A major government-backed report has revealed that youth unemployment is costing Britain more than £125bn annually, as the number of young people not in work or education surpasses one million for the first time in over a decade. The review, led by former Labour cabinet minister Alan Milburn, warns of a 'lost generation' unless urgent action is taken.
Milburn's report highlights that the UK faces a 25% rise in the number of Neets (not in education, employment or training) to 1.25 million within five years. It notes that six out of ten young Neets are not seeking work, and a similar proportion have never held a job, amid rising mental health issues among a 'bedroom generation' glued to smartphones.
The economic impact is severe: each Neet aged 18-24 costs the exchequer £29,000 a year on average, and individuals lose £52,000 in lifetime earnings for every year spent Neet. The government currently spends £8.1bn annually on benefits for young people, with over half going to Neets, and £3.2bn on health and disability benefits.
Prime Minister Keir Starmer acknowledged the 'sobering' findings and pledged to invest in a 'youth guarantee' and more work placements. However, Labour faces criticism from opposition and business groups who blame tax increases and a rising minimum wage for exacerbating the crisis. Milburn urged a 'whole system reset' involving schools, welfare and employers, and called for welfare savings to be reinvested in job support.
