A significant disparity exists in government spending, with "shameful" amounts allocated to benefits for young people compared to the resources dedicated to helping them find employment, according to former minister Alan Milburn.
In an exclusive interview with BBC's Sunday with Laura Kuenssberg, Milburn stated that with nearly a million young people currently not in work, training, or education (Neets), a comprehensive "system reset" is urgently required. He emphasized that Labour must reform the welfare system, even as the current government has reportedly shelved some planned benefit reforms due to opposition from its own Members of Parliament.
The first part of Milburn's government-commissioned report on youth inactivity is slated for publication this week, with the full methodology to follow. His calculations for employment program spending focus on 16 to 24-year-olds participating in core programs funded by the Department for Work and Pensions and Jobcentre Plus. Conversely, welfare spending is based on outlays for key benefits such as Universal Credit, Job Seekers' Allowance, Personal Independence Payment (Pip), and Disability Living Allowance.
Milburn, who served as the former Labour health secretary under Tony Blair, was tasked by the government to investigate the reasons behind the high levels of youth inactivity, which have reached their highest point in over a decade. Figures released in February by the Office for National Statistics indicated that from October to December 2025, there were 957,000 Neet individuals in the UK, representing 12.8% of the age group. More than half of these young people were classified as economically inactive, meaning they were not seeking employment.
Milburn's initial report is expected to conclude that the problem stems from a widespread failure across state institutions. "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 told the BBC. He added that the current approach prioritizes moving young people towards benefits rather than learning or earning opportunities, with "incalculable costs for their life chances."
He highlighted a critical finding from his review concerning the imbalance between funds for supporting young people on benefits and those allocated to state-funded employment 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 stated.
While Milburn's main recommendations for addressing youth inactivity will be detailed later this year, he stressed the necessity of a system reset that includes welfare reform. Addressing potential concerns within the Labour Party regarding welfare changes, he asserted, "Labour is what it says on the tin. It's the party of work. Work gives purpose. Work gives income. Work gives meaning."
He reiterated that "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."
Furthermore, Milburn's report will examine the obstacles young people encounter when trying to enter the workforce, acknowledging the reality of increasing mental health challenges. However, he will argue that such diagnoses should not preclude expectations or encouragement for young people to engage in the workplace.
Reflecting on his own experience, Milburn noted a decline in part-time jobs available for young individuals. He recalled being dismissed from his first job at age 13 for not delivering papers, humorously remarking it was the only time he had ever been sacked. "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," he observed. "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.
