2nd November 2026
Britain faces a growing challenge over the number of young people who are neither working nor in education or training. Almost one million people aged 16 to 24 are now classified as NEET, raising questions about the effectiveness of the education system, welfare support, mental health services and, importantly, the willingness and ability of employers to take on inexperienced young workers.
The Government has commissioned two significant reviews which could reshape the way young people are supported. The Timms Review is examining Personal Independence Payment (PIP), while former Health Secretary Alan Milburn has been investigating why so many young people are becoming detached from education and employment.
Both reviews could lead to substantial changes in the coming years. However, there is an important question which risks being overlooked. Is Britain creating enough jobs for the young people it wants to move into employment?
There is little point in encouraging thousands of young people to seek work if employers are simultaneously becoming more reluctant to recruit them.
Nearly one million young people outside work and education
The latest Office for National Statistics figures show that an estimated 981,000 people aged 16 to 24 were not in education, employment or training during April to June 2026. That represented 13% of the entire age group.
The figure had increased by 30,000 compared with the same period a year earlier, although it had fallen slightly from the previous quarter.
More concerning is the composition of the figures. Of the 981,000 young people classified as NEET, approximately 393,000 were unemployed and looking for work. The remaining 588,000 were economically inactive, meaning they were neither working nor actively seeking employment.
In other words, around 60% of young people classified as NEET were outside the labour market altogether.
The distinction is important because the Government is dealing with several different problems. Some young people cannot find employment despite actively looking. Others have become disconnected from education and work because of health problems, disability, family circumstances or a lack of confidence and opportunities.
The ONS figures also require some caution because estimates for smaller population groups can be volatile. Nevertheless, the overall scale of the problem is difficult to ignore.
Mental health and disability are increasingly important
One of the concerns highlighted by the Milburn Review is the growing number of young people experiencing mental health difficulties and neurodevelopmental conditions, including anxiety, depression, autism and ADHD.
The reasons are complicated. Some young people struggle with the transition from school into employment. Others experience difficulties with conventional education, social interaction or working environments.
There is also concern that young people can spend considerable periods moving between different public services without receiving the coordinated support they need.
The problem is not necessarily that these young people do not want to work. Many would like employment but need assistance, appropriate training, flexible working arrangements or access to healthcare before they can make that transition.
Alan Milburn's interim report argued that Britain has failed to develop an effective system connecting education, health, welfare and employment.
It also warned that young people who become detached from employment early in life can suffer long-term consequences, including lower lifetime earnings, poorer health and greater dependence on public support.
The economic consequences extend beyond the individual. Lost earnings mean less income tax and National Insurance, reduced consumer spending and potentially higher welfare and health expenditure.
The Government's own review has estimated the wider economic cost of youth disengagement at around £125 billion annually.
The Timms Review and the future of disability benefits
The Timms Review is examining whether Personal Independence Payment is still suitable for the needs of disabled people and those with long-term health conditions.
Its interim findings identified significant problems with the existing system, including complicated assessments, difficulties recognising fluctuating conditions and the experience of claimants who feel they are not properly understood.
An important distinction needs to be made here. PIP is not an unemployment benefit. It helps people meet the additional costs associated with disability, whether they are working or not.
Consequently, receiving PIP does not mean someone is unable to work.
The review's emerging recommendations have been tested with disabled people and organisations representing them. Its co-chairs confirmed on 29 October that the evidence-gathering and consultation stages had concluded and that final recommendations were being prepared.
The intention is to publish the final report during autumn 2026.
The wider question is whether the benefit system can provide appropriate financial support while also helping those who are capable of working to participate in employment.
There must also be safeguards for people whose disabilities or health conditions mean that employment is not a realistic prospect.
A system which simply pressures everyone towards employment without considering individual circumstances would be unlikely to succeed.
Milburn's review could lead to a much wider overhaul
Alan Milburn's final report is expected to go further than simply recommending changes to benefit assessments.
Its proposals are expected to address the way young people move from school into employment, the availability of apprenticeships, access to mental health services and the responsibilities of local authorities and employers.
Reports ahead of publication suggest a stronger role for local and regional organisations, with more responsibility for coordinating support and helping young people into work.
There has also been discussion of a more structured participation system, offering young people access to employment, training or apprenticeships, alongside an expectation that they engage with the opportunities available.
One proposal is to provide more intensive support for young people with health difficulties, including personalised health and participation plans.
There is also a difficult financial question. Milburn has argued that additional investment in employment support is necessary if the Government wants to reduce long-term welfare expenditure.
This means spending more initially in the hope of achieving savings through higher employment and earnings in future.
Such an approach requires patience. It is unlikely that significant reductions in benefit spending will appear immediately.
The final Milburn report is expected in November, with the Government then having to decide which recommendations it can afford to implement.
The missing jobs: employers are becoming more cautious
While much of the discussion concentrates on preparing young people for employment, there is another side to the problem.
Employers must actually have jobs available and be willing to recruit people with limited experience.
The cost of employing staff has increased, and businesses are having to consider higher wages, National Insurance contributions, pension costs, training and other employment obligations.
Employer National Insurance increased from 13.8% to 15% in April 2025. At the same time, the threshold at which employers begin paying contributions fell from £9,100 to £5,000 annually.
The Government increased the Employment Allowance from £5,000 to £10,500, helping many smaller employers offset some of the additional cost. However, the overall changes have still increased employment costs for many businesses.
There is an important age-related qualification. Employers generally do not pay the standard secondary National Insurance contribution on earnings below the higher threshold applying to employees under 21. Therefore, the full impact of the increase does not apply equally to all younger workers.
Minimum wages have also increased.
From April 2026, the National Living Wage for workers aged 21 and over is £12.71 an hour. The minimum rate for those aged 18 to 20 is £10.85, while the rate for under-18s and eligible apprentices is £8.
These increases benefit young workers who obtain employment, but employers must consider the additional cost when deciding whether to recruit.
For a business with a limited number of vacancies, an experienced applicant who requires little training may appear a safer investment than someone entering employment for the first time.
That does not mean employers are necessarily opposed to recruiting young people. It means they have to consider the commercial implications.
Employers are providing some uncomfortable evidence
A CBI/Pertemps Employment Trends Survey published on 13 October 2026 provides some useful evidence of the difficulties.
Only 15% of businesses surveyed said they were confident about hiring, compared with 24% in 2025.
The survey found that 73% regarded labour costs as a major threat to competitiveness.
More specifically, 44% said rising recruitment and onboarding costs were pushing them towards employing experienced workers rather than young recruits.
Another 45% said they did not have sufficient demand to justify creating additional entry-level positions.
Perhaps most concerning for the future workforce, 53% said wider cost pressures meant they were offering fewer apprenticeships than they would like.
These are findings from an employer survey rather than proof that National Insurance or minimum wage increases alone caused the recruitment difficulties. Weak demand, economic uncertainty and other regulatory costs also influence decisions.
Nevertheless, the findings illustrate the difficulty facing policymakers.
The Government wants employers to provide more opportunities for inexperienced workers, while businesses are reporting that the costs and risks of recruitment are making them more cautious.
It is a contradiction which needs to be addressed.
Are minimum wages and National Insurance discouraging recruitment?
There is a legitimate debate about the balance between decent wages and the cost of creating jobs.
Increasing minimum wages improves the income of people already in employment. That is important, particularly when household bills remain high.
However, there can be consequences if the total cost of employing someone rises faster than a business's ability to increase productivity or sales.
A small employer considering an additional member of staff has to calculate the total cost, not simply the hourly wage.
For an inexperienced young person, there may also be training and supervision costs before they become fully productive.
If the business is uncertain about future orders or customer demand, it may decide not to recruit at all.
There is a danger that young people become caught between two difficulties: they need employment to gain experience, but employers increasingly want experience before offering employment.
This is particularly problematic for school leavers and those who have been unemployed for several months.
The Government needs to examine whether its tax and employment policies are having unintended consequences for entry-level recruitment.
What is the Government already doing?
There are already some programmes intended to address the problem.
The Youth Guarantee includes opportunities for employment, training, apprenticeships and further education.
The Government has also introduced a Youth Jobs Grant, offering employers up to £3,000 for recruiting eligible 18-to-24-year-olds who have been claiming Universal Credit and looking for work for at least six months.
A Jobs Guarantee scheme is also being rolled out. It aims to provide more than 90,000 fully funded six-month jobs by 2029 for eligible young people aged 18 to 24 who have been claiming Universal Credit and looking for work for 18 months.
These initiatives could help, particularly for young people who have struggled to secure their first job.
However, there is a question about whether temporary subsidies and employment programmes can overcome the wider reluctance of businesses to expand their workforces.
A subsidised job may provide valuable experience, but the real test is whether the employer retains the individual when the subsidy ends.
There also needs to be a greater emphasis on apprenticeships and vocational training. Young people should not be expected to follow an academic route if their strengths and interests lie elsewhere.
Scotland and rural communities face additional difficulties
The national figures also have implications for Scotland, although the ONS does not publish directly comparable NEET estimates for individual local authority areas.
In rural communities such as Caithness and Sutherland, the challenges can be particularly difficult.
The range of available employers is smaller, public transport can restrict access to work, and young people may have to travel considerable distances to find suitable employment.
A young person in Wick or Thurso who cannot find a job locally may have to consider moving elsewhere.
Small businesses also have less capacity than larger organisations to provide extensive training and supervision.
The answer cannot simply be to introduce a national employment programme and expect it to work equally well in every part of Britain.
Local authorities, colleges, employers and training providers need to work together to identify the opportunities that actually exist in their areas.
There is also a strong economic argument for developing local apprenticeships and vocational routes linked to sectors such as engineering, construction, energy, healthcare, digital services and tourism.
Keeping young people in their communities requires more than telling them to become economically active. It requires viable local employment opportunities.
The Government needs to address both sides of the equation
There are two separate but connected challenges.
The first is helping young people become ready for employment. This means improving education, providing appropriate mental health support, offering practical training and ensuring disability does not automatically become a barrier to work.
The second is ensuring that employers have sufficient confidence and financial capacity to recruit.
That could involve reviewing the incentives available for taking on inexperienced workers, simplifying apprenticeship arrangements and considering whether targeted reductions in employment costs could encourage additional recruitment.
There is also a case for examining the effect of tax and employment legislation on entry-level jobs before introducing further changes.
The CBI survey suggests that employers are already becoming more cautious. The Government should take that evidence seriously while also recognising that businesses have responsibilities to provide fair wages and decent working conditions.
Neither side of the equation can be ignored.
A long-term problem needs more than another short-term scheme
Britain has introduced numerous youth employment initiatives over the years. Some have helped individuals, but the recurring problem is that programmes often come and go without fundamentally changing the transition from education into work.
The Timms and Milburn reviews provide an opportunity to look at the system as a whole.
However, the Government must avoid measuring success simply by how many people are removed from benefit rolls.
A young person moved from sickness benefits into unemployment has not necessarily made progress. Nor has someone who completes a short-term placement only to return to the same position a few months later.
The real measure should be the number of young people who obtain sustainable employment, develop skills, earn a reasonable income and become less dependent on public support.
There is also a financial reality. Better mental health services, employment support and training require investment. The savings may take years to materialise.
The Government will therefore have to resist the temptation to judge these reforms solely by their immediate effect on public spending.
Britain cannot solve youth unemployment simply by changing the welfare system. It also needs employers who are confident enough to create jobs and give inexperienced young people their first opportunity.
That is the missing part of the debate. Preparing young people for work is essential, but creating the conditions in which businesses are willing and able to employ them is just as important.
The challenge for the Government is to bring the two together before another generation finds itself struggling to get onto the first rung of the employment ladder.
[url=https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment/bulletins/youngpeoplenotineducationemploymentortrainingneet/latest]ONS Young people not in education, employment or training[/url]
Young people and work Milburn interim report
GOV.UK – Timms Review, October 2026 update
Timms Review October 2026 update