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The disaster of almost one million younger people who find themselves out of schooling, employment or coaching – referred to as ‘Neets’ – prices the UK economic system as much as £125bn a yr, the Alan Milburn assessment has discovered, as each the federal government and the personal sector had been blamed for failing to handle youth unemployment.
An in depth report on the massive numbers of younger individuals out of labor by former Blair-era well being secretary Alan Milburn has urged the Labour authorities to repair the “present damaged system”.
Milburn warned that the variety of Neets may rise to 1.25m inside 5 years.
Figures on Thursday confirmed that greater than 1m younger individuals aged between 16 and 24 had been already out of labor, schooling or coaching as of March 2026. This was a rise from a earlier determine of 957,000 in December 2025.
At a launch occasion for the report on Thursday, the Labour veteran is about to criticise the UK’s welfare state for “exacerbating inactivity” and making a system which “all too usually finally ends up placing younger individuals on a path to a life not in jobs however on advantages”.
The Milburn assessment discovered the Neets disaster price the UK round £125bn a yr in misplaced financial output and tax revenues, in addition to elevated profit and well being spending.
Neets disaster attributable to ‘damaged’ welfare system
The report referred to as on the federal government to introduce reforms throughout the schooling sector and the NHS to place an emphasis on employment, and to overtake Common Credit score to pressure younger individuals to seek for work and tackle part-time jobs with out concern of shedding their advantages.
It additionally stated there had been an epidemic of unwell well being, significantly round nervousness, melancholy and types of misery that turned “defining options” of the Neets disaster.
He attributed a number of the causes to the rise of social media and smartphones in addition to the “lengthy results” of Covid as college shutdowns stunted younger individuals’s improvement. Housing affordability was additionally a problem that “got here up repeatedly”.
Evaluation discovered that for each £1 the Division of Works and Pensions spent on employment assist for younger individuals, round £25 was spent on advantages for younger individuals.
The report stated incapacity funds for younger individuals, which may rise from round £3.2bn to £6.5bn by 2031, was failing to assist ship improved participation within the labour market, with the broader welfare system failing to prioritise early intervention
Rachel Reeves’ £25bn tax hike by means of elevating employers’ nationwide insurance coverage contributions and resolution to boost the nationwide minimal wage, in addition to Labour’s Employment Rights Invoice laws, had added prices to employers. Nonetheless, it added that the rise in youth inactivity “lengthy precedes” latest modifications.
Milburn slams employers’ recruitment practices
Milburn additionally hit out at employers for recruitment practices that had been “unproductive and demoralising” for candidates.
He criticised the proliferation of entry-level roles requiring previous expertise, employers selecting the “straightforward avenue” of recruiting international employees and placing candidates by means of automated recruitment processes.
Milburn wrote: “The younger one who as soon as may need walked into a store, spoken to a supervisor and been given an opportunity prior to now is now screened by a portal, a check, a recorded interview or an algorithm earlier than anybody has appeared them within the eye.
“In different phrases, the primary rungs on the previous profession ladder have weakened.”
Companies had been described as “passive recipients” of the schooling system reasonably than actively being “co-responsible” for employment ranges together with the DWP.
Rain Newton-Smith, the chief government of the Confederation of British Trade, stated that companies had a “central position” in fixing the Neets disaster as she urged the federal government to cut back the price of creating jobs within the UK.
Marks and Spencers chief Stuart Machin stated there remained a “likelihood” of reviving the Saturday job and giving younger individuals extra job alternatives.
A number of enterprise executives have just lately blamed the Labour authorities straight for deepening the Neets disaster. Subsequent boss Lord Simon Wolfson stated Reeves’ tax rises had squeezed entry-level jobs.
Telephones 4u founder John Caudwell stated AI would hit the roles market “like a tsunami” whereas will increase to the minimal wage and new purple tape had already made youth unemployment “dreadful”.
