A government-commissioned review led by former Labour minister Alan Milburn highlights a deepening youth unemployment crisis in the UK, warning of a potential “lost generation” if urgent reforms are not implemented.

The report reveals that more than one million young people aged 16 to 24 are currently not in employment, education, or training (NEET), the highest level since 2013.Without intervention, this figure could rise to one in six young people, or around 1.25 million, by 2031.

The economic cost of youth unemployment is estimated at £125 billion annually, factoring in lost tax revenue alongside increased spending on welfare and healthcare.This figure exceeds national education spending and approaches double the defence budget, underlining the scale of the issue.A major driver identified in the report is the sharp decline in entry-level opportunities.There are now 1.

6 million fewer low- and medium-skilled jobs compared to previous decades, while vacancies in sectors such as hospitality have halved in recent years.Apprenticeships have also dropped significantly, falling by 35 per cent over the past decade.This has created a cycle in which young people struggle to gain work experience, yet employers increasingly demand it.

The review also criticises public spending priorities, noting that for every £25 spent on benefits, only £1 is invested in employment support for young people.Milburn argues that the welfare system currently sustains unemployment rather than helping individuals transition into work.

Additionally, the report links rising economic inactivity to mental health challenges associated with social media use, describing a “bedroom generation” experiencing disrupted sleep, reduced concentration, and increased anxiety.

Milburn concludes that the UK lacks both a coherent system and a strategic plan to address the crisis, warning of a growing generational divide if action is delayed.