Number of Neets in UK could hit 1.25m by early 2030s, Milburn review will say

Britain risks a 25% rise in the number of young people not in work or education to 1.25 million by the early 2030s without urgent government action to avoid a “lost generation”, a landmark report has warned.Alan Milburn, the leader of the review into why so many young people are economically inactive, said the UK risked opening up a “generational fault line” between young and old without urgent steps to overhaul schools, the health service, the welfare system and the jobs market.In his highly anticipated report to be published on Thursday, the former Labour health secretary will make the case for Keir Starmer’s government to launch a fresh push to reform health and disability benefits while drastically improving access to employment support.Calling for a reset of the system, Milburn will describe the welfare state as “exacerbating inactivity”, while arguing that new work programmes alone would fail to tackle far deeper-rooted problems.“This is not a failure of young people. It is a failure of a system stuck in the past. Whether it is education or health or welfare, that system fails to enable their participation in the Labour market,” he will say.“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 priority for the government. It should be the priority for all of us.”However, any fresh attempt at welfare reform could prove divisive after Starmer’s chaotic benefits U-turn last year, amid concerns that welfare cuts would risk driving up poverty amid the Cost of living crisis.There is a a growing sense of alarm in Britain over the prospects of the next generation, amid rising mental ill-health, worries over social media, and AI upending the jobs market.Unemployment in Britain has risen to the highest levels since the outbreak of the Covid pandemic in recent months, with young people bearing the brunt of a downturn in the economy amid the fallout from the Iran war.As Starmer battles for his political career, the prime minister has argued his government is tackling the Cost of living crisis with more financial help for struggling households and a long-term plan for jobs and growth.But with the threat of a leadership challenge from Andy Burnham – should the Greater Manchester mayor win next month’s Makerfield byelection – Labour is also locked in an increasingly bitter internal row over how to use its time in power.Milburn will say in his report that whoever leads the party into a general election against Nigel Farage’s Reform UK should make cutting youth unemployment a top priority, with a central mission to repair Britain’s increasingly broken social contract.Speaking at the launch of his interim report, the former cabinet minister under Tony Blair will warn that the promise that each generation should do better than the last is being broken, leaving parents and grandparents gripped by fear about what the future may hold for today’s young people.Experts have warned of a crisis in youth jobs, with official figures due on Thursday expected to show the number of young people not in education, employment or training (Neet) is close to breaking through a million – the highest level for more than a decade.Milburn will warn that without urgent action the number could continue rising from one in eight young people who are classified as Neet to one in six within five years – representing 1.25 million young lives.However, the government has faced fierce criticism from business groups who say Labour policy has fuelled the crisis in youth jobs. Bosses have warned that entry-level jobs have been hit by the chancellor, Rachel Reeves, adding £25bn to employers’ national insurance contributions, the push to equalise minimum wage rates between young and older workers, and the party’s drive to strengthen employment rights.Tina McKenzie, the policy chair of the Federation of Small Businesses, said: “Ministers cannot ignore the impact soaring employment costs are having on hiring … [They] are a major factor when it comes to the number of NEETs – which is a shame, because small firms want to back the next generation.”According to extracts released ahead of publication, the report will say young people are being failed by employers and the government amid a sharp decline in entry-level jobs and opportunities in hospitality, leisure and retail.It will say the “Saturday job” has long been dwindling, while the number of job vacancies in hospitality have halved in the past four years, and apprenticeship starts among young people have fallen by 35% in the past decade.Analysis shows Britain has the third-highest rate of 16 to 24-year-olds who are not earning or learning among rich European countries. Milburn’s report finds six in 10 young people who are Neet have never worked, up from four in 10, the figure 20 years ago.“It’s going in the wrong direction,” Milburn told the Guardian in an interview earlier this week. “When you look at that picture, I guess our conclusion is it’s a catastrophic systems failure.”Commissioned by the work and pensions secretary, Pat McFadden, to investigate rising unemployment and inactivity among 16 to 24-year-olds, the review is expected to argue that overhauling health and disability benefits for young people is a necessary part of the solution.McFadden said he welcomed Milburn’s report and that the government was taking action to support young people.“But we know there is more to do. I will work across government and with employers, charities and young people to drive real change, so more young people are earning or learning, not left behind. I look forward to working with Alan as he brings forward his final recommendations later this year.”