LONDON – A surge in British youth unemployment risks creating a “lost generation,” according to a government-commissioned review that said urgent action is needed to correct a “whole-system failure.”
Without action, the number of young people not in education, employment or training – so-called NEETs – is due to hit 1.25 million within five years, up from about 1 million currently, according to the interim findings of the study, carried out by former Labour Health Secretary Alan Milburn.
He’s due to propose potential solutions later in 2026.
The findings shine a light on the deepening youth jobs crisis in Britain, which has been spurred by factors including surging employment costs, worsening mental health and the rise of artificial intelligence reducing the number of entry-level roles.
According to Mr Milburn’s review, 84 per cent of NEET young people surveyed wanted to get a job or training, but were unable to get one.
“This is not a failure of young people; it is a failure of a system stuck in the past,” Mr Milburn will say on May 28, according to a statement from the Department for Work and Pensions.
“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.”
Earlier in May, the Institute for Fiscal Studies found that just half of 16 to 24-year-olds in Britain were in pay-rolled work at the end of 2025.
Prime Minister Keir Starmer commissioned the study in November as his Labour administration sought to understand the drivers of rising youth unemployment.
The plight of young people has fuelled dissatisfaction with Mr Starmer, who faces a potential leadership challenge after heavy losses for Labour in local elections earlier in May.
Young voters in particular have been turning to the Greens, a populist left-wing party.
But economists and business leaders have partially blamed the government for the crisis.
Firms have scaled back recruitment, especially in sectors such as hospitality that traditionally employ younger workers, after hefty increases to payroll taxes and the minimum wage in 2025.
A key driver of the trend is the decrease in vacancies aimed at young people, according to the Milburn’s report.
It found entry-level jobs have long been in “sharp decline,” vacancies in hospitality – a traditional source of many roles for first-time workers – have halved in just four years, and apprenticeship starts have dropped by more than a third in a decade.
“The first rung of the career ladder has thinned,” Mr Milburn is due to say. “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.”
Work and Pensions Secretary Pat McFadden said in a statement that the UK “cannot afford to lose a generation of young people,” adding that the government was already taking action through its Youth Jobs Grant for businesses and increasing the number of apprenticeships.
“I will work across government and with employers, charities and young people to drive real change, so more young people are earning or learning, not left behind,” Mr McFadden said. BLOOMBERG