The UK's youth unemployment crisis is costing the country approximately £125 billion a year, according to an interim review led by former Labour health secretary Alan Milburn. This sum, which accounts for lost tax revenues and increased health and welfare spending, surpasses annual education expenditure in England and could escalate if the situation deteriorates further.
NEET figures reach one million
New data from the Office for National Statistics reveals that the number of 16 to 24-year-olds not in education, employment, or training (NEET) rose to 1.01 million in the first quarter of 2026, the highest level since 2013. Milburn's review warns this could climb to one in six young people by 2031, equating to 1.25 million individuals.
Risk of a lost generation
Milburn, who was commissioned by the government to examine the NEET crisis, cautioned against the 'risk of a lost generation' and described a 'generational fault line'. He stated: 'At the very point when they should be starting adult life, gaining confidence, building skills, learning the habits of work and taking their first steps towards independence, too many are becoming detached from education and employment altogether.'
The report identifies multiple contributing factors, including the pandemic, smartphone usage, and changes in the jobs market. Milburn argued that institutions designed to support young people are no longer fit for purpose, calling it a 'whole system failure'. He previously highlighted a 'bedroom generation' affected by social media-induced anxiety.
Systemic barriers and individual responsibility
While the report warns against blaming young people, it acknowledges that 'effort matters' and that young people and parents have 'agency and obligations'. However, it emphasises that individual effort alone cannot overcome poorly designed systems. The decline of Saturday jobs and fewer apprenticeship starts have narrowed routes into employment.
The estimated £125 billion annual cost includes lost economic potential, reduced tax revenue, and increased spending on health and benefits. The report states: 'This is more than we spend on education every year in England. The question is no longer whether the current position is affordable. It is whether it is sustainable.'
Government response
Work and Pensions Secretary Pat McFadden described the NEET figures as 'stark' and underlined the importance of Milburn's review. He announced government actions including a Youth Jobs Grant, more apprenticeships, and subsidised employment to create 500,000 opportunities for young people. Recommendations for fundamental reform are expected later this year.
Scott Compton from Action for Children praised the report for recognising systemic barriers, while Lindsay Judge from the Resolution Foundation highlighted the need for a cross-departmental approach and adequate funding to address the crisis.
