Swiping the ladder
By william collinson · 4th august 2026 · 11 min read· image: commonslibrary.parliament.uk
There is a gaping hole at the centre of any vision for Britain's long-term economic health, or its proud tradition of social mobility. From January to March 2026, 1.01 million people aged 16-24 – 13.5% of this entire age group – were classified as NEET in the UK, meaning those not in education, employment or training. This could rise to 1.25 million within 5 years, constituting a deeply significant moral and economic challenge facing the UK, with scarring psychological impacts on the individual paired with long-term drains on the economy. Alan Milburn has led a groundbreaking investigation titled ‘Young People and Work’ released in May 2026, which has aimed to diagnose the problem, with the final section of the report focused on possible solutions scheduled for release later this year.
This issue should be firmly in the political limelight. Too often, as Milburn has highlighted, it has been swept under the rug. Speaking solely on economic terms, the cost of discarded potential and wider fiscal costs amounts to £125 billion. Youth disengagement has devastating effects on both the individual and the economy more widely. Out of today's 24-year-old NEETs, 45% have never had a job. If such NEETs eventually break into the labour market, their lifetime earnings would take an approximate £300,000 hit, according to Milburn's research. This growing issue, when contrasted with Britain’s ageing population that will increasingly need to rely upon its younger generations, paints a dire picture. What are the causes of this embedded issue, and how can tackling it be approached? The Milburn review has focused the political limelight on this issue, yet what has been achieved before the attention of the nation inevitably moves elsewhere? The answer, is sky-high expectation.
Stunted Transition
Why is it increasingly difficult for young people to transition from education into employment? The impact of AI should not be understated, yet it is not the only issue at play. Chiefly, the economic cost of hiring young people has gone up with rising youth minimum wage, yet more importantly in terms of risk. This points us to the central finding of Milburn’s report. Health is now a central driver of youth disengagement, largely determining who becomes and remains NEET. Public health is now a major barrier to long-term economic growth, and to counter this, a participatory culture must be instilled in how the NHS treats mental health, not just the treatment of symptoms. A reconfiguration of the system in this manner will stop mental health patients entering and leaving the care of the NHS, treated and discharged, yet no closer to breaking free of the growing ranks of the NEET youth in the UK. Support from the NHS regarding mental health must be restructured to focus on how best to equip these young people with the ability to economically participate, furthering their living standards and boosting the economy.
Britain is adept at equipping its youth with qualifications. 54% of Britains 25-34 year olds have some form of tertiary education (degrees or equivalent qualifications), although Britain performs less well in regard to vocational training. These qualifications, although a testament to Britain’s strong educational institutions, do not guarantee the crucial transition into the workforce. This institutional shortfall is exacerbated by changes to the labour market resulting from developments in AI technology, wage policy and public health. The resulting lack of entry-level roles, while clearly damaging for Britain's young trying to get their foot in the door, is equally damaging for firms in the long run. While economically it can make sense in the short term to avoid hiring young applicants – inefficiency compared to AI, higher minimum wages and concerns over the implications of an applicant's mental health problems aside – firms will suffer down the line for failing to bring in fresh talent. Applicants for gruelling entry-level jobs often use the skills they learnt in this role to progress through the firm, or move across firms and professions. They often act as platform roles, from which applicants can gain experience and develop into efficient workers in the long run. However, with fewer opportunities for Britain's young to gain professional experience, down the line firms will see the quality of their applicants drop significantly. Firms shutting the door on the next generation is simply an act of shooting oneself in the foot.
Rising Costs of Hiring Young
Britain’s youth is facing a raw deal. Regarding the graduate job market, there are two key factors, that combine to create a third, which make starting a career even more difficult. AI’s quickening overhaul of the labour market, the rising cost of young labour, and their combination have significantly increased the relative cost of hiring entry-level workers. This has made the application process somewhat of a rejection ritual, deeply psychologically damaging. This has deepened an existing mental health crisis that has kept thousands of young people as NEETs. Indeed, the proportion of the discussed million who have said they are NEETs due to a work-limiting mental health problem has increased by 70% in the past decade. Once health-related economic inactivity takes root, it rarely reverses.
The labour market will be shaped significantly by AI in the coming years, both leading to frictional unemployment as skilled workers seek to harness AI elsewhere, and more importantly, to long-term structural unemployment as a wide array of skills are rendered obsolete by AI, forcing workers into long-term unemployment. There will soon emerge a dire need for the state to provide retraining programmes for workers displaced by AI. Currently, however, the impact of AI on the job market disproportionately affects young people trying to get a foot on the professional ladder. At present, 15% of the NEET population are graduates, suggesting that, while there are certainly difficulties in the graduate market that we will address, the problem stretches far beyond.
AI is being used by firms to perform entry-level roles more efficiently than new workers would. Indeed, vacancies for entry-level positions in professional services have dropped by a third since 2022. Tasks that in the past would constitute an entry-level role – data entry, drafting, scheduling , etc – have been taken over by AI; these jobs are rarely the final destination for those applying, yet act as invaluable stepping stones for understanding the inner workings of organisations and building professional judgement. This, combined with rising costs for hiring young people, has meant that the bottom steps upon the career ladder are routinely being removed.
Not only does AI make employing young people for entry-level roles less efficient for firms, but rising youth minimum wage has made it more directly expensive. This has an impact beyond the graduate market, with employers increasingly preferring older, proven applicants to young ones with potential that, in the past, were cheaper to hire. Youth rate increases constitute the government's long-term plan to equalise this with the National Living Wage; a fair prospect yet one beset with trade-offs. Certainly, it is unfair that someone aged 20 can legally be paid less than colleagues one year older, yet wage policy does not operate in a vacuum and changes to the law will in turn lead to employers reacting, shaping the labour market in favour of those younger workers who are already in employment, yet equally pricing out young people in search of work. This certainly does not aid our NEET problem.
A Modern Public Health Crisis
The key finding in the review conducted by Milburn – largely on why this current NEET problem is distinct from similar issues in the past – is that ill health is now the key driver. This issue is built upon a foundation of poverty and housing instability, rates of which have deteriorated in recent years, helping contribute to worsening health outcomes. The NHS cannot solve this issue that must be confronted at source, yet the health service can do more to prevent health problems, largely mental health problems, becoming participation problems. Mental health is the central issue; with the number of NEETs citing it as their key health problem doubling over the 15 years preceding 2025, when the figure reached 42.6%. Higher levels of anxiety and depression hamper the lives and job prospects of young people and NEETs. The current application system reinforces this problem; an increasingly robotic process where human interaction has been reduced to the absolute minimum, where applications are routinely rejected, largely by AI screening, takes a mental toll.
Since the pandemic, job vacancies have almost halved as firms see the costs and risks of hiring young workers with potential rising. Do not underestimate the significant psychological toll that applying to hundreds of jobs, with minimal human interaction, and being routinely rejected by a generic “we regret to inform you” email has on young people, knocking their confidence to a significant degree. While this has in no way caused the health crisis hampering NEETs in the UK, it has worsened its effect, specifically regarding graduates. Anxiety fuelling social media, growing economic pressure, for example in the housing market, and the COVID-19 pandemic have all contributed to growing rates of inhibiting mental health problems, alongside a greater awareness and destigmatisation of the issue. Every generation faces challenges. This significant issue facing Britain’s youth – and more widely the British economy – should not be dismissed due to the stigma of the past. To get Britain’s youth into fulfilling, productive employment, this issue must be dealt with.
A Sense of Expectancy
Milburn condemns in the strongest terms this example of state failure, describing the potential for a “lost generation” and the devastating impact that would have on Britain, but more importantly, these 1 million lives. In using such declinist rhetoric – rightly in this context – Milburn's review captured significant national media attention, was immediately debated in the House of Commons and has captured the minds of policy makers. What this has done is instil expectation across Westminster, and nationally, for significant shifts in policy on this issue. As Milburn suggests, this is not an issue that can be kicked down the road any longer, and the fresh Labour government must act on this issue.
There are signs that the Burnham government has the propensity to confront significant, structural issues that innumerable past governments considered too large to tackle. Distinct from the Starmer government that immediately delayed looking at social care upon taking office, Burnham has made this titanic, decades-old problem a top priority. Equally, Burnham has pledged to confront regional inequality and trickle-down economics. Upon seeing the limitations of a government hamstrung by cautiousness, some would say political cowardice, Burnham has started ambitiously. He has routinely taken aim at the big, structural issues that have been left by past prime ministers due to their perceived intractability. Solving the NEET crisis should join this growing list of neglected issues for Burnham to tackle. This list, however, is growing at quite the rate.
At present, we only have Milburn’s description and diagnosis of the NEET problem. How the bottom rungs of the ladder have been removed for young people is clear. Yet we must wait until autumn this year for Milburn's policy suggestions on how to make employment more accessible for Britain's youth. Perhaps this will coincide neatly with Burnham’s first Labour conference as leader in late September. Regardless, when Milburn's policy suggestions are released, Labour must act. This issue has been left to grow into a crisis for too long, and Burnham seemingly has the appetite to tackle it. Yet question marks grow as Labour continues to commit to such huge, costly projects. The combination of expectation of change forged by Milburn, and the Burnham government's tendency to confront the big, neglected issues of British politics suggests that Britain’s NEET problem could finally be addressed. There is worry, however, that Burnham’s ambitious agenda could lead to the NEET agenda being lost in the weeds of governance. A problem of this magnitude deserves a central place in any future Labour manifesto. On Burnham's current trajectory, however, a potential NEET-sized slice of Labour's new political agenda risks being overshadowed once more.