A stark warning has been issued that one in six young people in the UK will not be in work or training within the next five years unless immediate and decisive action is taken. A major review, led by former minister Alan Milburn, asserts that the current education, health, and welfare systems are ‘no longer fit for purpose’ in adequately preparing the younger generation for adult working life, potentially creating a ‘lost generation.’
The Looming Crisis
The review projects a significant increase in the number of 16 to 24-year-olds classified as not in employment, education, or training (NEETs), estimating a rise to 1.25 million by 2031. This figure represents one in six young people in that age bracket. Current official UK data from October to December 2025 already shows 957,000 young people in the NEET category, equivalent to one in eight, with more than half reportedly not actively seeking work. The unemployment rate for this age group stands at 16.2%, marking its highest level since 2014 and more than three times the broader national unemployment rate of 5%.
Systemic Failures and the ‘Catch-22’
Milburn’s interim report critically challenges the narrative that young people lack the desire to work, revealing that 84% of surveyed NEETs expressed a wish for a job or training. He argues, ‘This is not a failure of young people. It is a failure of a system stuck in the past.’ The report highlights a ‘thinned’ first rung of the career ladder, making it ‘out of reach’ for many. This creates a ‘hopeless catch-22 where employers ask for work experience but the opportunities for young people to gain it have narrowed or gone.’ The existing systems, Milburn contends, ‘fail to enable their participation in the labour market,’ often leading young people ‘on a path to a life not in jobs but on benefits.’
Economic Shifts and Market Realities
The report underscores a fundamental shift in the UK labour market over the past two decades. The number of low- and medium-skilled jobs has declined by 1.6 million, while higher-skilled positions have surged by 6.3 million. This transformation disproportionately affects young people, who often rely on entry-level roles in sectors like retail and hospitality for their first work experiences. However, vacancies in the hospitality sector have halved in the past four years. Lord Simon Wolfson, the boss of Next, noted a significant increase in competition for retail jobs, with applications for shop vacancies rising from 10 to 19 per position in just two years. Some employers attribute difficulties in hiring young people to factors such as higher minimum wages and increased employer National Insurance contributions. Rain Newton-Smith, chief executive of the Confederation of British Industry (CBI), described the situation as ‘a tragic waste of potential’ and advocated for ‘reducing the high cost of creating jobs in the UK’ to open up more opportunities.
The Human Cost
The personal stories within the report vividly illustrate the challenges faced by young jobseekers. Zaynah, 24, who suffers from physical ill health, has applied for over 200 jobs since college without a single response, feeling her lack of experience is ‘restricting’ her. Luke, 23, a product design graduate from Central St Martin’s University, has submitted over 400 applications, securing only one interview for a cleaning role, which he did not get. He described the experience as ‘humiliating’ and leading to depression, forcing him to claim benefits. In contrast, Rocky, 23, who was ‘written off at school,’ found success after joining Nando’s as a waiter, progressing to assistant manager within three years, crediting mentoring and support from the youth charity Spear.
Government Response and Political Debate
Work and Pensions Secretary Pat McFadden, who commissioned the report, welcomed its findings and stated the government is ‘already taking action.’ He cited plans to pay companies for hiring young people, efforts to create more apprenticeships, and ‘early intervention’ measures, including special educational needs support and the removal of the two-child cap on benefits. However, he acknowledged, ‘we know there is more to do.’ The report’s findings have also ignited political debate. The Conservative Party criticised Labour, alleging that ‘Every policy choice Labour has made, from their jobs tax, capping apprenticeship funding, or trapping young people on welfare, has made it harder for a young person to take their first step into work.’ This comes after Prime Minister Sir Keir Starmer reversed welfare spending reforms aimed at saving £5bn annually by 2030.
Financial Disparity
A striking finding from the review highlights a significant imbalance in public spending. In 2024/25, for every £1 spent on employment support for young people, approximately £25 was allocated to benefits. This disparity underscores Milburn’s argument that the current system often channels young people towards welfare rather than work.
The interim report by Alan Milburn serves as a critical assessment of the structural barriers preventing young people from entering the workforce. While it lays bare the scale of the challenge and the systemic failures, it explicitly states that potential solutions will be detailed in a forthcoming final report. The urgency of the situation, as underscored by the projected rise in NEETs and the personal struggles of jobseekers, demands a comprehensive and coordinated response to avert a potential ‘lost generation’ and ensure economic participation for all young people.
