Britain risks creating a "lost generation" of young people locked out of work and education unless urgent action is taken, according to a major new review led by former Labour minister Alan Milburn.
The report warned that 1.25 million people aged between 16 and 24 could be outside employment, education or training by 2031 without significant intervention.
That figure would amount to roughly one in six young people in the age group.
The findings come as youth unemployment continues to rise sharply across Britain.
Current figures show youth unemployment stands at 16.2 per cent, marking its highest level since 2014 and more than three times the wider national unemployment rate of five per cent.
Official figures from late 2025 recorded 957,000 young people classified as not in employment, education or training, commonly referred to as NEETs.
More than half were not actively searching for work.
Mr Milburn said Britain’s education, welfare and health systems were "no longer fit for purpose" when it came to preparing young people for employment.
Alan Milburn warns Britain risks ‘lost generation’ as youth unemployment rises
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The review argued Labour's spending priorities had become heavily weighted towards welfare payments rather than helping younger people secure jobs and training opportunities.
According to the report, around £25 is currently spent on benefits for every £1 directed towards helping young people into employment.
Speaking to the BBC’s Laura Kuenssberg, Mr Milburn said the imbalance risked pushing more young people towards long-term welfare dependency instead of sustainable careers.
However, the former Health Secretary rejected suggestions that younger generations lacked ambition or willingness to work.
The report found that 84 per cent of surveyed young people wanted employment or training opportunities.
Mr Milburn is expected to say: “This is not a failure of young people. It is a failure of a system stuck in the past.”
He argued that current structures too often steer younger people towards benefits rather than employment pathways.
The review also highlighted the personal experiences of young people struggling to enter the workforce.
The findings come as youth unemployment continues to rise
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Zaynah, 24, said she had submitted more than 200 job applications over the past year without receiving a single response.
She explained that ongoing health problems had prevented her from gaining work experience after leaving college.
“Getting a job is very hard because with my issues, I haven't got that much experience, I've never worked before,” she said.
Luke, a 23‑year‑old graduate from Central Saint Martins, described facing more than 400 rejections while searching for work. He secured just one interview, for a cleaning role, which he did not obtain.
“It’s humiliating,” he said. “It makes you depressed, especially the amount of rejections.”
The report also included examples of successful intervention programmes helping young people move into employment.
Rocky, who spent a year unemployed, received mentoring support through youth charity Spear and later progressed to assistant manager at Nando’s within three years.
Work and Pensions Secretary Pat McFadden, who commissioned the review, said the Government had already introduced measures designed to improve opportunities for younger workers.
Mr McFadden pointed to financial incentives for businesses hiring young employees alongside expanded apprenticeship schemes.
He also highlighted early intervention policies including support for special educational needs and the removal of the two-child benefit cap
| PAShadow Work and Pensions Secretary Helen Whately criticised Labour’s wider economic policies, arguing Labour had made it harder for businesses to recruit younger workers.
Ms Whately pointed to increased business taxation and apprenticeship funding restrictions.
Business leaders also raised concerns about worsening conditions for entry-level employment opportunities.
Rain Newton-Smith, chief executive of the Confederation of British Industry, described the findings as exposing "a tragic waste of potential".
The report noted hospitality vacancies have halved over the past four years, while competition for retail jobs has nearly doubled.