Britain faces a 25% rise in the number of young people not in work or education, reaching 1.25 million by the early 2030s, unless urgent government action is taken to avoid a 'lost generation', a report by former Labour health secretary Alan Milburn has warned.
Milburn, who led the review into youth economic inactivity, said the UK risks opening up a 'generational fault line' between young and old without overhauling schools, the health service, the welfare system and the jobs market. His report, due to be published on Thursday, calls on Keir Starmer's government to reform health and disability benefits while improving access to employment support.
Milburn will describe the welfare state as 'exacerbating inactivity', arguing that new work programmes alone would fail to tackle deeper-rooted problems. 'This is not a failure of young people. It is a failure of a system stuck in the past,' 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.'
However, any fresh attempt at welfare reform could prove divisive after Starmer's chaotic benefits U-turn last year amid concerns over rising poverty. The report comes as unemployment in Britain has risen to its highest levels since the Covid pandemic, with young people bearing the brunt of an economic downturn exacerbated by the Iran war.
Business groups have criticised Labour policy, warning that entry-level jobs have been hit by the chancellor's £25bn increase in employers' national insurance contributions, the push to equalise minimum wage rates, and stronger employment rights. Tina McKenzie of the Federation of Small Businesses said: 'Ministers cannot ignore the impact soaring employment costs are having on hiring.'
Milburn will warn that without action, the number of young people not in education, employment or training (Neet) could rise from one in eight to one in six within five years. Official figures due on Thursday are expected to show the Neet number close to breaking through a million, the highest level for more than a decade.
