Ministers must urgently sort out youth unemployment or one in six younger individuals is not going to be in employment, schooling or coaching (NEET) inside 5 years, a serious evaluate has warned.
The interim report of the federal government commissioned evaluate by former well being secretary Alan Milburn stated younger individuals are being failed by a “damaged system”.
It discovered that six in 10 younger people who find themselves at the moment NEET have by no means had a job, up from 4 in 10 in 2005, and the federal government spends 25 occasions extra on welfare for 16-24 yr olds than it does on serving to them get jobs.
Apprenticeship begins for 16–24 yr olds have fallen by 35% because the Apprenticeship Levy was launched in 2017, and Stage 2 begins, the entry-level provision that issues most for younger individuals outdoors work, have fallen by 68%.
Solely 2% of present apprentices have been beforehand NEET, which the report stated exhibits the system isn’t reaching the younger individuals who want it most.
As well as, over the previous 20 years, the variety of mid- and lower-skilled jobs within the
financial system has fallen by round 1.6 million, and hospitality vacancies have diminished by round half in 4 years.
Warning that “we’re prone to a misplaced era”, the report stated:
“On the very level when they need to be beginning grownup life, gaining confidence, constructing abilities, studying the habits of labor and taking their first steps in direction of independence, too many have gotten indifferent from schooling and employment altogether.”
Because the report was launched, new knowledge from the Workplace of Nationwide Statistics discovered that an estimated 1,012,000 younger individuals have been NEET in January to March, a rise of 55,000 from October to December 2025. It quantities to 13.5% of 16 to 24-year-olds and is the primary time it has been greater than 1,000,000 since 2013.
The report warned that the full variety of NEETs might rise to 1.25 million by 2031 if steps usually are not taken to correctly repair schooling, well being and welfare programs which can be “now not match for objective”.
It stated that the present price of NEETs to the financial system is £125 billion, greater than the UK spends on schooling, and of the estimated £8.1 billion spent on younger individuals accessing key advantages, round £4.4 billion goes to NEETs with an estimated £3.2 billion that would have been prevented if these individuals have been in work and incomes above the earnings threshold.
Sick-heath ‘a major driver of who turns into NEET’
Sick-health can also be a problem, with the report saying “it’s now not a background think about youth disengagement” and is “now a major driver of who turns into NEET and who stays NEET”.
“For the primary time in maybe two centuries, adjustments in well being, particularly psychological well being, are impeding financial progress and inflicting a contraction within the provide of labour,” the examine added.
One in 5 of all NEET younger individuals reported psychological well being as their major well being situation in 2025, greater than double the 7.7% in 2012, and incapacity charges amongst NEETs have greater than doubled over the previous 15 years.
The examine described the period of staying NEET as a consequence of sickness as “devastating”. Of those that fell into this class between 2017 and 2019, nearly eight in 10 have been nonetheless NEET greater than two years later. “This isn’t a transient drawback”, the report warned, “it’s long-term detachment pushed by ill-health and by the lack of programs to accommodate health-based wants”.
However many younger individuals are eager to be employed. A survey discovered that 84% needed to discover a job, schooling or coaching. Many NEETs are additionally effectively educated with 30% getting good GCSEs or equal, over 21% having a Stage 3 qualification and 15% with a level.
Milburn stated:
“I don’t settle for the caricature of a era that’s not eager about employment. I don’t settle for that psychological well being is solely an excuse. Nor do I settle for that the reply is to inform younger people who find themselves struggling merely to attempt tougher. These are myths. Typically merciless ones. Younger individuals are to not blame. Establishments that ought to have supplied alternatives to them are those which have failed.”
Younger individuals trying to work are sometimes hit by “functions disappearing right into a void, interviews adopted by silence, and recruitment processes that felt designed to discourage slightly than choose”.
The report hlighted examples together with a person in Newcastle who has utilized for over 60 jobs with out success, a lady in Camden who utilized for round 50 roles over one summer season, heard again from 10, and was rejected by all 10 with out clarification, and a younger man in Wrexham who utilized to round 150 apprenticeships, however couldn’t take up the one provide he obtained as a result of it might have required him to maneuver to Europe.
The report recognized that the variety of entry degree jobs have fallen specifically.
“The primary rung of the profession ladder has thinned,” Milburn stated. “For too many younger individuals, it’s now merely out of attain. That locations them in a hopeless catch-22 the place employers ask for work expertise however the alternatives for younger individuals to realize it have narrowed or gone.”
Suggestions
Alan Milburn will publish a last report later this yr with suggestions.
Looking forward to that, the report stated:
“What’s now not credible is to do nothing and hope that financial progress alone will clear up the issue. Development is not going to soak up younger individuals who have by no means labored, whose well being prevents participation, whose anxiousness ranges are greater and whose profession ladders have turn out to be tougher to ascend.
“This evaluate says: sufficient. Not one other programme. Not one other pilot. A system. Constructed round participation. Accountable for outcomes. Everlasting in its structure. With new ladders of alternative. Funded at a degree that treats younger individuals as an funding, not a value. Resilient to the issues of tomorrow, in a labour market which is probably going initially of one more transformation. And worthy of the era it’s presupposed to serve.
“A brand new mindset is required. Our nation can select otherwise. One which prioritises the following era. This evaluate calls for that it does.”
Keir Starmer: ‘Sobering’
Prime minister Keir Starmer described the report as “sobering”, and stated he would take motion. He advised broadcasters:
“It is a longstanding, long-term drawback. It’s been happening for a few years, it’s difficult and complicated. As Alan Milburn makes clear, there’s no single factor that you may say that’s the rationale.”
Starmer stated the federal government has already launched grants for employers that make use of younger individuals who have been unemployed for six months, and people and not using a job or coaching for 18 months can be assured six months of labor or coaching.
“So a few of these measures are in place. We clearly must [do] extra. That is, , I believe an actual sobering report, and we can not afford – we is not going to permit – a misplaced era, and so we’ll work with Alan now on what extra must be carried out.”
Enterprise response to Alan Milburn’s ‘Younger individuals and work’ interim report
Tina McKenzie, coverage chair of the Federation of Small Companies:
“It’s welcome to see rising recognition that too many younger individuals are being left stranded between schooling and work. There are large numbers who wish to graft, practice, begin a enterprise and construct careers, however too typically the alternatives merely usually are not there for them to get began.
“It is usually proper that well being coverage ought to think about what ill-health means for a teen’s means to work. We should always deal with the situation and think about the knock on results on confidence, routine and future prospects. For a lot of younger individuals, work is as a lot part of restoration and stability as any medical intervention. Well being coverage designed with that in thoughts will do extra good for extra individuals.
“However ministers can not ignore the impression hovering employment prices are having on hiring. Employment prices are a significant component in terms of the variety of NEETs – which is a disgrace, as a result of small corporations wish to again the following era. Nonetheless, good intentions alone don’t create entry degree jobs after they bodily can not afford the wage invoice. That is significantly prevalent in hospitality and retail, sectors the place younger individuals would historically get their first style of labor.
“New analysis exhibits that 30 per cent of small enterprise employers have recruited fewer staff because of the Nationwide Residing Wage and Nationwide Minimal Wage will increase in April. Equally, extra small companies are actually planning to chop staffing ranges (21%) than improve it (8%), whereas 23% diminished headcount within the final three months in comparison with simply 8% rising it.
“There additionally must be a far stronger deal with investing in work itself. Too typically, much more public cash goes into managing financial inactivity than serving to smaller corporations create the roles, placements and alternatives that cease younger individuals falling out of labor within the first place.
“If the federal government continues to boost employment prices and tighten laws, it is going to be these already furthest from the labour market who lose out on very important alternatives. That’s why, on the Autumn Finances, the Employment Allowance should rise, so small corporations usually are not priced out of making the very jobs and apprenticeships ministers say they wish to see extra of.
“Authorities schemes can not simply turn out to be a rebate for hiring that giant employers have been already planning on doing. Incentives and paid placements must be ringfenced for small corporations, the place younger individuals are almost certainly to get a primary probability.
“However this additionally must go additional than employment alone. Younger individuals are vastly entrepreneurial and infrequently missed in these debates. FSB analysis discovered that nearly three in 5 younger individuals both personal, or are eager about proudly owning, a enterprise, whereas 28% already run a aspect hustle. We must be capitalising on that. We must be constructing enterprise abilities earlier, bettering careers recommendation round self-employment, and creating clearer pathways for younger entrepreneurs from all backgrounds.
“The federal government must also triple the Buying and selling Allowance and rebrand it as a ‘Facet Hustle Allowance’ to assist extra younger individuals flip additional earnings into sustainable companies. The allowance has been frozen for greater than eight years regardless of the massive rise in younger individuals beginning aspect hustles and exploring self-employment.”
Shevaun Haviland, director common of the British Chambers of Commerce:
“The Milburn report should be a wakeup name for policymakers about the disaster of younger individuals not in employment, schooling and coaching.
“Until pressing complete motion is taken a complete era is prone to being minimize unfastened from society, and financial progress can be hampered.
“At this time’s report precisely diagnoses the issue, with prompt options to return later within the yr. The problems recognized within the Milburn Evaluate have lengthy been reported by companies. It is necessary that authorities urgently takes steps to handle these.
“BCC analysis exhibits that greater than half of companies are going through abilities shortages, however excessive employment prices are inflicting many to chop again on recruitment and coaching.
“Each younger individuals and employers typically see danger as a barrier to taking an opportunity on a job or on somebody with much less expertise. We welcome the Jobs Assure which can cut back this concern issue on either side.
“Now, authorities must take even bolder motion to sort out these in danger earlier than they turn out to be NEET. Which means earlier and higher careers schooling; extra coaching routes at Stage 2; and lowering prices for employers.
“Companies are eager to have interaction with the Milburn Evaluate and with authorities within the coming months as options to those important points are developed. For instance, Chambers are already bringing companies to the desk by means of Native Expertise Enchancment Plans, to match up coaching with the true jobs obtainable to younger individuals. The LSIP construction generally is a ready-made a part of the answer to those issues.
“It’s welcome to see the Milburn Review recognise the “overwhelming want” of most companies to make use of younger individuals from their native space.
“With out robust enterprise enter, the federal government dangers deciding on interventions that fail to sort out the NEETs disaster in a significant manner.
“An bold method is required between well being, schooling, the welfare system, and employers. Options must be domestically rooted however nationally joined up.”
Lizzie Crowley, senior abilities adviser on the CIPD:
“Younger individuals are determined for a possibility to show themselves, however many are struggling to navigate a labour market the place entry-level alternatives, work expertise and structured development routes have turn out to be tougher to entry.
“At this time’s Milburn Evaluate findings and ONS figures spotlight that a lot bolder motion is required to help youth employment given the collapse within the variety of apprenticeships for 16-24 yr olds and the common discount in entry degree roles.
“With greater than one million younger individuals not in schooling, employment or coaching there’s a robust case to introduce an Apprenticeship Assure for all 16-24 yr olds. CIPD analysis exhibits that 9 in 10 employers would help this and half say they would offer extra apprenticeship locations over their present provision if this have been launched. This would wish backing from the UK Authorities and at regional and sector degree. With out this degree of ambition, there’s an actual danger of a misplaced era of younger individuals.”
“The evaluate’s findings mirror long-standing considerations concerning the mismatch between the abilities employers want and people the schooling system is delivering.
“It’s been clear for a while that larger funding is required in high-quality vocational and technical pathways, in addition to stronger employer engagement in course design, and a joined-up workforce technique linked to labour market demand and regulation.
“Whereas there must be a major deal with bettering apprenticeships and different vocational routes into work, the federal government should additionally recognise the hyperlink between new measures within the Employment Rights Act 2025 and employers’ means to put money into ability growth and jobs for younger individuals. For instance, adjustments to the unfair dismissal qualifying interval are possible to make employers extra cautious about taking over younger individuals whose potential is untested and might make it tougher for corporations to increase probation durations if new starters want extra time to enhance.
“It’s additionally essential that proposed new necessities for minimal assured hours for zero hours staff don’t discourage employers from offering these roles given they permit younger individuals to stability finding out whereas working. It’s essential the federal government is in listening mode and is ready to compromise on these measures earlier than they’re finalised in secondary laws to make sure they don’t additional prohibit employment alternatives for younger individuals.”
Karim Fatehi OBE, CEO of the London Chamber of Commerce and Trade:
“Alan Milburn’s evaluate highlights a rising danger to London’s financial system and the UK’s wider progress ambitions. Companies throughout the capital proceed to face important labour and abilities shortages, and with practically a million younger individuals nationally not in schooling, employment or coaching, the hole between obtainable expertise and employer demand is changing into more and more damaging for productiveness, funding and financial progress.
“Expertise shortages stay one of many greatest considerations raised by London companies. Companies throughout a number of sectors are struggling to recruit and retain employees, proscribing their means to develop, make investments and compete internationally. At a time when companies are additionally going through rising employment prices and continued financial uncertainty, the decline in entry-level jobs, apprenticeships and work expertise alternatives highlighted on this report is deeply regarding.
“The discovering that nearly 60% of economically inactive younger individuals have by no means had a job demonstrates the size of the problem, but many employers, significantly SMEs, are discovering it more and more tough to offer alternatives for younger individuals below present financial circumstances.
“LCCI has persistently known as for larger flexibility within the Apprenticeship Levy to permit employers to put money into pre-apprenticeship coaching, shorter abilities programmes and upskilling.
“We additionally help long-term funding in employer-led Native Expertise Enchancment Plans (LSIPs), to make sure coaching provision is best aligned with the wants of companies and native labour markets. Crucially, the Milburn Evaluate’s suggestions should now be matched by a transparent and significant dedication from authorities to scale back the price of hiring, with the Division for Enterprise and Commerce enjoying a central position alongside the Division for Work and Pensions in delivering sensible options.”
