'Shameful' more spent on benefits than jobs for young people, says Milburn

The UK government spends 25 times more on benefits for young people than it does on supporting them into employment, according to former minister Alan Milburn. The author of a major government-commissioned review into youth inactivity described the situation as "shameful" and called for a complete "system reset."

Milburn's comments come ahead of the publication of the first part of his report this week. The review investigates why the number of young people who are not in work, education, or training (Neet) has reached its highest level in more than a decade.

According to the latest figures from the Office for National Statistics released in February, there were 957,000 young people classified as Neet in the UK from October to December 2025. This represents 12.8% of people in that age category, with more than half deemed economically inactive because they were not looking for work.

Speaking on Sunday with Laura Kuenssberg, Milburn stated that welfare reform is essential for the Labour government, despite some planned reforms being shelved due to opposition from Labour MPs.

"Labour is what it says on the tin," Milburn said. "It's the party of work. Work gives purpose. Work gives income. Work gives meaning."

He added: "Welfare reform is absolutely essential and needs to be done. But as I said, it's got to be within the context of a wider set of reforms to state institutions."

Milburn’s spending calculations compare the funding for 16 to 24-year-olds in core employment programmes run by the Department for Work and Pensions and Jobcentre Plus against welfare spending on key benefits, including Universal Credit, Job Seekers' Allowance, Personal Independence Payment (Pip), and Disability Living Allowance. The full methodology is scheduled for publication later this week.

Milburn stated that his initial report will attribute the issue to a widespread failure of state institutions, including the welfare, school, skills, and health systems.

"This is a failure. This is the failure of the welfare system, but it's a failure, I'm sorry, of the school system, the skills system, the health system," Milburn said. "We're not prioritising getting young people into a situation where they can be learning or earning and instead we're transporting them into the world of benefits with incalculable costs for their life chances."

Highlighting the funding disparity, Milburn said, "What is shameful [...] is that as we've uncovered in the course of this review for every £25 that we spend keeping young people on benefits, we spend only a pound helping them get into work through employment support."

While Milburn’s main recommendations will be published later this year, he indicated that the report will highlight the challenges young people face entering the workforce, including a rise in mental health problems. However, he will argue that mental health diagnoses should not prevent young people from being encouraged or expected to work.

Milburn also noted a long-term decline in part-time and entry-level positions, stating that the number of young people in employment has been falling for approximately 25 years.

"Like all adolescent boys, guess what? I couldn't get out of bed," Milburn said, recalling being sacked from his first job as a 13-year-old paper boy in Newcastle. "It's the only time in my life so far, anyway, I've ever been sacked from anything."

He added: "Effort and reward, there's something going on here and nowadays the number of young people who are actually in employment has been falling and it's been falling probably for about 25 years. Entry level jobs are disappearing, so the jobs that you used to be able to get for the first rung on the ladder, they've gone."

Due to the shortage of entry-level positions, some young people are reportedly sending dozens or hundreds of applications without receiving a response. James Reed, chief executive of the recruitment agency Reed Group, called the lack of replies "not good behaviour" and noted that job vacancies have "continued to decline relentlessly."

Reed also called on Chancellor Rachel Reeves to abolish the 1.2% increase in employer National Insurance contributions, stating that the measure is making hiring "more expensive and more difficult for employers."