"Crisis of opportunity": Independent investigation to be launched to tackle NEETs and rising youth inactivity

An independent investigation will be launched to tackle the persistently high numbers of young people out of work, education and training, which ministers have warned is a “crisis of opportunity”, the Government has announced. But one HR expert warned this isn’t a crisis of opportunity, “it’s a crisis of listening”, while business owners said the problem has not been helped by the AI revolution and the current government "taxing entrepreneurship into the ground".

Led by former Health Secretary Alan Milburn, the Derpartment for Work and Pensions probe will examine why increasing numbers of young people are falling out of work or education before their careers have begun—with a particular focus on the impact of mental health conditions and disability. 

It comes as nearly one million young people—approximately one in eight young people aged 16 to 24—are currently not in education, employment, or training (NEET). 

Over a quarter of NEET young people now cite long-term sickness or disability as a barrier to participation, compared to just 12% in 2013/14.

Further to this, the number of young people claiming UC health and Employment Support Allowance has increased by more than 50% in the last five years, with 80% of young people on the UC Health element currently citing mental health reasons or a neurodevelopmental condition among declared health conditions.

The Right Honourable Alan Milburn said: "We cannot stand by and let a generation of young people be consigned to a life without employment or prospects. It’s clear urgent action is needed.

"That’s why with the help of a panel of expert advisors, I will aim to get to the bottom of why current efforts are not preventing young people from becoming trapped out of work and education.

“The review will be uncompromising in exposing failures in employment support, education, skills, health and welfare and will produce far-reaching recommendations for change to enhance opportunities for young people to learn and earn.”

Secretary of State for Work and Pensions, Pat McFadden, said: "The rising number of young people who are not in education, employment or training (NEET) is a crisis of opportunity that demands more action to give them the chance to learn or earn.

"We cannot afford to lose a generation of young people to a life on benefits, with no work prospects and not enough hope.

"I am determined to build a system that supports young people, not just in finding a job, but to build a better future – because when young people succeed, Britain succeeds.

“If we get this right, the prize is huge – transforming lives and life chances, with the pent-up potential of the next generation firing our economy and building a better future for all.”

One job market expert, Kate Underwood, Managing Director at Southampton-based Kate Underwood HR and Training, said we need action, not further investigations: "This isn’t a crisis of opportunity. It’s a crisis of listening. Young people have been shouting for years about the pressure they’re under, the lack of mental health support and a system that doesn’t flex for those with different needs.

"Another investigation might look good on paper and tick boxes, but let’s be honest, if it ends in another glossy PDF telling us what we already know, what’s the point?

“We don’t need more diagnoses, we need decisions and we need action. We know the problems. What we need now are solutions that actually deliver for the young people who need them.”

Colette Mason, AI Consultant at London-based Clever Clogs AI, said AI is not helping the situation: "While the state's investigating why young people can't find work, AI's replacing their entry-level jobs.

"The economy loses new people learning about the world of work firsthand, and steals the opportunity for the UK to boost productivity with AI speed plus human nous. National Insurance hikes make taking a chance on someone new expensive compared to a skilled worker.

"Small businesses and their middle class owners who could take these people on are squished by business and personal taxes, making new starters unemployable.

“If starting a business was more appealing, youngsters could use their tech skills to open up opportunities for themselves. But that's unlikely when we're taxing entrepreneurship into the ground.”

Samuel Mather-Holgate, Independent Financial Adviser at Swindon-based Mather and Murray Financial, welcomed the investigation but said the Government's actions in relation to business haven't helped: "It is positive the government are trying to do something about this, but at the same time they need to realise it's their actions in relation to the economy and business that have created the problem.

"With two weeks left until the Budget, the Chancellor needs to go pro-business as much as she can and get a grip back on driving growth.

“Business rates, national insurance and corporation tax all need to be reduced if she wants to inject new opportunities for NEETs and everyone else wanting to work and contribute to society.”