‘It is hard not to be pessimistic when you examine the data,’ former health secretary Alan Milburn says in the foreword to his report into young people doing nothing with their lives. That is quite the understatement.
Figures released this morning by the Office for National Statistics show that the number of those classed as not in education, employment or training (Neets) has passed one million – 13.5 per cent of all 16 to 24-year-olds. But Milburn’s review into the crisis suggests we are nowhere near the peak. Forecasting carried out for the report estimates that the rate could hit 16 per cent within five years, meaning more than 1.25 million young Britons would be classed as Neets. Even under the report’s most optimistic scenario, the number was expected to exceed one million – and that threshold has already been crossed this morning.
And all of this is starting to cost us. At current levels, Milburn estimates the cumulative annual cost of having so many young people out of work and education is £125 billion – more than the entire education budget. Had this rot not been allowed to take hold, and had those 18 to 24-year-olds been in full-time work, they could have contributed an additional £38 billion to the economy. Even if progress is made in rescuing some of the young Britons languishing as Neets, they will still likely miss out on nearly £300,000 in lifetime earnings, with every year spent outside work or education knocking around £52,000 off someone’s earning potential.
Milburn estimates the cumulative annual cost of having so many young people out of work and education is £125 billion – more than the entire education budget
But this tragedy is far more human than economic. Wasted youth is becoming wasted life. The longer someone remains outside the workforce, the less likely they are ever to join it. Right now, six in ten Neets have never had a job – up from four in ten two decades ago. This is not primarily a story of people falling out of work; it is a story of people never entering it in the first place.
It is obvious to anyone in the workplace that a major driver of this crisis is society’s growing acceptance of ever-rising levels of mental health diagnoses. The review notes that anxiety and depression, autism and ADHD now account for nearly two thirds of all 16 to 24-year-olds claiming Personal Independence Payment. Before the first lockdown, it was under half. Young people are now far more likely than older generations to claim disability benefits for mental health reasons.
Milburn pains himself to say that these conditions are genuine, and he does not believe in a ‘snowflake’ or ‘soft’ generation. But here perhaps he has gone soft himself. These conditions of course feel real for the young people experiencing them, but what has undeniably changed is our resilience. Before the pandemic, if you felt under the weather, stressed or blue, most people would have been encouraged to get on with it. Parents would have sent their kids with colds to school and workers would have trudged on. That’s not to say this is pleasant, but when eight in ten GPs admit to prescribing antidepressants they do not think are necessary, we surely have to ask ourselves if we are enabling these conditions to flourish when we pretend to be fighting them. And this give-up-and-go-away attitude that we seem to have adopted as a nation is not something that any government can fix – it will have to come from us.
However, government policy can clearly play a role. While it would be daft to say that Labour set this crisis in motion – they clearly did not – it seems inarguable that their approach to our economy has worsened it dramatically. The review – commissioned by Pat McFadden – finally concedes that ‘the cost and regulatory burden of employing young people has risen’.
Not only has Rachel Reeves’s £25 billion national insurance rise piled costs on employers, the minimum wage makes hiring young people less attractive too. Milburn says that employers raised this increased cost burden ‘repeatedly’. And while the report also offers an opposing view, the statistics surely speak for themselves.
Here, really, lies the problem. Introducing the report at a library in Islington this morning, McFadden called it the ‘cause of our times’ that had been ‘ignored for too long’ and ‘observed simply as background noise’. But it has not been ignored. I feel – and I’m sure you do too – that I have been reading about these statistics for the last few years. It has not been a hidden problem; it’s screaming at us in the face.
What use is the government – finally – accepting it as the most important issue of the day if it shows no signs of doing what really needs to be done? The real remedies are too uncomfortable for most MPs to confront. It would mean addressing the perverse incentive structure in our welfare system: the fact that for every £1 spent on employment support for young Britons, £25 is spent on benefits. It would mean recognising that mental health conditions are being overdiagnosed and overtreated when the routine and dignity of a good job would often be more transformative than another prescription.
And it would mean admitting that if, as Milburn concedes, you close the cost gap between giving a young person their first job and hiring a more experienced older worker, employers are obviously going to choose the older worker once the financial incentives for doing otherwise disappear.
There was one glimmer of hope from Milburn this morning. ‘Eighty-four per cent of Neet young people in the Review’s survey said they want to find a job, education or training,’ he said. ‘The challenge is not aspiration – it is opportunity and support.’ But that is precisely what makes this crisis so bleak. The desire to work is still there; what is disappearing is the pathway into work itself as it is replaced by a system that supports dependency.
Milburn’s key warning is that Britain risks creating a lost generation. But that understates the problem. The horrifying truth is that, as his own figures suggest, the generation is already being lost. We will have to wait until later this year for his proposed remedies, but it is hard to feel optimistic about a crisis that now seems already out of our control.
Comments