UK Spends 25x More on Youth Benefits Than on Getting Young People Into Work

The BBC reported Sunday that a government-commissioned youth inactivity review has found the UK spends 25 times more keeping young people on welfare than it does helping them enter employment. Former minister Alan Milburn, author of the review, called the imbalance “shameful” and said a complete overhaul of state institutions was urgently needed.

A Stark Spending Imbalance

Milburn’s calculations compare spending on 16 to 24-year-olds in core Department for Work and Pensions employment programmes against expenditure on key benefits. Those benefits include Universal Credit, Jobseeker’s Allowance, Personal Independence Payment, and Disability Living Allowance. For every pound directed toward helping young people find work, £25 goes toward keeping them on support payments. The full methodology is set to accompany the first part of the report, due for publication this week.

Nearly a Million Young People Locked Out

The scale of the problem is significant. Office for National Statistics data released in February showed 957,000 young people in the UK were classified as not in employment, education, or training between October and December 2025. That figure represents 12.8% of that age group and marks the highest level in over a decade. More than half were deemed economically inactive, meaning they were not actively seeking work at all.

Background: A Decade of Decline

Youth employment at entry level has been deteriorating for roughly 25 years, according to Milburn. He argued that starter roles, traditionally the first rung for young workers, have largely disappeared. He also acknowledged a genuine rise in mental health challenges among young people but maintained that such difficulties should not exempt them from being encouraged toward work or training. His broader recommendations are expected later in 2026.

Labour’s Reform Dilemma

Milburn directed pointed remarks at Labour MPs who have resisted welfare reform. He described the party as inherently tied to the value of work and said reform of the benefits system was “absolutely essential.” The government had previously pulled back on some planned welfare changes following internal parliamentary opposition. Milburn framed his call for reform within a wider institutional context, arguing the failures stretched across the welfare, education, skills, and health systems simultaneously.

James Reed, chief executive of recruitment group Reed, added that the lack of response young applicants receive, sometimes after sending hundreds of applications, compounded the problem significantly.

Read Next: What the Fed’s Rate Pause Means for Global Markets