Alan Milburn, who was health and social care secretary between 1999 and 2003, has published his landmark interim report on Neets. These are the almost 1 million young people between the ages of 18-24 who are not in employment, education or training. Pat McFadden, the work and pensions minister who is overseeing the report, said Milburn’s findings “laid bare the scale of the challenge” ahead for the government.
Milburn’s assessment is stark. If action is not taken, the number of Neets could increase by 16 per cent to over 1.25 million in the next five years. More than half of those 1 million young Neets have never had a job. The cost to the state is already £125bn; if all of those 1 million young people were in work it would have contributed £38bn to UK GDP.
The coverage this morning has predictably focused on unemployed graduates. 15 per cent of Neets have university degrees and are unable to find work. I listened to some on this morning’s Today programme: downtrodden by repeated rejections and struggling to get an opportunity to stick. Sold the dream of graduate aspiration, they have now been left floundering for job openings and landed with crippling student debt. Keir Starmer has responded damningly to these findings. Writing in the Times, he described universities as no longer being the “passport to social mobility” they once were.
There is another cohort of Neets, those who are not actively searching to find a job: they make up 61 per cent of the total. My colleague Anoosh Chakelian met some of them for her excellent report into the problem, which took her to Blackpool on the Lancashire coast. There she met Dean (not his real name), a 21-year-old Neet who is not currently looking for a job and doesn’t claim benefits. He told her of his worries that an employer would judge him by his appearance and turn him away. “They look at a younger lad dressed a certain way, and think you’re going to be hurting someone when you’re not,” he told her.
Milburn has warned that if nothing is done, Britain is at risk of being home to a “lost generation”. He eschewed the idea that young people are “snowflakes” or “work-shy”, telling the BBC “This is a generation that is trying”. The government has already begun to take action to help Neets: Rachel Reeves announced an £820m package of support measures in her November budget, such as offering six-month work placements to those who have been a Neet for 18 months or more.
Is it enough? Milburn’s report has uncovered deep structural problems for young people in the UK, which have led to a breakdown in the promise that each generation will do better than the last. Later this morning he is expected to call for an increase in funding for technical and vocational courses, diagnose mental ill-health driven by social media use as a cause of high economic inactivity, and call on the government to remove financial barriers that stop young people from finding work. His assessment will describe the welfare state as “exacerbating inactivity”.
The government is now in a difficult bind. One of the biggest rebellions against Starmer’s premiership to date followed the last attempt to reform the country’s welfare system Will he get the opportunity to try again? It’s unclear. Labour’s eyes are on the by-election in Makerfield, where Andy Burnham – Starmer’s chief rival – is battling Reform to return to parliament. As a prime ministerial contender, he too will need to listen to Milburn’s findings carefully. Whatever happens, his report shows this problem is not going away. If nothing is done, it will only get worse.
This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here
[Further reading: Can Andy Burnham survive the pressure of Westminster?]
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Subscribe here to commentThis is not the first time that the “lost generation” epithet has been used. It was feared in the 1970s and 80s that there would be a cohort who would never work. It would be interesting to find out if this has been proved true: whether there are 60 to 70 year olds today who remained unemployed throughout their adult lives. Since the 70s, there have been a multitude of schemes designed to address the issue that young people are probably the most vulnerable cohort in the jobs market. They are the canaries in the coal mine: if there is to be an employment crisis, it will hit them first. One of the latest ideas was to keep young people in education as long as possible, ideally until the age of 21. Hence the huge expansion in the university population in the 21st century. Unfortunately, the result for a huge number of them has been unempoyment or under-employment coupled with a massive debt.
The youth employment schemes of the last 40 plus years were always heavily criticised. Were they any good long term? Did they just “displace” or “substitute” in terms of replacing “proper jobs” with training schemes? Were young people simply being exploited? The apprenticeship scheme was deliberately watered down in the 1980s at the request of employers, but then again, the traditional industries in which it was strongest were also disappearing. If we had stuck with apprenticeships, would this have been better for young people, or would they too have ultimately been laid off?
I am not minimising the current crisis, and as someone who emerged from university when unemployment amongst young people (16 to 25) rivalled today’s rates, I strongly empathise with the despair that is felt again today. There is no easy or quick fix. There will be schemes that are met with derision. However, something is better than nothing, and there is a vast literature from the UK and Europe about what has been tried before and what the results ultimately were. I hope those responsible look at those previous initiatives and pick up the lessons they offer for today. It will require an effort from everyone, including the private sector which needs “enlightened self-interest”. If swathes of the population remain unemployed, under-employed, badly paid and / or on benefits because their wages are inadequate (including not being able to save for a pension!), then we cannot be economically successful as a country. The more people who fall into these categories, the more every single individual and every organisation will feel the economic and social consequences.