Britain’s lost generation: our view on the Alan Milburn report
Nearly a million young people aged 16 to 24 in the UK are currently not in education, employment or training (NEET). That’s one in eight. And the number is rising.
That is the opening finding of the new NEET diagnostic report, led by Alan Milburn and commissioned to get to the bottom of what has become one of Britain's most urgent social problems.
The scale of the problem
Two separate figures which most stand out when looking at the scale of the problem Milburn identifies: the first - nearly 60% of young people who are NEET today are economically inactive and have altogether stopped looking for work. Six in ten have never held a job, up from four in ten in 2005.
Yet despite this, 84% of NEETs say they want to find employment, education or training. The gap between wanting to participate and being able to do so, therefore, is not a failure of ambition. It is, as Milburn puts it, a failure of the institutions that should have helped them get there.
This report is not a story of unemployment, but of detachment. Milburn doesn’t reveal a generation of young people struggling to find work but then eventually landing something; he reveals a fundamental disconnection between them and the labour market.
The financial costs of such statistics are considerable. A 24-year-old who has been NEET and eventually re-enters the labour market can expect to have lost an estimated £300,000 in lifetime earnings. On a state level, the cumulative annual cost of NEETs is put at £125 billion, more than the entire education budget.
More interesting, however, are the non-financial costs that Milburn reveals. Work, he writes, is about "connection... self-respect... independence." The cost of losing it runs deeper than economics.
The causes: a perfect storm
The report is clear in prefacing that there is no single explanation for the current crisis. It does, however, highlight five interconnected failures.
Ill-health
The most significant change concerning NEETs over the past decade is the rise in work-limiting health conditions among young people. The proportion citing this as the reason they are NEET has increased by 70%.
The labour market
Milburn is very clear in debunking the myth that today’s young people lack employability. Nearly 30% of NEETs have good GCSEs or equivalent. Over a fifth have a Level 3 qualification. 15% hold a degree. The issue is therefore not supply; it is demand.
Even as overall employment has grown, the youth share of the labour market has shrunk. Entry-level roles have become fewer and more competitive. Recruitment has become more automated and less human. Apprenticeship starts for young people have fallen by more than 40%.
Milburn’s extensive conversations with employers during the course of the review give valuable insight into why entry-level opportunities are shrinking. Employers, he says, did overwhelmingly express genuine concern about the NEET crisis. They also, however, revealed anxiety about the pastoral demands of this generation. Many young people arrive in the workplace with anxiety, low confidence, and in some cases health needs that smaller firms feel unequipped to support. This results in a cautious recruitment approach, where the safer hire is almost always the older, more experienced candidate.
The education system
Those more likely to become NEET, Milburn claims, can be identified early on, at school. Children who are not school-ready at ages four to five are nearly three times as likely to be NEET at 16 or 17. Absence, poor attainment, SEND and family adversity are all proven to be risk factors.
But there is a gap between the education system and the graduate employment environment it seeks to supply: schools are measured on attainment, not outcomes. Careers guidance has improved but remains unequal. Work experience is, in too many cases, an afterthought, and the young people who most need exposure to the world of work are the least likely to get it.
The health system
For perhaps the first time in two centuries, changes in health, particularly mental health, are actively constraining the supply of labour. The health system’s focus on diagnosis is having a detrimental effect. A diagnosis, the report argues, too often becomes a gateway into the welfare system and out of the labour market, rather than a pathway back into participation
The welfare system
Our current benefits system is built on a deficit model. It pays for what a young person cannot do, rather than investing in what they can become. Less than half of the £8.1 billion spent annually on key benefits for 16 to 24-year-olds has any participation support or requirements attached to it. For a young person with a health condition, therefore, the pathway to inactivity can offer higher income, less complexity and lower risk than attempting to re-enter work. That, the report notes, is a “perverse incentive”.
What Milburn says needs change
Each of the five systems is evidently in its own state of failure, but none of them can fix themselves in isolation. The labour market won't take on more pastoral risk without policy support. The education system is measured against the wrong criteria and can't unilaterally change what it's marked on. The health system defaults to diagnosis-as-exit because the incentive structure points that way. The welfare system actively disincentivises participation because nobody has redesigned it not to.
The five causes are all downstream of the same problem: the architecture hasn't been updated. The current system was built for a different generation, and nobody has rebuilt it for this one.
For now, then, Milburn has laid the picture bare. His follow-up recommendations will be revealed in his final review this Autumn.
The Oppidan View
Milburn's report mainly concerns the extreme end: young people fully detached from education and work. The patterns, behaviours and underlying feelings attributed to NEETs, however, are very recognisable to us. We see it most clearly at two moments.
1. At the end of school
We see the same profile again and again, particularly in our work with ambitious 16-year-olds at state secondaries: strong academic record, options theoretically open, but no real sense of direction. While higher education always seemed the sure-fire route into employment, there is an increasing lack of trust in the social contract that says a degree leads into a full-time job.
2. At the end of university
Qualifications earned, expectations high, but the bridge into actual working life proving harder than expected. Parents are coming to us with increasing concern about the lack of options available for their children once they graduate.
There are, of course, parts of this problem that sit beyond any single organisation to fix. The healthcare system, the welfare system and the structure of the labour market all depend on the government architecture that Milburn calls for. The education space, however, is somewhere we can speak to directly, and there are things that schools, families and those who work with young people can do now.
What can we do?
1. Build a sense of belonging between year groups.
Peer mentoring schemes give 16 to 18-year-olds real leadership experience while giving younger students proximity to people only a few steps ahead of them. That sense of inclusion is invaluable.
2. Make aspiration a habit.
Schools that build goal setting into everyday life produce young people who arrive at key transitions already moving. The problem we see most often is not a lack of ambition, but rather young people who have never been asked to articulate what they want, and who freeze when the moment finally comes.
3. Provide exposure to the working world.
Not through sporadic weeks of work experience, but through normalising conversations between young people and working adults about the day-to-day realities of working life. Far too few young people have any real sense of what the adults around them do, including their parents. Building that picture early helps them visualise the world of work long before they must navigate it themselves.
Milburn's review highlights a problem we know all too well: a disconnect between potential and participation, and between wanting to engage and knowing how. We are not researchers or policymakers, but we are in the room with these young people every day. Though the solutions Milburn proposes this autumn will be structural and long overdue, the habits that keep young people connected to aspiration, to each other, and to the world of work can be built starting now, without waiting for policy to catch up.