden jobs market": the word-of-mouth networks that service the real world of employment. We help them develop a coherent story to explain gaps in their CV. We step in where others such as family, schools, colleges, careers services have let young jobseekers down. None of them have failed to deliver as consistently and systematically as Jobcentre Plus.