A government-backed report has found that youth unemployment costs the UK more than £125bn annually, as figures show the number of young people not in work or study has surpassed one million for the first time in over a decade.
Alan Milburn, the former Labour cabinet minister leading the review, said the government had a responsibility to the next generation to act. He noted an appetite among cabinet ministers to revisit welfare changes, amid concerns over rising youth inactivity and unemployment.
Prime Minister Keir Starmer acknowledged that further steps were required, pointing to a 'youth guarantee' and increased funding for work experience and job placements. His comments came during a visit to an apprentice training facility in west London.
The report warns that without urgent action, the number of young people not in education, employment or training (Neet) could rise by 25% to 1.25 million within five years. It also highlights that six out of ten young Neets are not looking for work, and a similar number have never worked, with a sharp rise in mental ill health among a 'bedroom generation'.
Milburn criticised the government's previous handling of welfare changes, which led to a U-turn last year, and urged a focus on reinvesting savings into employment support. The report shows that for every £25 spent on welfare, only £1 is spent on job support, a ratio Milburn described as 'shocking and shameful'.
Business groups and opposition leaders have blamed government policies, including tax increases and a rising minimum wage, for exacerbating the crisis. The report estimates that a young person who is Neet costs the exchequer an average of £29,000 a year, and over a working life, each year spent Neet leads to an average loss of £52,000.
