Britain risks seeing one in six young people fall outside employment, education or training within the next five years, according to a government-commissioned report warning of a growing “lost
generation.”
The number of 16-24 year-olds classified as NEET — not in employment, education or training — has climbed sharply since the COVID-19 pandemic and now stands at nearly one million people, or around 13% of the age group. The report warns that figure could rise from the current one in eight to one in six by the end of the decade.
Former health minister Alan Milburn, who led the review, said youth disengagement from the labour market was becoming increasingly permanent.
“Detachment is no longer temporary. For too many young people it is becoming permanent. We are at risk of a lost generation,” Milburn said ahead of the report’s release on Thursday.
While Britain has historically maintained relatively low youth unemployment compared with many European countries, the report says structural changes in the economy are now limiting opportunities for younger workers. It points to a sharp decline in low- and medium-skilled entry-level jobs despite broader resilience in the labour market over the past decade.
Milburn also criticised the welfare system, arguing it has “exacerbated inactivity” instead of helping young people return to work or training.
According to the report, 84% of young NEETs want employment or training opportunities, yet government spending remains heavily weighted toward welfare payments rather than job support. For every £25 spent on welfare for the group, only £1 is invested in employment assistance.
“The first rung of the career ladder has thinned,” Milburn said. “Employers ask for work experience but the opportunities for young people to gain it have narrowed or gone.”
Successive British governments have expanded apprenticeship programmes in an effort to address skills shortages, although apprenticeships still play a smaller role in the UK economy than in countries such as Germany and the Netherlands. Critics have also raised concerns over inconsistent training quality and limited career progression in some schemes.
The findings drew concern from business leaders. Stuart Machin, chief executive of retailer Marks & Spencer, described the report as “shocking but not surprising,” saying the trends reflected concerns shared by employees and customers alike.
Many employers argue rising labour costs — including significant increases to the minimum wage, particularly for younger workers — have made firms more cautious about hiring entry-level staff. However, recent research from the Institute for Fiscal Studies found no clear evidence that higher wage floors had significantly reduced employment overall.
The report summary did not directly examine the impact of worsening mental health among young people, an issue increasingly linked to long-term inactivity and economic disengagement. Photo by SCA Svenska Cellulosa Aktiebolaget, Wikimedia commons.
