One in six young people will not be in work or training in five years without action, report warns

A significant review has indicated that one in six young individuals risk being out of education, employment, or training within five years if "urgent" action is not implemented. This warning comes from former minister Alan Milburn, who declared that the education, health, and welfare systems are "no longer fit for purpose" in equipping young people for adult life.

Milburn emphasized the gravity of the situation, stating, "We are at risk of a lost generation," projecting that the count of 16 to 24-year-olds disengaged from work, education, or training could escalate to 1.25 million by 2031.

According to Milburn, "the first rung of the career ladder has thinned," making it "simply out of reach" for a multitude of young individuals. He is expected to elaborate on this observation in an upcoming speech, noting that this predicament places young people in a challenging position: they are frequently confronted with employer demands for work experience, yet the avenues to acquire such experience have diminished or entirely vanished.

Rising concerns regarding youth unemployment are underscored by the current unemployment rate of 16.2% for 16 to 24-year-olds, marking the highest level since 2014 and more than three times the overall unemployment rate of 5%.

Milburn has been tasked with examining the reasons behind the high number of young individuals classified as not in education, employment, or training (Neets). The latest figures from the UK reveal that between October and December 2025, there were 957,000 young people categorized as Neet, which represents one in eight of that age group. Notably, over half of these individuals are considered to be not actively seeking work.

He cautioned that this figure may expand to 1.25 million, or one in six young individuals, over the next five years without proactive measures.

Work and Pensions Secretary Pat McFadden expressed his support for the report, having commissioned it to avert a generational crisis in youth unemployment. He acknowledged the report's results and emphasized the government's existing initiatives aimed at incentivizing companies to hire young people while also creating increased opportunities for apprenticeships.

McFadden underscored the government's dedication to "early intervention" strategies, including support for individuals with special educational needs and the elimination of the benefits cap for families with more than two children. "But we know there is more to do," he acknowledged.

In his review, Milburn pointed out that government expenditure on benefits for young people is disproportionately high, estimating it to be 25 times greater than the budget allotted for employment support. He further challenged the perception that young people lack the motivation to work, revealing that 84% of surveyed Neets indicated a desire for employment or training.

"This is not a failure of young people. It is a failure of a system stuck in the past," he is poised to assert in his speech. He contends that the current education, health, and welfare systems inadequately facilitate young people's participation in the labor market, resulting in many being steered toward a reliance on benefits instead of employment. "This should be the priority for the government. It should be the priority for all of us," he concludes.

Case studies

Zaynah, 24, has experienced ongoing physical health issues that have prevented her from securing employment since graduating from college. Despite submitting over 200 job applications in the past year, she has not received any responses from employers. "Getting a job is very hard because with my issues, I haven't got that much experience; I've never worked before," she shared. To enhance her employability, she plans to pursue volunteering opportunities.

Luke, a 23-year-old who earned a degree in product design from the esteemed Central St Martin's University, has faced challenges in finding a job, despite significant efforts. He has applied for more than 400 positions but has only been invited for one interview, which was for a cleaning role that he did not secure. "It's humiliating," he admitted. "You think, 'okay, I've got all the knowledge and skills; all I'm waiting for is a job to put it into practice.' It makes you depressed, especially with so many rejections." He has since turned to claiming benefits.

In contrast, Rocky spent a year unemployed before joining Nando's as a waiter. Now, three years later, he has ascended to the position of assistant manager. Having been overlooked during his school years, he reflects on how far he has come. "I'm 23 years old and I'm a manager at Nando's," he stated proudly. "I feel happy with myself. I can look back and tell my doubters that I made it." He credits his progress to the mentorship received from a Nando's manager and continued support from the youth charity Spear.

Key findings

The report illuminated that in the fiscal year 2024/25, approximately £25 was allocated for benefits for every £1 spent on employment support for young people. It also reported a decline of 1.6 million in low- and medium-skilled jobs in the UK over the past two decades, juxtaposed with a 6.3 million increase in higher-skilled positions.

High street retailers and hospitality sectors, such as restaurants, cafes, and pubs, have historically provided initial employment experiences for many young people. However, the hospitality industry has seen a 50% reduction in vacancies over the last four years.

Lord Simon Wolfson, CEO of Next, indicated during a BBC interview that applications for shop vacancies have surged, with the number of applicants rising from about 10 to 19 for every position available.

Industry response

CEO of the Confederation of British Industry, Rain Newton-Smith, noted that the findings of the report reveal a "tragic waste of potential" and identify critical issues that must be addressed. "Reducing the high cost of creating jobs in the UK would open up more opportunities," she asserted.

Employers have raised concerns that increased minimum wages and higher taxes, including employer National Insurance contributions, have made it more challenging to hire young workers. The government has stood by its decision to raise business taxes and the national minimum wage.

Last year, Prime Minister Sir Keir Starmer abandoned proposed welfare spending reforms designed to save £5 billion annually by 2030 amid opposition from his Labour MPs.

While the review outlines the issues at hand, it does not offer immediate solutions to the crisis, as these will be addressed in a subsequent final report.

The Conservative Party criticized Labour for focusing on its internal leadership struggles instead of tackling the "generational crisis" highlighted by Milburn. Shadow Work and Pensions Secretary Helen Whately argued, "Every policy choice Labour has made—from their jobs tax and capping apprenticeship funding to trapping young people on welfare—has made it harder for a young person to take their first step into work. Their only response has been a flurry of piecemeal work programmes—an approach this report rubbishes."