A “catastrophic system failure” is leaving young people “abandoned” to a life on welfare, a landmark report will reportedly conclude, as figures show seven in ten of those in receipt of health and disability benefits still make claims a decade later.
Alan Milburn, the former Labour health secretary who is leading a review of youth unemployment for the government, will publish an interim report into the issue this week.
It comes after the most recent figures showed 12.8 per cent of all people aged 16 to 24 in the UK were not in education, employment or training (Neet) in October to December 2025. The total number of Neets was 957,000, the Office for National Statistics said.
According to The Times, the review will conclude that the current system offers little to no incentives to help young people back into work, with just £1 spent on employment support for every £25 spent on benefits.
It is expected to say that young people are trapped on benefits, despite research indicating that around 50 per cent believe they could work with the right support.
The review reportedly shows that those aged 16 to 24 who are in receipt of PIP, the main disability benefit, become less likely to be in work as they get older. By the age of 24, only one in four recipients of PIP were in work.
Mr Milburn’s report also reportedly sets out that some disabled young people will never be able to work, arguing that benefits must always be available to support them.
But the report also points out that those who want to return to work can be disincentivised by cliff edges in the system which means they could lose as much as £2,000 a month in support.
The report states: “There is almost no intermediate step — no gradual build-up, no trial period that genuinely removes the fear of losing everything if a job does not work out.
“The welfare system presents young people with a perverse choice. For a young person with a health condition, the pathway to inactivity can offer higher income, less hassle and lower risk than trying to find work.”
It adds: “The problem isn’t that young people aren’t being chased enough — it’s that the system abandons them entirely, and that abandonment exacts a cost in lost income and life chances.
“This is a catastrophic system failure. More young people are getting trapped on benefits when the overwhelming majority of them want to work. Today’s welfare system is scarring their life chances. We have the worst of all worlds — worse outcomes but higher costs. It has to be reformed.”
It comes just days after the former Labour Cabinet minister told the BBC the state has failed young people in a “shameful” way by “transporting them into the world of benefits” rather than helping them find work.
“For every £25 that we spend keeping young people on benefits, we spend only £1 helping them get into work through employment support.”
He added: “This is a failure of the welfare system, but it’s a failure – I’m sorry – of the school system, the skills system, the health system.”
Ministers hope more sector-based work academy programmes (Swaps) can help address the problem.
Analysis by the Department for Work and Pensions suggests young people who do a Swap placement are 13 per cent more likely to be in work two years later than counterparts who did not do one, with four-in-10 in sustained employment within six months.
