Britain is facing a generational crisis as a million young people are not in education, employment, or training (Neet), according to a new review by former Labour minister Alan Milburn. The review highlights that the country's failure to invest in public services early has led to a state in 'firefighting mode', spending vast sums on consequences rather than prevention.
The scale of the Neet crisis
The review reveals that the cost of the Neet crisis to the economy and government finances is £125bn a year and rising. Only one in four young people believe that everyone in society has a fair chance, with most thinking the game is rigged. This generation, which grew up during the post-2008 crash austerity years and the Covid pandemic, faces a stark reality: the public services their parents enjoyed are gone, living costs are rising, and the AI revolution is changing everything.
Milburn's review traces the risk of a child becoming Neet back to their earliest years in preschool. Over the past 16 years, funding for youth services in England has been cut by 76%, a loss of £1.3bn, leading to the closure of thousands of youth clubs and the loss of social workers. Per-pupil school spending was frozen for 14 years, and investment in school buildings collapsed by a quarter, with many affected by the Raac (crumbling concrete) crisis.
The cost of neglect
The state now spends £25 on benefits for every £1 on employment support for young people. This imbalance is set to worsen without intervention. The Sure Start program is a cautionary tale: when the Conservatives scrapped the network of family hubs, spending on looked-after children and safeguarding rose by more than half, shifting support from prevention to crisis management.
Andy Burnham, the mayor of Greater Manchester, is tasked with rebuilding a 'preventive state', a model that invests in the foundations of society. The economic, fiscal, and social prize would be substantial.
Prevention pays off
The NHS provides a clear example: 40% of its budget goes towards treating preventable conditions, accounting for half of GP appointments and 70% of inpatient hospital bed days. Research by the Health Foundation shows that restoring the UK's population health to 2014 levels would boost GDP by 2% and generate a £72bn dividend for public finances.
The Office for Budget Responsibility estimates that in a 'better health' scenario, the national debt could be about 45% of GDP lower by the 2070s. Getting more young people into work would revitalise life chances and drive up labour participation, boosting the economy and public finances.
Challenges ahead
Building a preventive state is challenging for a prime minister constrained by tight fiscal conditions and in a hurry to show progress. Moving money upstream is difficult because savings take time to materialise, while spending on acute need and welfare cannot be turned off. The Treasury is often sceptical because costs appear immediately, while savings arrive years later, often benefiting a different government.
However, refusing to make the transition is a bad choice. Britain is already paying the price of a crumbling NHS, rising welfare bills, jobs market inactivity, and weak economic growth. Milburn's review is a critical test of whether Britain will rebuild a preventive state from the ashes of austerity, or settle for a country hamstrung by the costs of failure.
