More than one million 16- to 24-year-olds in the UK are now not in education, employment or training (NEET), a figure described by a new report as a “moral crisis.” The report, authored by former Labour health secretary Alan Milburn, partly blames the government’s above-inflation minimum wage hikes for making it harder for employers to hire young people. Milburn’s review, published alongside Office for National Statistics data, warns the economic cost will reach £125 billion a year—more than the UK spends on education.

1.01 Million NEETs and a £125 Billion Annual Toll

According to the Office for National Statistics, the number of 16- to 24-year-olds outside work, education or training rose to 1.01 million in the three months to March 2025,the highest level since late 2013 under a different methodology. That represents a 55,000 increase from the previous quarter. Milburn’s report calculates the long-term cost to the country at £125 billion a year, exceeding the entire education budget. The report notes that 613,000 of these young people are economically inactive—a record high.

Ex-Labour Minister Aligns with Tony Blair’s Critique of Starmer’s Policies

Alan Milburn, a former Labour health secretary under Tony Blair, backed Blair’s recent criticism that the Starmer administration lacks a “coherent plan” for business. speaking to Times Radio, Milburn said “every employer that we spoke to raised these issues as real concerns, the minimum wage.” He argued that in low-margin sectors like retail and hospitality, above-inflation wage hikes have had “no doubt” an impact. Milburn called for a “whole system reset” on education, welfare, and health policy to create the right conditions for youth employment.

The 70% Rise in Health-Linked NEETs: Mental Health Now the Primary Condition

Milburn’s report reveals that the proportion of NEETs unable to work due to a health condition has jumped 70% over the past decade. Among disabled young people not in work or training, those citing mental health as their primary condition rose from a quarter in 2011 to nearly half in 2025. This shift suggests that policy responses must address both economic barriers and mental health support, a point Milburn described as “a warning that far too many people are reaching adulthood only to find the door to opportunity closed.”

Political Reactions: Starmer Calls It “Sobering,” Badenoch Says “Shameful”

Prime Minister Keir Starmer described the Milburn report as “sobering” and insisted he “will not allow a lost generation.” He acknowledged the issue is “complicated and complex.” In contrast, Conservative leader Kemi Badenoch called the NEET figures “truly shameful,” blaming Labour’s “Jobs Tax, minimum wage hikes, and trade union-dictated employment regulations” for worsening the problem. the political divide highlights a challenge with no easy policy fix: whether to prioritise higher wages for young workers or lower barriers for employers.

As the source report makes clear, the UK’s NEET crisis is not new, but the intersection of rising minimum wage floors and a surge in youth mental health problems presents an unprecedented challenge. What remains unclear is whether the government will heed Milburn’s call for a “whole system reset” or maintain its current course.