Worst youth worklessness crisis since records began

ONS figures show 600,000 are economically inactive as Milburn report urges action to tackle ‘failure of system stuck in the past’ Daily Telegraph 28/05/26 the highest level since records began, with more than 600,000 16 to 24-year-olds not in work or searching for a job.

The official figures were released on Thursday as a landmark report found that youth worklessness is costing Britain £125bn a year, nearly double the nation’s entire defence budget. The ONS figures revealed that 613,000 young people were classed as economically inactive, which means they are not in work or looking for a job. It is the highest number of young people in this category since the records began in 2001. This figure is out of a total 1.01 million young people classed as not in education, employment or training (Neet) in January to March this year, the highest level in more than 12 years. Alan Milburn, a former health secretary under Sir Tony Blair who led the review into youth worklessness, said that the UK was facing an “urgent national crisis”. Mr Milburn’s review said youth worklessness was costing the UK £125bn annually, fuelled by lost tax revenues and rising benefit payments. This is far greater than the £65bn that the UK spends on defence. This cost is also likely to grow, as Mr Milburn said that the number of Neets could rise by nearly a third to more than 1.25 million over the next five years. This would amount to one in six young people being classed as workless, compared with one in eight today. Mr Milburn warned that the UK faced a “lost generation” without urgent action. The findings were released as part of a government review into why so many people were out of employment or education. This has revealed that the rapid increase in the number of young people out of work has left the UK with the highest rate of Neets in Europe. Mr Milburn said Britain was grappling with a “moral crisis” as young people faced long-term scarring effects from worklessness. The review found that even if a 24-year-old Neet were to get a job, they could still end up £300,000 worse off over their lifetime because of a loss of cumulative earnings. This would stem largely from a delayed start to working life and lost pension contributions. Britain’s ballooning benefits bill Mr Milburn’s review has cemented concerns that Britain’s welfare system is pushing young people towards economic inactivity and benefits. The welfare bill has become a particular point of pressure for Labour. Last month, Wes Streeting, the former health secretary and a potential challenger to Sir Keir Starmer’s leadership, suggested that he would support cutting benefits to boost funding for the Armed Forces. The Government has faced calls in recent months to explain how it will raise £17.6bn to meet its pledge to increase defence spending to 3pc of GDP by 2030. The Office for Budget Responsibility has predicted that spending on benefits will rise to £406.9bn by 2030, up from £334bn today. The review found that around seven in 10 young people in receipt of a health and disability benefit would still be claiming a decade later. He said: “The damage done to the life chances of these young people is almost incalculable.” Around £8.1bn is spent on key benefits for 16 to 24-year-olds, official figures show, with more than 400,000 young people submitting claims last year. That is up from 200,000 in 2012 and expected to hit 700,000 by 2031, increasing concerns that Britain’s benefits bill will balloon further. Mr Milburn criticised the NHS for sending young people “on a path towards long-term inactivity”, while also blaming a “whole-system failure”. In particular, he said that outdated health, education, and welfare systems were no longer fit to prepare young people for adulthood. Mr Milburn said: “This is not a failure of young people. It is a failure of a system stuck in the past. Whether it is education, health or welfare, that system fails to enable their participation in the labour market. “Instead, all too often it ends up putting young people on a path to a life not in jobs but on benefits. This should be the Government’s priority. It should be the priority for all of us.” Health crisis among young people The report also found that a rise in ill health was the main driver of Britain’s youth worklessness crisis. The proportion of under-25s saying they were Neet because of a work-limiting health condition has increased by 70pc during the past 10 years. Mental health complaints are a significant factor in pushing young people out of work and on to benefits. Official figures show the proportion of disabled Neets citing mental health as their primary condition has risen from 24.3pc in 2011 to 42.6pc last year. Mr Milburn said: “For the first time in perhaps two centuries, changes in health, especially mental health, are impeding economic growth and causing a contraction in the supply of labour.” He also signalled his support for a ban on social media for under-16s, claiming that “all the evidence” points to limiting young people’s ability to concentrate. Decline of the Saturday job The report also highlighted the substantial sums of taxpayer money being funnelled towards benefits spending for young people rather than programmes to help them into work. For every £1 spent on employment support for young people in 2024-25, it found that around £25 was spent on benefits. Stuart Machin, the chief executive of Marks & Spencer, said Mr Milburn’s findings exposed “the joblessness crisis facing a generation of young people”. “The findings are shocking but not surprising,” he said. “I hear them every day from our colleagues and customers, who are worried that opportunities and role models are disappearing. “A Saturday job in retail changed my life, built my confidence and gave me the skills to build a fulfilling career. We have a chance to provide a similar path to every young person.” The report was released weeks after youth employment rose 16.2pc to an 11-year high. This has been largely blamed on tax rises under Labour, which have led to young people bearing the brunt of the drop in vacancies. Mr Milburn acknowledged that government policy had had an impact, claiming that ministers had to be very careful to “maximise jobs for young people, you’ve got to minimise the risk for the employer”. The latest official statistics show that the number of vacancies recently fell to a five-year low, with just 705,000 open roles in the three months to April. The number of hospitality jobs – a sector which employs a high proportion of people aged 16 to 24 – has also halved in the past four years. This has led even young people with strong qualifications to struggle to find work. Figures show that nearly 30pc of Neet under-25s have good GCSEs or the equivalent, and 15pc have a degree. A survey carried out for the report found that 84pc of workless young people wanted to be in a job or training, fuelling fears that they were being locked out of the labour market. However, some businesses are also warning that a growing number of under-25s are not “work-ready”, with young people arriving at a job with health needs that many employers are unable to support. Mr Milburn said that the rising level of ill health among young people, alongside the decline in entry-level jobs, had created “a national crisis of opportunity”. Meanwhile, the Conservatives have vowed to reassess all benefit claimants with mild mental health conditions within 12 months of taking office, to cut the welfare bill. The party has announced it would invest £231m in additional resources to ensure an extra 601,000 people are assessed on top of the Government’s typical caseload, claiming the investment would return at least £2.5bn in savings. Helen Whately, the shadow work and pensions secretary, said that the Government “cannot go on writing these people off”.