A major government-backed report has warned that youth unemployment is costing the UK more than £125bn a year, prompting Labour to consider fresh welfare reforms. The report, led by former Labour cabinet minister Alan Milburn, highlights that the number of young people not in education, employment or training (Neet) has surpassed one million for the first time in over a decade.
Milburn said the government has a responsibility to prevent a 'lost generation' and noted an appetite among cabinet ministers to overhaul the benefits system. The report reveals that the lifetime cost to the exchequer from a Neet person aged 18-24 is £29,000 per year on average, while individuals lose out on £52,000 over their working life for each year spent Neet.
Prime Minister Keir Starmer acknowledged the findings as 'sobering' and pledged to invest in a 'youth guarantee' and more work placements. However, Labour faces criticism from opposition leaders and business groups who argue that tax increases and a rising minimum wage have worsened the crisis.
Milburn urged ministers to consider welfare changes, criticising the government's previous botched handling of reforms. He called for a 'whole system reset' involving schools, welfare and employers, noting that for every £25 spent on welfare, only £1 goes to job support.
