Milburn review: UK faces ‘lost generation’ of unemployed youth

Britain is at risk of creating a “lost generation” of young people as public money spent on benefits for under-25-years dwarfs investment in getting them into work, a landmark review has warned.

Alan Milburn, the Blair-era health secretary, is set to publish his review into young Neets (people not in education, employment or training) on Thursday. 

He is expected to warn that the country faces a “generational fault line” unless it confronts what he described as a whole-system failure that could lead to the number of Neets reaching 1.25m in five years from the current level of 957,000.

The review found that for every £1 the Department for Work and Pensions spends on employment support for young people, around £25 is spent on benefits, which Milburn said reflected a welfare state “exacerbating inactivity” rather than building the capability needed to get young people into work. 

He called for a wholesale shift to what he described as a “working state,” arguing that new programmes layered on top of a broken system could not work.

“We are at risk of a lost generation,” he is expected to say at the launch of the report on Thursday.

“The first rung of the career ladder has thinned. For too many young people it is now simply out of reach. That places them in a hopeless Catch-22 where employers ask for work experience but the opportunities for young people to gain it have narrowed or gone.”

Neets crisis is ‘shocking but not surprising’

The findings flatly rejected the idea that young people are unwilling to work. 

Some 84 per cent of Neets surveyed said they wanted a job or training, but the system was failing to help them find one. 

The review pointed to a labour market that has progressively closed off its entry points. 

Some 1.6m fewer low and medium-skilled jobs exist in the economy than in previous decades while apprenticeship starts among young people have fallen 35 per cent over the last decade. 

Milburn has also lamented the decline of Saturday jobs and lower vacancy levels across  the hospitality sector. 

Marks & Spencer chief executive Stuart Machin said the findings were “shocking but not surprising,” adding that a Saturday job in retail had changed his own life and that there remained “a chance” to provide a similar path to every young person.

Several business executives have recently blamed the Labour government directly for deepening the Neets crisis. Next boss Lord Simon Wolfson said Reeves’ tax rises had squeezed entry-level jobs. 

Phones 4u founder John Caudwell said AI would hit the jobs market “like a tsunami” while increases to the minimum wage and new red tape had already made youth unemployment “dreadful”.