Too many of Britain’s next generation are in danger of being cut adrift from the world of work. The latest figures show that one in eight of those aged 16-24 are currently not in education, employment or training – or NEETs. Such a figure – which equates to more 957,000 people – has been unimaginable in the UK outside of times of crisis, such as the fallout from the 2008 financial crash. It is over 200,000 higher than before the Covid pandemic. It is higher than in many of our European competitors, with only four EU member states having higher numbers.
It is tempting to treat this as a lingering aftershock from the pandemic, much like we have witnessed with other crises, but the pattern has lasted too long and grown too large for that. Something more profound is happening, and it is pushing a generation further from the labour market with the prospect that many may end up without work for good.
While poor economic growth over recent years and the imposition of Labour’s new employment taxes have had an impact, there are large numbers of young people who are economically inactive and appear to have given up looking for work at all. Many of these have no requirement to even look for work while still being able to claim for benefits. A key factor is the huge growth in the numbers claiming disability benefits. In short, it is health and not work that has become a defining feature of their lives.
A decade ago, around a quarter of young NEETs reported a work-limiting condition. Today, it is closer to 44%, driven mainly by mental health and neurodevelopmental conditions that often emerge in adolescence and early adulthood. These young people are entering a welfare system that was never designed to support such a large cohort, particularly one with such complex needs, and is struggling to keep pace.
Periods of inactivity at this age leave a scar that is difficult to heal. Across all age groups, the likelihood of gaining employment drops by 50%; for those just starting out, such gaps can be even more damaging, as they have no prior experience to fall back on. Reports show that they tend to earn less over their lifetime, experience poorer health and face a higher risk of long-term benefit dependency.
These outcomes form patterns we have seen before, and they tell us that the NEET crisis of today will become the welfare bill of tomorrow. The longer steps are not taken to address this fundamental societal issues, the more entrenched these trajectories become. A welfare system that steps in only after a year or more of inactivity is already too late, and the consequences of that delay will be long lasting. Unless something is done, the end result might, literally, be a life of total worklessness.
The Government recognises the scale of the problem and has put forward an £820 million youth guarantee, supported by wider investment that could reach £2.5 billion. The plan includes training, apprenticeships and work placements, along with six-month paid placements for those who have been out of work for more than 18 months. These are serious commitments, and they reflect a genuine desire to help. Yet the welfare system that sits behind these programmes has not been reformed to match the ambition. Funding can create opportunities, but it cannot compensate for a welfare system that provides active disincentives to working.
Two weaknesses stand out in particular when looking at the Government’s plan. The first is timing. Support often arrives only after a young person has been out of work or education for a year or more, by which point the barriers are already high. Early intervention is far more effective, yet the welfare system still waits for inactivity to become deeply entrenched before stepping in.
The second is the basic question of whether work improves a young person’s situation. When entry-level jobs offer wages that are barely above the income available through benefits – or in some cases a lower amount – deciding to take a job seems illogical. This is not about motivation or morality. It is about the simple calculation young people make when they look at their options, and the welfare system shapes that calculation every day.
All of this is happening in a labour market that is already tough for those starting out. Vacancies are far lower than even a year ago, entry-level roles in sectors like hospitality that have traditionally been a good entry point for work have declined, and competition for apprenticeships is intense. In this environment, even the smallest of disincentives can tip the balance. The result is a fragile equilibrium in which a growing group of young people are gaining neither skills nor experience, while the state carries the cost and employers struggle to fill roles that require training and progression.
The welfare system is absorbing the consequences of this imbalance, yet it is not equipped to reverse it. This situation cannot continue. It is unsustainable for the economy and damaging for society.
This is not to say that we have reached the point of no return. Looking back at my own experience at a similar age after I was diagnosed as blind in my teens, I would not have had a successful business career without the tireless support and efforts of the Royal National College for the Blind. Support at the College is built on the expectation that every student can succeed. They build confidence, create clear pathways, and develop plans tailored to each and every person. It, and those like me that graduated from it, are a testament to how we can support people with disabilities instead of relegating them to a life of dependency.
That should be the model for Britain’s welfare system. That intervenes early, supports young people with health conditions before they are pushed to the margins and ensures that work offers a clear financial advantage over benefits. Above all, we need to be honest about what is happening. The rise in NEETs is a labour market issue, a health issue and an education issue, all at once. It is also a sign that the welfare system is struggling to adapt to a generation whose challenges look different from those of the past.
If we ignore this moment, the consequences will stretch far beyond today’s statistics. Britain cannot afford a young generation left behind.
