A new report by former Labour Cabinet minister Alan Milburn has revealed that the UK's lost generation of jobless young people will cost the state £125 billion a year. The report found that the proportion of Neets who are suffering from a health condition that prevents them from working has increased by 70 per cent over the past decade. The report also found that the number of jobs for young people on the labour market has decreased despite employment overall increasing.
The UK's lost generation of jobless young people will cost the state £125 billion a year , according to a new report. Former Labour Cabinet minister Alan Milburn said that the total was more than the country spends on education each year.
His review came as new figures revealed that the number of Neets - young people not in education, employment or training - passed one million. Mr Milburn branded it a moral crisis that one in six youths aged 16-25 will be on out-of-work benefits by the end of the decade. He found that Britain was an outlier in the EU with only Romania recording a higher youth Neet rate.
Over the past decade, he found that the proportion of Neets who are suffering from a health condition that prevents them from working has increased by 70 per cent. The proportion of disabled young people who are Neet citing mental health as their primary condition has risen from a quarter in 2011 to nearly half in 2025. Mr Milburn said that health is no longer a background factor in youth disengagement - it is central.
He found that the explosion in mental health conditions had been in anxiety and depression as opposed to serious mental illness. He said the growth of health concerns preventing young people working had changed the profile of Neets. They are now more likely to be economically inactive than unemployed, at 57 per cent versus 43 per cent - a reversal of the situation 10 years ago.
He called for reform of the fit note system, arguing that the system should be asking what young people can do rather than signing them off work. Mr Milburn said most young people wanted jobs and denied they were snowflakes but did say employers were required to offer them more support. He highlighted the case of one large employer who said they had hired a full-time social worker to support younger staff.
Young people are different from those who came before them, not worse, not lazier, not less intelligent, but they present with higher levels of anxiety and depression. They are more likely to disclose health conditions. They expect flexibility. They value purpose.
They are less willing to tolerate poor treatment. Mr Milburn found that employers repeatedly raised the issue of the above-inflation increase in the minimum wage for not incentivising them to hire young workers. The Tories have warned that Labour policies - including the National Insurance increase for employers and new workers' rights laws - are making it too expensive to hire young workers.
But Mr Milburn also said that the issues pre-dated tax changes and pointed to figures suggesting they were unlikely to have affected youth employment. He found that despite stereotypes, many young people had good grades - nearly 30 per cent have good GCSEs and 15 per cent have a degree - but were still not able to get jobs. The report also found the number of jobs for young people on the labour market has decreased despite employment overall increasing.
Young people once made up one in seven workers but that figure is now more like one in nine, the report said. He found that the Saturday job was not the route into work it had once been and that entry-level roles have become less plentiful and more demanding. Outside education, young people are now less likely to be in work than at any point in the past decade, the report warned.
The report criticised the welfare system, finding that less than half of the total £8.1 billion currently spent on key benefits for young people came with any requirement to find work. Last year, for every £1 that DWP spent on employment support for young people, around £25 was spent on benefits for young people, it added.
It also said the numbers claiming benefits will continue to rise, saying that if current trends continue, one in 20 of today's five-year-olds will be on incapacity benefit at 22 - more than one child in every class. This could mean that the Neet rate could increase to over 16 per cent or more than 1.25 million young people not fully participating in society within five years.
Among the many shocking statistics in the report is that of those who first claimed a health and disability benefit aged 16 to 24, almost half are not in work or education fifteen years later. I heard young people describe applying for dozens, sometimes hundreds, of jobs and hearing nothing back, he wrote
UK's Lost Generation Jobless Young People £125 Billion A Year Alan Milburn Neets Health Conditions Mental Health Employment Welfare System
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