highest levels since the outbreak of the Covid pandemic<\/a>, with young people bearing the brunt as businesses warn over the impact of tax increases and a downturn in the economy amid the fallout from the Iran war.<\/p>\nIn a major report published on Thursday, the Milburn review said the lost contribution to the economy and cost to the state of supporting young people through the benefits system was leaving a multibillion-pound financial hole.<\/p>\n
\u201c[However,] the principle cost isn\u2019t borne by the taxpayer. It\u2019s borne by the young person; being Neet has a long-term scarring impact. Costs to their confidence, costs to their health, costs to their future income,\u201d he said.<\/p>\n
\u201cIt\u2019s a deposit never saved, a home never bought, a pension never built.\u201d<\/p>\n
The report is the first part of Milburn\u2019s findings before he is expected to make final recommendations to the government in the autumn.<\/p>\n
Sounding the alarm over the long-term damage for young people, the former health secretary under Tony Blair warned the average lifetime loss in earnings because of a period of being Neet between the ages of 18 and 24 was the equivalent of \u00a352,000 a year.<\/p>\n
\u201cThe longer a young person is outside work or learning, the harder and more expensive it becomes to help them back. In this review we estimate the cumulative annual cost to our country of almost 1 million Neet young people at \u00a3125bn. That is more than we spend on education each year,\u201d the report said.<\/p>\n
\u201cThe question is no longer whether the current position is affordable. It is whether it is sustainable.\u201d<\/p>\n
If every young person aged 18 to 24 who was Neet was in work last year, the report found it would have contributed \u00a338bn more to UK gross domestic product, while cutting the cost of the benefits bill for the Treasury.<\/p>\n
The report warned that the lifetime public finance impact from a young person being Neet between the ages of 18 and 24 was equivalent to \u00a329,000 a year on average.<\/p>\n
In analysis showing the government spends about \u00a38.1bn a year on benefits directly for young people through the welfare system, it said more than half \u2013 \u00a34.4bn \u2013 was allocated to Neets.<\/p>\n
The report showed about \u00a33.2bn was spent on disability benefits through the personal independence payment, which is available to people in and out of work. However, the report said young people could be helped to find a job through a rise in spending on employment support and a retooling of the education system and Britain\u2019s labour market.<\/p>\n
Milburn estimated that \u00a33.2bn out of the total benefits bill could have been avoided if Neet young people had been in work and earning above earnings thresholds.<\/p>\n
He said it was \u201cshocking and shameful\u201d that for every \u00a325 spent on welfare the government spent \u00a31 on employment support. Only one in five young people who are Neet are getting meaningful help to find work, leaving young people \u201ctrapped on benefits\u201d, he added.<\/p>\n
\u201cThe welfare system must always protect those who cannot work \u2026 that is non negotiable. But for young people who could participate, the welfare system should be supporting them to do so. Today it is not.\u201d<\/p>\n
However, any fresh attempt at welfare reform could prove divisive after Starmer\u2019s chaotic benefits U-turn last year<\/a>, with concerns that welfare cuts would risk driving up poverty amid the cost of living crisis.<\/p>\nSpeaking at the launch of the report, Pat McFadden, the work and pensions secretary, said the government had made a \u201cmajor and important start\u201d to address youth worklessness through its jobs guarantee. However, he acknowledged ministers had to take further action.<\/p>\n
\u201cAlthough I commissioned this report, I\u2019m clear that responding to it is not just the cause of one department or one secretary of state,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"Britain risks a financial hit worth \u00a3125bn a year from a worsening crisis in youth worklessness after a…\n","protected":false},"author":2,"featured_media":449358,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-449357","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/449357","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=449357"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/449357\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/449358"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=449357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=449357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=449357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}