Government Spending on Youth Benefits vs. Employment Support
The government allocates 25 times more funding to benefits for young people than to programs supporting their employment, according to Alan Milburn, author of a significant review on youth inactivity.
Milburn, a former minister, described this disparity as "shameful" and emphasized the urgent need for a complete "system reset" given that nearly one million young people are not engaged in work or education (Neets).
In an exclusive interview with Sunday with Laura Kuenssberg, Milburn stressed the necessity for Labour to reform the welfare system, despite the government having postponed some planned benefit reforms due to opposition from its own MPs.
The initial segment of Milburn's government-commissioned report on this issue is scheduled for publication this week.
Milburn's analysis is based on expenditure for 16 to 24-year-olds participating in core employment programs funded by the Department for Work and Pensions and Jobcentre Plus. Welfare spending figures include key benefits such as Universal Credit, Personal Independence Payment (PIP), Job Seekers' Allowance, and Disability Living Allowance. The full methodology will be detailed in the forthcoming report.
Background and Current Youth Inactivity Statistics
Appointed by the government, Milburn was tasked with investigating the reasons behind the high number of young people not working, studying, or engaged in training programs—the highest level in over a decade.
From October to December 2025, 957,000 young people in the UK were classified as Neet, representing 12.8% of that age group, according to the latest Office for National Statistics data released in February. More than half of these individuals were economically inactive, meaning they were not actively seeking employment.
Findings on Systemic Failures
Upon release of the initial report, Milburn indicated it would conclude that the issue stems from widespread systemic failures.
"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,"
he stated during the interview.
"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."
He underscored a key discovery regarding the imbalance in funding between benefits and employment support programs.
"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,"
Milburn said.
Welfare Reform is 'Absolutely Essential'
Milburn's comprehensive recommendations to address youth inactivity will be published later this year. He advocates for a systemic overhaul, including reform of the benefits system.
Addressing concerns within the Labour Party about welfare reforms, he remarked:
"Labour is what it says on the tin. 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."
Challenges Facing Young People Entering Employment
Milburn's report also highlights the difficulties young people encounter when seeking employment, noting a real increase in mental health issues. However, he argues that such diagnoses should not preclude expectations or encouragement for young people to enter the workforce.
He observed a decline in part-time job availability for young people, sharing a personal anecdote:
"I had been sacked from my first job doing a paper round when I was 13 in Newcastle. Like all adolescent boys, guess what? I couldn't get out of bed,"
he said.
"So I was sacked for not delivering the papers. It's the only time in my life so far, anyway, I've ever been sacked from anything."
Milburn reflected on the lesson learned from that experience.
"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,"
he concluded.
