Britain is “at risk of a lost generation” if ministers fail to urgently tackle youth unemployment, with fears over 1 million young people could be locked out of work, education and training in the next five years.
Alan Milburn, the former Labour health secretary who is leading a review of the issue for the government, will warn the UK faces a “generational fault line”, blaming a lack of entry level jobs caused by a “failure of a system stuck in the past”.
In his interim report, Mr Milburn will warn that without urgent action, the number of young people who are neet – not in education, employment, or training – will rise from 1 in 8 to 1 in 6 young people by 2031, affecting 1.25 million young people.
Warning that the first rung of the career ladder has “thinned”, the review found first jobs or work experience is often now out of reach for many young people, keeping them in a “hopeless Catch-22”.
“Six in ten have never had a job. Twenty years ago, that figure was closer to four in ten. Detachment is no longer temporary. For too many young people it is becoming permanent. We are at risk of a lost generation,” Mr Milburn will say.
Businesses have criticised the Labour government for making it more difficult to create new jobs for young people, with some blaming the increase in minimum wage and higher national insurance contributions.
Mr Milburn’s review is expected to review the rise in youth minimum wage, and he previously told The Guardian the government mist ensure policy is providing the “right incentives for employers to employ more young people, rather than less”.
The review found that 84 per cent of neet young people want to be in work or training, but find the system is failing to help them secure one.
It warns Britain’s schools, health, system, welfare state and labour market are no longer fit for purpose, and said that layering new programmes on top of a broken system won’t work.
Pointing to the sharp decline of entry level jobs in the UK, the report says there are 1.6 million fewer low and medium skilled jobs in the economy.
It warned vacancies in hospitality have halved in the past four years alone, and Saturday jobs are also on the decline. Meanwhile, the number of people taking up apprenticeship has fallen by 35 per cent over the past decade.
“The first rung of the career ladder has thinned. For too many young people it is now simply out of reach. That places them in a hopeless Catch-22 where employers ask for work experience but the opportunities for young people to gain it have narrowed or gone,” Mr Milburn will say.
“This is not a failure of young people. It is a failure of a system stuck in the past. Whether it is education or health or welfare, that system fails to enable their participation in the labour market.
“Instead, all too often it ends up putting young people on a path to a life not in jobs but on benefits. This should be the priority for the government. It should be the priority for all of us.”
The report exposes a fundamental imbalance in how public money is spent. In 2024/25, for every £1 spent on employment support for young people, around £25 was spent on benefits.
Stuart Machin, chief executive at Marks & Spencer, said the report’s findings are “shocking but not surprising”.
He said: “A Saturday job in retail changed my life, built my confidence and gave me the skills to build a fulfilling career. We have a chance to provide a similar path to every young person.”
Rain Newton-Smith, chief executive at Confederation of British Industry, said the report “exposes a tragic waste of potential” amongst young people.
She said: “Business has a central role in giving young people a better deal. Reducing the high cost of creating jobs in the UK would open up more opportunities, while growth would provide the resources needed to support those facing additional barriers to work, whether linked to skills, health or work-readiness.”
Brian Dow, chief executive at the charity Mental Health UK, praised the report for “calling out the lazy narratives often used to define an entire generation”, and said it should be a “turning point” to create change for young people.
