The Numbers and Drivers Behind Milburn’s Young People and Work Interim Report

The highly anticipated Young People and Work Interim Report (the Milburn Interim review) has been released. This is a beast of a document (it is 217 pages). It highlights some major drivers for Government to look at the NEET challenge… one of which is the £125 Billion Annual cost of NEETs, it looks at the challenge from many angles, different department perspectives, it also shares some real home truths for the Sector to take on board and reflect to improve our service and provision to young people (but also to employers). Milburn highlights a whole-system failure for young people… and a home truth that ‘The Post 16 System is confused, fragmented and designed around institutional convenience’.. not designed for the learner… nor the employer. Which is true! We are at a fork in the road, what happens next is massively significant for young people, employers, the country and the future of the FE and Skills sector.

The Young People and Work interim report (not the sexiest of titles), is a beast of a document (it is 217 pages). There’s been a lot of noise and anticipation.. inside and in the main stream media, even the printer I visited yesterday was talking about it… and rightly so. There is a lot to take in. We’ve got a sector reaction piece with over 20 leaders’ views and Dan has put together a Deep Dive that people have found genuinely useful… but I wanted to look at the numbers and drivers myself… because a few things jumped out that I haven’t seen others pick up on… and what is working, what is not and how we can improve, as one major finding is total system failure for young people.

217 pages is a comprehensive report. Milburn has been really honest, really robust… looking at the good and the gaps in provision. So I wanted to look at the numbers and drivers myself. There is so much in there that real nuggets could easily be overlooked… and in honesty, most people won’t have read the entire thing. They’ll have heard someone else’s take, or chucked it through an LLM… and that amount of data and constant evidence referencing? Most Gen AI will struggle with it. So I went full ADHD last night, broke out the personal power tools, and pulled out the things I think are interesting and not getting enough airtime.

The Political Significance of 1 Million NEETs

As for me, the biggest driver of all for the review by the Government is the cost of NEETs. The same day the Young People and Work report came out, so did the latest ONS NEET figures and we have 1,012,000 NEETs. That is a major political significance! Driver 1.. is a Million NEETs! To be fair, Milburn has been looking at this for a while, and my life, what a detailed review, it is 217 pages of evidence so far!

The Cost of NEETs, this isn’t just a moral issue… but NEETs cost £125 Billion per year!

Each NEET is a person. That has a knock-on impact on families, communities… these are people, not just numbers, this is potential wasted… frustrated. But the Government is actively looking at the Welfare Bill, and when you look at the numbers, you can understand why. NEETs, cost £125 Billion per year! That is more than the UK spends on education every year!

Add this together with the cost of Economic Inactivity due to ill health… at £212 Billion per year. Quick Gavin Maths… that is nearly £340 Billion! That is a huge amount of money, every year. We covered the drivers on Keep Britain Working (aka the Mayfield Review) … and yeah, I know Mayfield and Milburn sound similar, but it is different! So back in November 2025 Keep Britain Working’s driver was £212 Billion cost of Economic Inactivity due to ill Health… back then that was around 7% GDP. Like a massive, unsustainable amount of money.

Add the fact that if every currently NEET 18-24-year-old had been in full-time work, this would have contributed an additional £38 billion to UK GDP. This is Driver No 2!

So when the massive and maybe the most comprehensive report and looking at an issue from many, many angles… I have seen in nearly 23 years. DWP shared some Young People and Work Report – key statistics…. and I want to share these with you, as my jaw dropped at some of these. These mainly appear to have gone under the radar, and I think they are massively important drivers for the Milburn Review. As there is even an entire section on What the system measures, recognises and rewards… this is important!

Cost of NEETs and Missed Opportunity

• The cumulative annual cost to the country of almost 1 million NEET young people is £125 billion – more than the UK spends on education every year (the ONS released their data on the same day, with now over 1 million NEETs, so is this cost now even higher than the previous 957,000 NEETs.. either way, that is a lot of money!
• On the flip side: If every currently NEET 18-24-year-old had been in full-time work, this would have contributed an additional £38 billion to UK GDP.
• The ceiling for the net average lifetime earnings lost for those who are NEET aged 18-24 but go on to work is almost £300,000 per person.
• Each year spent NEET between 18-24 costs an average £52,000 in lifetime earnings to the individual.
• Of the estimated £8.1 billion spent on young people across key benefits, approximately £4.4 billion goes to NEET young people – and an estimated £3.2 billion could have been avoided if those young people had been in work and earning about the earnings threshold.

Future impact:

• The NEET rate could increase to over 16% – or more than 1.25 million young people within 5 years based on increasing risk factor trends alone. Even in the most optimistic scenario, the number of NEET young people exceeds 1 million (this was announced within a few hours)!
• Around 314,000 18–24 year olds in England are neither in work nor education and are not receiving benefits – the ‘hidden NEETS’. This accounts for nearly half of all NEETs in this age group.
• Of those NEET for less than a year, 65% return to participation the following year. For those out for more than a year, that drops to just 25%.
• 84% of NEET young people in the Review’s survey said they want to find a job, education or training. The challenge is not aspiration – it is opportunity and support.

EU Peers: by 2025, only Romania recorded a higher youth NEET rate among EU countries. A decade ago, the UK rate was close to the EU average.

Labour Market, Work Readiness and Job Opportunities

• 6 in 10 young people who are NEET have never had a job – 20 years ago that figure was closer to 4 in 10.
• Over the past 20 years, the number of mid- and lower-skilled jobs in the economy has fallen by around 1.6 million. Hospitality vacancies have fallen by around half in four years.
• The proportion of 16–17-year-olds doing any paid work has nearly halved, from 35% in 2006 to 19% today.
• Youth unemployment has risen from 9.2% in mid-2022 to 15.8% now – and more than a quarter of a million young people have been unemployed for over six months, the highest figure since early 2015.

NEETs and Apprenticeships

• Apprenticeship starts for 16–24 year olds have fallen by 35% since the Apprenticeship Levy was introduced in 2017. Level 2 starts – the entry-level provision that matters most for young people outside work – have fallen by 68%.
• Only 2% of those currently on apprenticeships were previously NEET – the system is not reaching the young people who need it most.
  
  

PIP, Health, Mental Health, Importance of Autism and ADHD in the figures

• The combined share of anxiety/depression, autism and ADHD as the primary condition for 16–24 year olds claiming PIP has risen from 49% in January 2020 to 64% by January 2026.
• Nearly half of all PIP claims among young people are now for autism and ADHD, compared to less than 1 in 10 for all PIP claimants.
• One in five (20%) of all NEET young people reported mental health as their primary health condition in 2025, more than double the share in 2012 when it stood at 7.7%.

Welfare, costs, allocation… once someone is in the system it is hard to get out!… but many aren’t!

• Only around 1 in 5 NEET young people in England are getting meaningful employment support from the benefit system.
• In 2024/25, for every £1 spent on employment support for young people, around £25 was spent on benefits.
• The number of 16–24 year olds receiving DLA or PIP has risen from around 200,000 in 2012 to over 400,000 today. By 2031/32 this is expected to reach 700,000. The number of young people claiming PIP is expected to quadruple over just 25 years (2012–2037).
• PIP expenditure for 16–24 year olds has risen from £1.3 billion to over £3 billion in five years. Overall UC spend for young people on the health journey has almost doubled from £1.5 billion to £2.1 billion between 2019/20 and 2024/25.
• Of those first claiming a health or disability benefit aged 16–24, 53 per cent remain out of work or education five years later. Fifteen years later, the figure is still 48 per cent.
• A young person first claiming health and disability benefits in 2019 is 34 per cent more likely to be NEET after 5 years than those first claiming in 2010.
• 7 in 10 young people claiming a health and disability benefit are still claiming a decade later. Over only ten years, from 2010 to 2020, the proportion of young people leaving disability benefits within five years dropped by 40 per cent.
• For young people in the LCWRA group (Limited Capability for Work and Work-Related Activity), only 1 in 100 move into work each month, compared to around 1 in 10 for those in the intensive work search group.
• 48,000 young people are waiting for a Work Capability Assessment – yet receive the equivalent of only 1 to 2 minutes of work coach time per week.
• £8.1bn is currently spent on key benefits for young people. Across disability, incapacity and unemployment benefits, BUT, less than half of that spend has any participation support or requirements attached to it.

So you can understand the importance of Milburn’s review, sitting along side Mayfield and Timms welfare reform. Again, back in November 2025 I wrote a Soundbite on Milburn, Mayfield and Timms: Why Are They So Important To The FE, Skills And Employability Sector?  Before we knew the impact and cost of NEETs… £125 Billion a year is huge!

I actually think this is one of the best reports (one of the most detailed too), that I have read in nearly 23 years at FE News. It is huge, it is honest, it looks at the gaps in provision and from many perspectives and angles! So hats off to Milburn and his team.

Milburn Does Some Cracking Systems Thinking

If I gave a running commentary of 217 pages, basically, you’d end up with a 500-page article! No one needs that. So I am picking out some things that ‘popped’ for me and I thought you might find interesting, and maybe outside what others are chatting about at the moment, or looking at the pattern or system. To be fair to Milburn, a cracking bit of systems thinking has been going on here. Like brilliant.

So where to start?

RONI. The importance of SEND and Neuroinclusion on NEETs

24th April we had the Bridging the SEND Transition Collective, the report is due 9th June… but we wanted to do SEND and Neuroinclusion first on a series of collectives… with NEETs next (Breaking Barriers is on Tuesday). It was the right call.

So I see money as the driver for all of this… long term cost saving in particular. So when nearly half of all PIP claims among young people are now for autism and ADHD, compared to less than 1 in 10 for all PIP claimants. This is a driver. Particularly when PIP expenditure for 16–24 year olds has risen from £1.3 billion to over £3 billion in five years!

The report highlights: The risks of becoming NEET are amplified by having an EHCP, being absent or excluded from school.

In Milburn’s Young People and Work, Disability Rights UK shared that “Despite comprising less than 20% of the school population, SEND students account for 45% of all suspensions and 52% of permanent exclusions. This means a Disabled pupil is three times more likely to be suspended than their non-disabled peers.” Evidence from England also shows that autistic children are twice as likely to be excluded, whilst evidence from Scotland, highlights that children with ADHD are 6 times more likely to be excluded and over twice as likely to leave school before age 16. Maybe this is a driver for the major interest in SEND from the Government!

The pipeline of risk is not shrinking. It is growing

However, the report highlights. The pipeline of risk is not shrinking. It is growing. Almost a quarter of children aged 11 to 16 had a probable mental health disorder in 2023, up from almost one in seven in 2017. In 2024/25, nearly one in five pupils were persistently absent. Almost one in seven receive special educational needs support. Almost one in six children aged 10 to 14 are classified as disabled, up from one in ten in 2019/20. Learning difficulties and autism are growing significantly faster than mental health conditions as the primary health conditions among NEET young people.

The impact of SEND or lack of SEND and neuro-inclusion support is massive!

RONI

…and RONI… the Risk Of NEET Indicator. This could be really interesting to see how it develops, especially with new tools, AI and automation. Early identification, done well, could be a game changer. Maybe we could call the RONI bot Reggy?

Young people don’t feel work ready, and school doesn’t prepare them for Work

Now we know this, school doesn’t prepare young people for the world of work, but this report makes it ultra clear, it doesn’t pull any punches! . Only 47 per cent of 18- to 24-year-olds, and just 36 per cent of those who are NEET, agreed that they felt ready for work when they left education.

Point 354 in the report highlighted: Less than half of young people agree that their place of study sufficiently supported them to develop the skills they need for the future. Students with additional needs report worse than average on this measure.

The Impact of Careers Advice and Guidance, Work Experience, or lack of it for work readiness in young people

Now I have been banging on about the importance of effective Careers Advice for years, call it a campaign maybe. Finally, I think this is a report that also highlights the massively important role of Careers Advice and Guidance.. and it also highlights the massively important (and well respected Gatsby Benchmarks).

Evidence point 352 states: a lack of adequate careers guidance at schools is an often-cited reason for young people not being prepared for the world of work. How young people have their eyes opened to employment options has changed markedly in recent decades. England’s Careers and Enterprise Company (CEC) was established in 2015 to improve employer-school connections and has supported progress on the Gatsby benchmarks, a framework of 8 guidelines defining world-class career guidance for schools and colleges. Over 90 per cent of schools now benchmark against the framework, meeting 5.8 of 8 benchmarks on average, up from 1.9 in 2018.

The report continues… Where schools achieve more benchmarks, NEET likelihood is reduced. This has been built on a growing digital infrastructure, including the Future Skills Questionnaire completed by over 330,000 learners in 2024/25. CEC (Careers and Enterprise Company) states the highest quality careers provision reduces the likelihood of young people being NEET by 8 per cent (post-16 and post-18) with double the impact for high Free School Meal (FSM) cohorts. This is currently generating £300m in annual fiscal savings through reduced NEET outcomes.. again… saving £300 Million annually, invest in good quality careers advice to long term save!

Start Careers Advice in Primary School

The research shows children start to form ideas about their future as they start primary school, and yet most primaries have no formal careers strategy!

Cool, progress, but… surely Careers Advice and Guidance needs to be more widely funded, encouraged, supported, started earlier… and funded?

Yet, young people don’t know what employers want

Critically, access to high quality careers advice remains deeply unequal. Only 32 per cent of young people reported receiving face-to-face careers advice in 2025. Apprenticeships were discussed with just 18 per cent. Only 49 per cent feel they understand employers’ expectations. Only 35 per cent feel confident they have relevant work experience for employment. Younger people and those with additional needs are less likely to report understanding what employers seek. Guidance is most lacking for those considering vocational pathways, including those at risk of NEET.

Why are Apprenticeships discussed with just 18% of young people as an option? Why do only 32% of young people receive f2f careers advice? Why do 35% of young people feel confident they have relevant work experience for employment.

Work Experience and the long term impact for NEETs

The report highlights: At present, the provision of work experience is an afterthought for many schools. Students are often told to find their own placements. Unsurprisingly, those without strong networks and connections are more likely to miss out. School capacity and local employer willingness are weakest in the areas of highest need. The young people who most need early exposure to work are the least likely to receive it. The vast majority of the young NEET people we spoke to had done no work experience at all. This is a serious amount of ball dropping by schools for work readiness basically!

Schools geared up for Exams and Academic route

Unfortunately, many of the pathways during and after secondary education fail to support young people as they should. Milburn’s report states that the school system is built on young people gaining qualifications which is not the same as ensuring they are ready for work.

With DfE’s recent £6 Million investment in two research centres in Universities, to look at Education policy. It is really important to be thinking and lining this up… what is the purpose and end point of school? As Milburn is highlighting the work readiness, but is this what school is delivering to, or aiming at HE? It is an important question (and I went into it in more detail in Soundbite a few weeks ago).

Milburn continues, schools often push the academic route to university as the most valued route. The focus on qualifications and competition for those most likely to achieve them is often crowding out preparation for jobs and working lives especially for the more disadvantaged. What makes the situation worse is that the skills ‘system’ from 16 upwards is highly fragmented, complex and confusing.

So if DfE’s policy direction of travel is research based, but from researchers based in universities, are they looking at education policy to be work ready, or something else? Does this all line up on every stage of the education journey?

Barrier of English and Maths

Now. Again, how is it that so many young people leave school and can’t pass English and Maths GCSE, schools have been delivering this as the goal and end point for 11 school years? For me, a massive dropped ball that FE and Skills then has to pick up. Especially as Milburn highlights: Requirements for young people in England to achieve Level 2 English and Maths qualifications continue to stop some 16- to 18-year-olds from accessing and progressing into FE and apprenticeship routes.

With only 20.2 per cent of those who had not achieved Level 2 English and maths at 16 had achieved both at 19 in 2023/24. The requirements also further constrain limited FE capacity. The system as currently designed risks locking out a significant minority of young people from taking meaningful steps towards work at a critical age.

FE: the poor relation to HE

Milburn, direct quote: FE is often also the poor relation to higher education. In England funding per student in HE is £9,906 while in FE (for students aged 16-18) it is £7,860.389 The gap has more than halved in the last ten years, from £4,829 in 2015/16 to £2,046 now. But the FE sector still plays second fiddle to HE.

College Funding Restrictions, Risk and Impact on NEETs

Milburn highlights that because colleges are funded for 16–19-year-olds largely based on the previous year’s intake, and in-year growth funding is paid towards the end of the academic year as a contribution towards additional costs, colleges fund growth at their own risk until it is reflected in future allocations. Given funding allocations are reduced for students who fail to complete their course, those at risk of non-completion are financially risky for colleges seeking to grow. These rules also limit college capacity to offer flexible, roll-on provision during the year for NEET young people.

So 16-19 funding needs to change.

Skills Training and the Post 16 Cliff Edge

Wow, this Government loves to use the term Cliff Edge in reports… and the word Reform (surely they realise that is a political rivals name), call it something else people?

The cost of 32,000 unfunded students in England’s FE sector

Milburn highlights that there are currently an estimated 32,000 unfunded students in England’s FE sector. Interestingly, explaining that the institution that serves the young people most likely to become NEET is placed under pressure by a system that doesn’t fund what it currently delivers, never mind what it could deliver. Improving NEET outcomes also depends on the strength and stability of the FE workforce. The learners most at risk of disengagement are those who benefit most from consistent, skilled FE teachers. However, high vacancy rates (3.9 per 100), rapid turnover (c.50 per cent leaving within 5 years) and inconsistent professional development undermine this support. Drivers include uncompetitive pay, workload pressures and limited progression.

FE staff pastoral roles recognised, but also recognised they are eroded if not funded

The report recognises the important wider impact of FE staff on learners: FE staff often perform informal brokerage and pastoral roles that are invisible in policy, but critical for at-risk students. Lecturers act as mentors, employment coaches and referral agents to health and social services. These functions are not funded, not measured and not recognised in accountability frameworks. When college budgets are constrained, as they have been for over a decade, these informal support functions are the first to erode.

Important point underlined… these functions are not measured… not recognised… as a result, not funded! Interesting!

Also. As I stated in Soundbite last week. Great to big up the FE College staff, but where are the insights, recruitment, retention and development data on ITP and Apprenticeship delivery staff (as it is important to recognise that ITPs deliver 70% of all Apprenticeships). So to have a proper picture, we need to included ITP staffing!

ROI on Apprenticeships

You measure what you treasure… and the ROI on Apprenticeships is key on budget worthy decision making. Back in April 2025, AELP’s Ben Rowland wrote about returns on investment on Apprenticeships… I think this has been a major drop the ball for the FE and Skills Sector, we don’t bang on about the ‘benefit’s management’ or ROI of Apprenticeships enough.

Benefit management of Apprenticeships, the report states: For each young person who starts an apprenticeship, the lifetime economic value amounts to £56,000 at Level 2 and £104,000 at Level 3, compared with £54,000 and £67,000 respectively for equivalent classroom-based qualifications. At Level 3, the apprenticeship route delivers more than 50 per cent greater lifetime value than the classroom alternative. Work-based training is shown to be effective in supporting young people into work. The challenge is to help more young people access it.

So, surely, as a sector we need to come together to state this more, regularly and have this as the top of the head and associated with the return on investment on Apprenticeships! We haven’t before, surely, now we must!

Apprenticeship Drop out rates and Reasons under the microscope

One thing I’d say about this report. It is balanced. So after singing the praises and return on Apprenticeships, the report doesn’t pull punches on Apprenticeship Drop out rates and impact:

Quality remains a serious concern. England has comparatively high apprenticeship dropout rates, higher than France, Germany, Ireland and Austria which sit between 20 and 30 per cent. Slightly more than 1 in 3 apprentices fail to achieve their apprenticeship, although this has improved over recent years.

The most common reasons given by non-completers were the apprenticeship being badly run or poorly organised, at 49 per cent, and the training not being as good as hoped, at 46 per cent. 40 per cent of apprentices report not receiving the required off-the-job training. Around a quarter of the apprenticeship budget, an estimated £620 million in 2021/22, was wasted on training for apprenticeships that were not completed.

This is gold, how do we improve perception of Apprenticeships to Government, to learners, to employers… sort out the gaps and problems on the above paragraph!

Let this sink in… 25% of the Apprenticeship budget, £620 Million in 2021/22, was wasted on Apprenticeships that were not completed!

This is a brutal truth… and it needs sorting out!

Another truth is: the Apprenticeship Application System is hard to navigate for students … and I’d add hard for employers!

The Post 16 System is confused, fragmented and designed around institutional convenience

One massive home truth that is hard to hear, but there is a truth to it, like I said, this report pulls no punches: The post-16 landscape is not merely underfunded. It is confused, fragmented and designed around institutional convenience rather than the needs of the young people navigating it. For those with the fewest resources and the most complex needs, it is close to impassable. The system loses young people not because they vanish but because no one is looking.

That is pretty brutal… but if we are brutally honest. It is also true!

So, so much to take in.

Fork in the Road

Milburn talks of a Fork in the Road, and we at one! This is a brilliant report, but it is bang on as well.

There is a lot of data. Much analysis. Many words (217 pages, there is a lot to take in)… But as Milburn concludes, it all boils down to this core conclusion. We have a deeply entrenched problem that is getting worse and a system that has been trying but failing to deal with it. Fundamental and far-reaching reform is needed. The country has reached a point where inaction or iterative tinkering is itself a decision, and a costly one.

So, we are at the fork in the road. Time to look at ourselves, look at solutions and gaps in provision… how to improve, what we need to shout about, what we need to reflect and make better. The timing for Tuesday’s Breaking Barriers / NEET collective couldn’t be better timing.

So a long article, there is so many other things to cover from the report, but these really popped to me, and I haven’t seen anyone else linking it all in this way and I wanted to share it. Hopefully help us state our case, improve, improve our offering… 1 million NEETs, failed… by a system, by us… great provision, brilliant people, so now is the time to share… how can we do a better job if we weren’t shackled, if we had a system that was geared around the learner or the need. Exciting times! But also frightening if we don’t take this chance and don’t get it right.

A million NEETs, costing £125 billion a year. A system designed around institutional convenience rather than young people it serves, or employers! We’re at the fork in the road… and the direction we choose next matters more than any report.

By Gavin O’Meara, CEO and Founder FE News