The government spends 25 times as much on benefits for young people than it does on supporting them into work, according to Alan Milburn, the author of a major review into youth inactivity. Former minister Milburn called this 'shameful' and, with nearly a million young people not in work, training or education (Neets), declared a complete 'system reset' is needed.
In an exclusive interview with Sunday with Laura Kuenssberg, Milburn said it was absolutely essential Labour reformed the welfare system, even though the government had shelved some planned benefit reforms in the face of opposition from their own MPs. The first part of his government-commissioned report will be published this week.
Milburn's calculations are based on spending for 16 to 24-year-olds in core employment programmes funded by the Department for Work and Pensions and Jobcentre Plus, versus spending on key benefits like Universal Credit, Job Seekers' Allowance, PIP, and Disability Living Allowance. The full methodology will appear in the report later this week.
The former Labour health secretary under Tony Blair was asked by the government to investigate why so many young people were not working, studying, or training - the highest level in over a decade. There were 957,000 Neet young people in the UK from October to December 2025, equivalent to 12.8% of that age group, according to the Office for National Statistics (February). More than half were economically inactive, not even looking for work.
Milburn's initial report, out this week, will conclude the problem stems from widespread state failure. 'This is a failure of the welfare system, but it's a failure of the school system, the skills system, the health system,' he told the programme. 'We're not prioritising getting young people into a situation where they can be learning or earning and instead we're transporting them into the world of benefits with incalculable costs for their life chances.'
He highlighted a central finding: the disparity between money spent on supporting young people on benefits versus state-funded employment programmes. 'What is shameful is that for every £25 we spend keeping young people on benefits, we spend only a pound helping them get into work through employment support,' he said.
Milburn's main recommendations will come later this year, but he insisted there must be a system reset, including benefit reform. Addressing nervous Labour MPs, he said: 'Labour is what it says on the tin. It's the party of work. Work gives purpose. Work gives income. Work gives meaning.' He added: 'Welfare reform is absolutely essential and needs to be done. But it's got to be within the context of a wider set of reforms to state institutions.'
The report will also highlight rising mental health problems among young people, but Milburn argued such diagnoses should not mean they aren't expected or encouraged into the workplace. He noted fewer part-time jobs exist, recalling being sacked from a paper round at age 13 in Newcastle because, like 'all adolescent boys,' he couldn't get out of bed. 'It's the only time in my life so far, anyway, I've ever been sacked from anything,' he said. But he learned about 'effort and reward.' Nowadays, he said, '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.'