The government spends 25 times as much on support for young adults as it does helping them enter employment, according to a damning assessment from Alan Milburn, the author of a major government-commissioned review into youth inactivity. The ex-Labour health minister described the disparity “shameful” and demanded a complete “system reset” to address the crisis affecting nearly a million young people outside employment, education or training. With 957,000 young people designated Neet (not in education, employment or training) in the latest figures—the greatest number for more than a decade—Milburn has informed the BBC that welfare system reform is “critically important”, even as the government faces resistance to planned benefit changes from among its own members.
The pronounced budget inequality exposed
Milburn’s analysis expose a underlying disparity in how the state allocates investment for youth. For every £25 allocated providing young people with state support—including Universal Credit, Job Seekers’ Allowance, Personal Independence Payment and Disability Living Allowance—only £1 goes towards employment support programmes. This 25-to-1 ratio represents what Milburn characterises as a structural failure, with expenditure data based on core employment programmes funded by the Department for Work and Pensions and Jobcentre Plus.
The disparity reveals a reactive rather than proactive strategy for youth unemployment. Rather than pouring resources into getting young people into work or training, the state seems trapped in a cycle of benefit dependency. Milburn’s forthcoming report will set out the full methodology behind these figures, but the preliminary findings indicate that allocating even a portion of welfare spending towards employment support could transform outcomes for hundreds of thousands of young people currently trapped outside the labour market.
- For every £25 on benefits, only £1 funds employment programmes
- Benefits cover Universal Credit, JSA, PIP and Disability Living Allowance
- Employment support funded by the DWP
- Full methodology will be published in Milburn’s report this coming week
A widespread breakdown throughout numerous organisations
Milburn’s assessment extends beyond the social support framework alone, revealing a far wider institutional collapse affecting young people’s future opportunities. The ex-Labour health secretary has concluded that the situation stems from shortcomings in education, skills development and healthcare services. Instead of a isolated problem, the issue constitutes a interconnected collapse in how the government assists young people in need through their crucial developmental period. This institutional breakdown has generated a ideal conditions for crisis, consigning nearly a million young people without direction deprived of the core backing needed to gain employment or undertake substantive training programmes.
The interconnected nature of these failures means that tackling youth inactivity requires more than superficial welfare reforms. Milburn stresses that the state has fundamentally lost sight of its primary purpose: prioritising young people’s capacity to gain skills or employment. Instead, the current approach passively transports struggling young people into sustained reliance on welfare support, with what he describes as “incalculable costs for their future prospects”. This constitutes not merely a failure of policy but a failure of vision across government departments and public institutions.
The root of the issue
The school system bears significant responsibility, failing to provide many young people with the basic skills and confidence required for work. When young people exit education without sufficient qualifications or employment readiness, they enter a labour market unprepared and vulnerable. The training system compounds this problem by failing to provide accessible and relevant training routes that close the divide between learning and work. Without coordinated intervention at these key transition points, young people fall through the gaps into unemployment.
Healthcare delivery also plays a significant role in youth inactivity, especially among those with mental health challenges or disabilities. The health system’s inability to deliver adequate early intervention and support renders many young people excluded from employment or training opportunities. When health barriers are left unaddressed, they become deeply embedded obstacles to economic participation. Milburn’s report will illustrate how these systemic failures reinforce each other, establishing obstacles that benefit dependency alone cannot overcome.
Why entry-level employment has become scarce
The labour market has witnessed a seismic shift over the past decade, with starter jobs increasingly difficult to secure for young people without previous work history. Employers have increased recruitment requirements considerably, often requiring credentials and work history that young graduates simply are unable to offer. The decline in apprenticeship schemes and entry-level training has increasingly restricted the routes to employment, leaving school leavers caught in a catch-22 situation: they cannot find jobs without experience, yet cannot gain experience without employment. This structural change in the job market has completely transformed the landscape young people navigate upon completing their studies.
Regional variations have worsened the problem, with opportunities centred around prosperous areas whilst economically disadvantaged regions offer precious few entry points into secure work. Young people in these localities face not only local scarcity but also the expense of relocating for work, a barrier few can manage. The shift towards more specialised, better-remunerated roles has left a shortage at the entry level of the job market that once gave crucial stepping stones into the workforce. Without readily available introductory opportunities, young people become increasingly disconnected from the job market, making the move into work increasingly challenging.
- Employers require experience that young school-leavers simply cannot have acquired
- Entry-level and apprenticeship schemes have declined significantly over recent years
- Regional disparities concentrates job opportunities within affluent regions only
The case for welfare reform and cultural change
Alan Milburn’s stark findings have reignited the conversation over how Britain’s social security framework handles young people, with his advocacy of a “complete system reset” gaining momentum amongst policymakers. The existing structure, he argues, inadvertently incentivises dependency rather than independence, funnelling young people into benefit payments whilst underfunding employment support programmes of resources. This backwards spending pattern—25 pounds on benefits for every pound spent on job support—reflects a fundamentally broken approach to youth unemployment. Milburn emphasises that social security reform is “absolutely essential” if the government is to halt the trend of nearly a million young people disengaged from work, education and training. The magnitude of the problem demands not just tweaking existing policies but a wholesale reimagining of how the state enables young people’s progression towards productive adulthood.
Beyond the economic case lies a deeper cultural question about what communities demand of young people and what young people expect of themselves. Milburn’s report suggests that prolonged benefit dependency creates psychological barriers to employment, normalising worklessness within communities and eroding the aspiration to work. The government faces pressure to demonstrate that welfare reform can be caring without being indulgent, supportive without being enabling of inactivity. This requires rebalancing incentives so that work becomes genuinely more attractive than benefits, whilst also guaranteeing that vulnerable young people receive appropriate support. The challenge for policymakers is crafting reforms that encourage behaviour modification without leaving behind people with genuine obstacles to employment.
Psychological wellbeing factors while not excusing lack of activity
Many young adults classified as Neet struggle with undiagnosed or untreated mental health conditions that genuinely hinder their ability to work or study. Depression, anxiety, and other disorders can establish genuine obstacles to employment that no amount of job centre support can surmount without proper therapeutic intervention. Milburn’s report acknowledges this situation, acknowledging that failures within the health system have contributed significantly to youth inactivity. However, recognising mental health difficulties is not the same as accepting inactivity as inevitable and acceptable. The solution lies in integrating mental health support with employment support, ensuring young adults get treatment alongside job preparation rather than either one.
The separation matters enormously: compassion for young individuals with genuine mental health struggles should not translate into a system that maintains them in benefit dependency indefinitely. Instead, the focus must shift towards timely action, rapid diagnosis, and coordinated support that approaches mental health as a pathway to work rather than an excuse for worklessness. This necessitates spending in mental health provision, development for employment staff to spot psychological impediments, and programmes designed specifically for young individuals experiencing mental health issues. Without such a joined-up approach, the current system endangers both neglecting and sustaining at-risk young individuals and perpetuating the very inactivity that the Milburn review has highlighted as damaging and costly.
What follows towards policy reform
Alan Milburn’s report, expected to be released in its entirety this week, is likely to provide the basis for substantial overhaul of the welfare system. The ex-health secretary has already signalled that a “complete system reset” is essential, implying suggestions are likely to extend well past minor adjustments to current schemes. With nearly a million young adults categorised as Neet, the extent of the issue demands thorough intervention throughout various government agencies. Milburn has underlined that reform cannot be confined to the Department for Work and Pensions only; integrated reforms across education, health, and skills systems will be crucial to respond to what he describes as structural failure undermining young people’s opportunities.
The Labour government navigates a delicate balancing act in introducing these reforms. Whilst Milburn has emphasised that welfare reform is “absolutely essential,” the administration has already set aside some planned benefit changes after facing opposition from within from its own MPs. This political caution points to that any new proposals will require careful framing to uphold party unity whilst pursuing the meaningful reforms the evidence demands. The coming weeks will reveal whether officials are prepared to embrace Milburn’s findings fully or whether political pressures will constrain the scope of reform, potentially leaving the core funding disparity between welfare and job support unresolved.