UK spends £25 on youth benefits for every £1 on jobs help, Milburn finds

The UK government spends £25 keeping a young person on benefits for every £1 it spends helping them into work, according to Alan Milburn, the former Labour cabinet minister running a government-commissioned review into youth worklessness.

Milburn disclosed the ratio on BBC's Sunday with Laura Kuenssberg, calling it "shameful" and previewing an interim report due this week. The figure compares spending on 16-to-24-year-olds across core Department for Work and Pensions and Jobcentre Plus employment programmes with outlays on Universal Credit, Jobseeker's Allowance, Personal Independence Payment and Disability Living Allowance, the BBC reported.

The disclosure arrives at an awkward moment for Sir Keir Starmer's government. Office for National Statistics figures put the number of 16-to-24-year-olds not in education, employment or training (NEET) at 957,000 in the final quarter of 2025, or 12.8% of the age group. That is the highest level in more than a decade, and roughly 130,000 above the figure three years earlier.

A failure that runs wider than welfare

Milburn was blunt about the scope of the problem. "This is a failure of the welfare system, but it's a failure, I'm sorry, of the school system, the skills system, the health system," he told the programme, according to Yahoo News.

The shape of the crisis has shifted since the last youth unemployment surge after the 2008 financial crash. Then, the problem was cyclical: young people wanted work and couldn't find it. Now, more than half of NEET young people are economically inactive, meaning they are not looking for work at all. The Institute for Fiscal Studies estimates the group of young benefit claimants not expected to search for work on health grounds grew by roughly a third between mid-2022 and mid-2025.

Milburn pointed to social media as a structural driver, describing what he called a "bedroom generation" coping with anxiety, depression and disrupted sleep. "They are not snowflakes. People say it's a soft generation. My view unequivocally is that it isn't. It is an anxious generation," he told The Times, as reported by the Irish News.

A political minefield for Labour

The review was commissioned in November 2025 by Work and Pensions Secretary Pat McFadden, who took the brief after Liz Kendall was moved following the government's welfare U-turn. Starmer's earlier Universal Credit and Personal Independence Payment Bill cleared the Commons in July 2025 by 335 votes to 260, but only after concessions that shelved core PIP changes and gutted a projected £4.8 billion in annual savings, Al Jazeera reported at the time.

Milburn aimed a pointed message at the Labour MPs who forced that retreat. "Labour is what it says on the tin. It's the party of work. Work gives purpose. Work gives income. Work gives meaning," he said.

He was equally sharp on employers. Businesses have, in his telling, leaned on imported labour rather than train the young people on their doorstep. "Employers have been on easy streets because they have been able to import migrant labour, oven-ready," he told the Stratford Herald, in remarks reported here. His full recommendations, due in the summer, are expected to include new pastoral-care obligations on employers hiring young people with mental health needs.

The number the headline ratio doesn't capture

What much of the coverage glosses over is who the £25:£1 ratio actually describes. It tracks spending on young people inside the DWP system: claimants on Universal Credit, JSA, PIP or DLA, set against employment programmes aimed at the same group.

That leaves out an estimated 280,000 NEET young people who are not on any out-of-work benefit at all, the so-called "hidden NEETs" flagged by the IFS in its assessment of the government's youth employment package. They are invisible to Jobcentre Plus, ineligible for the new Jobs Guarantee, and largely untouched by the £2.5 billion the government has put behind its Youth Guarantee and Growth and Skills Levy reforms over three years.

The Jobs Guarantee, extended from autumn 2026 to all eligible 18-to-24-year-olds, offers fully subsidised six-month placements for those on Universal Credit for 18 months or more. A separate £3,000 Youth Jobs Grant targets roughly 490,000 longer-term UC claimants in the age group, according to the Department for Work and Pensions. Neither reaches a young person who never claimed in the first place.

The mental health question Whitehall hasn't answered

Milburn's diagnosis points at the school, skills and health systems as much as DWP. But the policy levers under active consideration sit mostly inside the welfare brief.

Disability rights campaigners have already warned that the review's focus on mental health could be used to justify stripping the Universal Credit health element from under-22s, a measure that survived the July 2025 rebellion in diluted form and remains on the table pending Milburn's full report. Minister for Social Security and Disability Stephen Timms is running a parallel PIP assessment review due to conclude in autumn 2026.

The Work and Pensions Committee, which launched its own inquiry into youth NEETs in January, noted that almost half of all job losses since June 2024 had fallen on people under 25, according to its launch statement.

The Youth Futures Foundation, which has urged ministers to adopt a "North Star" target of matching the Netherlands' 3.6% NEET rate, estimates the long-term economic prize at £86 billion. More than one in three unemployed young people in the UK have now been out of work for over six months, the charity reported in its 2025 outlook, a figure up 124% in three years.

Milburn's interim report is the diagnosis. The harder document is the one due in the summer, when the recommendations land on a Chancellor short of fiscal room and a parliamentary party still raw from the last fight over benefits.