A bold, broad interim report from Milburn Review sets the stage for Government action, but fiscal and coordination challenges lie ahead

The Milburn Review interim report, published today (Thursday), has accurately explained the complex drivers behind the UK’s close to one million 16- to 24-year-olds not in education, employment or training (NEET).

Rising ill health, limited vocational education, a hands-off benefits system, and a weak labour market are all identified in the report as key drivers of the UK’s NEET rate — the third highest rate when compared with the 22 OECD-member EU countries.

The interim report argues that there is a moral as well as economic case for action to reduce the UK’s NEETs rate. That view is reinforced by recent Resolution Foundation research revealing the long-term scarring effects of being NEET during young adulthood: this group are more likely to be unemployed 10 years later than their non-NEET peers, and on average earn less 20 years on than those who transitioned to adult life with greater ease.

But tackling the UK’s NEETs crisis will not come cheap. Countries with low NEET rates such as the Netherlands and Germany spend significantly more on employment support and active labour market policies than the UK. In addition, a comprehensive programme to reduce the number of NEETs in the UK will require coordination across multiple government departments as well as central, regional and local government.

Lindsay Judge, Research Director at the Resolution Foundation said:

‘’It is encouraging to see how strongly the Milburn Review’s interim report recognises the gravity of the UK’s NEETs crisis. Our ambition should be that the UK becomes one of Europe’s lowest NEET countries rather than one of its highest.

‘’The report has grasped the key drivers of the UK’s high NEET rate, and the steps needed to tackle these: more engaged employment support, early intervention on mental health, and a greater focus on further education.

‘’But there are real fiscal and structural challenges ahead. There is no single system currently in place to solve this crisis, so the Government will need to develop a new approach that spans government departments as well as regional and local authorities, plus find the funding to truly turn the NEETs crisis around.”