Britain risks creating a “lost generation” of young people locked out of work and education unless urgent action is taken to improve job opportunities, according to a major government-commissioned review.
Former Labour minister Alan Milburn warned that the number of young people not in education, employment or training could rise to 1.25 million within five years unless the education, welfare and health systems are overhauled.
The review argues that young people are being failed by a “broken system” that no longer prepares them properly for adult working life.
Milburn said the “first rung” of the career ladder had become increasingly difficult to access, with many younger applicants sending out hundreds of applications without receiving replies. The warning comes amid mounting concern over shrinking entry-level opportunities, rising economic inactivity and growing competition for junior roles across retail, hospitality and office-based work.
Young workers face shrinking opportunities
Official figures currently show 957,000 people aged 16 to 24 are classed as not in education, employment or training, often referred to as Neets, equivalent to around one in eight young people.
Milburn warned that figure could rise to one in six by the early 2030s without intervention.
The review blames a combination of declining entry-level jobs, reduced apprenticeship opportunities and barriers within the welfare and education systems. Hospitality and retail businesses, traditionally major providers of first jobs and “Saturday jobs”, have sharply reduced vacancies in recent years.
The report also found that the number of low- and medium-skilled jobs in Britain had fallen by 1.6 million over the past two decades while higher-skilled roles increased significantly. That has created growing pressure on younger workers attempting to enter increasingly competitive labour markets without previous experience.
The chief executive of retail giant Next, Simon Wolfson, said earlier this week that applications per shop vacancy had almost doubled within two years.
Employers urged to rethink entry-level hiring
The review, published on Thursday, recommends stronger incentives for employers to recruit younger workers and provide more structured routes into employment. Milburn argues that many young people want work but are trapped in a “Catch-22” situation where employers demand experience before offering a first opportunity.
“This is not a failure of young people. It is a failure of a system stuck in the past,” he said. “Whether it is education or health or welfare, that system fails to enable their participation in the labour market.”
The review also warned that Britain spends far more supporting young people through welfare payments than helping them into work.
Business groups said the report exposed deep structural problems affecting both employers and younger workers. Rain Newton-Smith, chief executive of business group Confederation of British Industry, said the situation represented “a tragic waste of potential”.
Some employers argue rising labour costs, including higher employer National Insurance contributions and increases to the national minimum wage, have made businesses more cautious about hiring younger staff.
Businesses more selective over junior hiring
Alan Price, chief executive of HR software company BrightHR, told HRreview that younger workers continued to bring valuable skills and fresh thinking into workplaces.
“Young people have a unique set of skills, fresh ideas and energy that add value to the workplace, especially technical skills. Today’s report highlights that young people are keen to work, so it’s vital that opportunities are available for them. That’s where change is needed to ensure employers don’t overlook younger workers when making hiring decisions.”
Price said rising employment costs and artificial intelligence were combining to make entry-level recruitment less attractive for some businesses.
“Recent legislative changes and advances in AI have created almost a perfect storm. Increases to national minimum wage and employer NIC make it less appealing to hire people with little or no experience. And the government’s proposal to remove age bandings for NMW will only increase this, you’re less likely to hire a 17-year-old w/no experience if you have to pay them the same as, for example, a 21-year-old with 4 years’ experience.”
Kate Palmer, chief operating officer at employment law and HR consultancy Peninsula, said employers were becoming increasingly cautious about recruitment.
“The Milburn report reflects what we are seeing and hearing from our clients every day,” she told HRreview. “Increased financial and operational pressures on employers as well as changes to national minimum wage, NICs and the Employment Rights Act mean that many are having to cut roles and look closely at recruitment.”
She said employers increasingly viewed experienced candidates as lower-risk hires.
“Unfortunately, this has a knock-on effect on entry-level roles as employers look to hire people with experience, a ‘safer bet’ if you like. This means young people, those entering the workforce for the first time or coming back to work after a break may find it more difficult to secure roles that were previously available.”
The government said further proposals to address the crisis would follow in Milburn’s final report later this year.
William Furney is a Managing Editor at Black and White Trading Ltd based in Kingston upon Hull, UK. He is a prolific author and contributor at Workplace Wellbeing Professional, with over 127 published posts covering HR, employee engagement, and workplace wellbeing topics. His writing focuses on contemporary employment issues including pension schemes, employee health, financial struggles affecting workers, and broader workplace trends.
- William Furney
- William Furney
- William Furney
- William Furney
