A report by former Labour Health Minister Alan Milburn suggests that the UK could face a bill exceeding £6 billion to effectively address youth unemployment. This projection is based on the potential implementation of new recommendations designed to get young people back into work, potentially by replicating successful job schemes seen in countries like Germany and Denmark.
The UK currently dedicates approximately 0.1 percent of its GDP, or £3.7 billion annually, to employment support. In contrast, Germany invests 0.3 percent of its GDP, including wage subsidies for workers up to age 29, while Denmark invests 0.4 percent, which also supports 'flexi jobs' for young people with disabilities.
Alan Milburn's report is expected to advocate for investment in support measures rather than benefit cuts. While the exact cost of implementing these recommendations is yet to be finalized, the upfront investment could be substantial, even if it leads to long-term reductions in the welfare bill. The UK has seen a significant rise in young people who are not in employment, education, or training (NEETs), reaching almost one million—the highest level in over a decade. The Resolution Foundation has described this situation as a 'crisis.'
Ministerial discussions around the report's findings are anticipated following the next King's Speech in April, with potential funding allocated in a later Spending Review. Some reports suggest that health and education budgets might be subject to cuts to finance these reforms, as both departments would be involved in delivering the proposed policies. Concerns have also been raised by the Office for Budget Responsibility (OBR) regarding how new job support measures will be assessed, given past schemes that did not meet their stated employment targets.
A spokesperson for the Department for Work and Pensions stated that the Milburn and Timms Reviews will "lay the foundation for sustainable reform." They also highlighted the existing Youth Guarantee, which allocates £2.5 billion over three years to support nearly one million young people and create up to 500,000 earning and learning opportunities.