The Number That Should End the Debate

For every £25 the UK government spends on benefits for young people aged 16-24, it spends £1 getting them into work.

That ratio — 25 to 1 — comes from Alan Milburn, the former Labour health secretary commissioned by the current Labour government to investigate the youth inactivity crisis. He told BBC's Laura Kuenssberg on Sunday that the figure was "shameful."

He's right. It's also not surprising when you look at how the system is designed.

Where Things Stand

According to the UK's Office for National Statistics, there were 957,000 young people classified as Neets — Not in Education, Employment or Training — from October to December 2025. That's 12.8% of everyone aged 16-24 in Britain.

More than half weren't even looking for work. They weren't counted as unemployed. They were simply gone from the workforce entirely.

That's the highest level in over ten years.

Not Just a UK Problem — But the UK Is Doing Worse Than Most

The Resolution Foundation published a separate report making the international comparison explicit. Out of 22 wealthy OECD nations analyzed, only Italy and Lithuania had higher Neet rates for 18- to 24-year-olds than Britain.

The UK's rate jumped from 13% in 2019 to 15% in 2025, according to the Resolution Foundation. Germany's rate is lower. Denmark's rate is lower. The Netherlands' rate is three times lower than Britain's.

The Netherlands — a country not exactly famous for sink-or-swim capitalism — has a youth inactivity rate one-third of the UK's.

Four Causes, One Crisis

The Resolution Foundation identified what it calls a "quartet of causes" behind Britain's slide:

1. Rising ill-health among young people — mental health problems in particular
2. Weak vocational education — if university isn't for you, there's not much else
3. A hands-off benefits system — benefits with minimal conditions or employment expectations
4. A deteriorating jobs market — the Resolution Foundation says a weaker labor market explains just over half the rise since 2019

Milburn's report, the first part of which is expected this week, goes further. He calls it a systemic failure — not one ministry's fault but everyone's. "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," Milburn told the BBC.

What Mainstream Coverage Is Getting Wrong

BBC and Guardian coverage is accurate on the facts but soft on accountability.

Both outlets note that Labour shelved planned benefit reforms after opposition from their own MPs. Neither pushes hard on that contradiction: the government commissioned a report telling them the system needs a "complete reset," then backed off reform before the report even published.

The Guardian buries the employer cost angle. Chancellor Rachel Reeves's £25 billion hike in employer National Insurance contributions — implemented in 2025 — is making it more expensive to hire young, entry-level workers. Businesses have said so publicly. The Resolution Foundation acknowledges the weaker jobs market is the single biggest driver of rising Neet rates. Connect those dots and Reeves's tax hike becomes directly relevant to youth unemployment. The Guardian mentions it, then moves on.

Neither outlet focuses seriously on the welfare conditionality question — whether benefits should come with real expectations attached. That's the commonsense conservative case that neither left-leaning outlet wants to engage with directly.

The Incentive Problem Nobody Wants to Say Out Loud

When you spend 25 times more maintaining a problem than solving it, you've built a system that perpetuates dependency — not by malice, but by design.

A young person in the UK today can receive Universal Credit, Personal Independence Payment, and other support with very limited expectation of participation in employment programs. Milburn's own spending comparison shows how small those programs are relative to the benefits budget. You can't credibly claim a system is designed to move people into work when it allocates resources in a 25:1 ratio the other way.

Milburn frames this as a budget priority failure. He's correct. But it's also an incentive architecture failure. Build a system that makes inactivity financially tolerable and asks almost nothing in return, and you'll get more inactivity.

What Needs to Happen

Milburn is calling for a full "system reset." The Resolution Foundation wants investment in vocational training, stronger employment support, and reforms to how benefits interact with job-seeking.

Both are right that the current setup isn't working.

What neither fully reckon with: Labour raised the cost of employing people — especially at the lower end of the wage scale — right as youth inactivity was already climbing. That's a self-inflicted wound the government will have to answer for regardless of how good the Milburn review turns out to be.

Nearly a million young people are sitting on the sidelines. The UK is spending its way deeper into the problem. And the political party in charge commissioned the report telling them that — then flinched on the reforms before it even published.