Committee publication · Report · 22 July 2026 · HC 180

3rd Report - Youth employment, education and training

Inquiry: Youth employment, education and training

Government response deadline: 22 September 2026

Summary

The Work and Pensions Committee examines the UK's growing crisis of youth unemployment and inactivity (NEETs), with 1.01 million young people aged 16–24 neither in employment, education, nor training as of March 2026. The committee concludes current government interventions are insufficient and calls for a whole-of-government youth employment strategy with ambitious targets, reformed tax and benefit policies, and long-term commitment to address underlying drivers including mental health, childhood poverty, and labour market weakness.

Key findings

Over 1 million UK young people (13.5% of 16–24-year-olds) are NEET; the rate has risen from 9.7% (673,000) in 2021, uniquely among OECD countries driven by both unemployment and economic inactivity.
Mental health emerges as 'the new kid on the block' in NEET drivers, with a 70% rise in work-limiting health conditions among NEETs over 10 years and epidemic-level child anxiety and depression post-pandemic.
The committee identifies multiple policy incoherences: employer National Insurance changes disproportionately harm youth recruitment; the benefits 'apprenticeship cliff edge' penalises 16–18-year-old apprentices' families; the 21-hour rule for young carers restricts education access; and delays to Universal Credit health element lack evidence.
The Youth Guarantee schemes reach only benefit claimants (56% of NEETs); 44% of NEETs are not in the benefit system and thus excluded from current programmes.
Apprenticeships are overshadowed by system complexity, lack of vocational esteem, and insufficient employer incentives; refocusing on young people requires deeper structural change.

Recommendations

The government should respond to Alan Milburn's full review recommendations within two months of publication.
Bring forward a cross-departmental youth employment strategy with ambitious targets for youth employment/education/training rates and reducing inequalities by group and area.
Extend the National Insurance Upper Secondary Threshold so all under-25s attract no employer Class 1 National Insurance until earnings exceed £967 per week; model long-term costs and benefits.
Treat 16–18-year-old apprentices as part of the family unit when assessing benefit eligibility to remove the 'cliff edge' penalty.
DWP should undertake a comprehensive review of all benefit rules affecting 16–18-year-old participation in education and training pathways.
Remove the 21-hour study limit for young adult carers' eligibility for Carer's Allowance.
Provide evidence-based justification before implementing any age restrictions on Universal Credit health element access for young people.

Tone

Critical

Topics

youth-employmentneet-statisticsmental-healthtax-policyapprenticeships

Key actors

Debbie Abrahams (Work and Pensions Committee Chair), Pat McFadden (Secretary of State for Work and Pensions), Alan Milburn (former Health Secretary; led independent review into youth inactivity), Barry Fletcher (CEO, Youth Futures Foundation), Professor David Taylor-Robinson (University of Liverpool; public health/health inequalities expert), Kate Nicholls (Chair, UKHospitality), Kate Shoesmith (Director of Policy, British Chambers of Commerce), Dr Veerle Miranda (Head of Youth Employment and Social Policies Unit, OECD)

Notable line

“It is a travesty that over one million young people in the UK are not in employment, education or training”

Key Quotes

“It is a travesty that over one million young people in the UK are not in employment, education or training”
— Work and Pensions Committee (Summary) · Opening statement of the committee's position on the scale of the problem

“… a whole system failure.”
— Alan Milburn · Conclusion of interim report on causes of rising youth inactivity

“Over the last 30 years, we have not really had an ambition for what our NEET rate should be. … Until you set that, it is really hard to work back and say what action you should take… You need to set a goal.”
— Barry Fletcher, CEO, Youth Futures Foundation · On the necessity of government setting an explicit NEET reduction target

“… often, the mental health system tries just to get a young person better, whereas the employment system tries to get them into work, but as long as they do not have the same incentive, it will not work.”
— Dr Veerle Miranda, OECD · Explaining lack of cross-system coherence in youth support

“… child poverty was the "single most modifiable thing" for addressing high NEET rates.”
— Professor David Taylor-Robinson, University of Liverpool · On the primacy of childhood poverty reduction as a NEET intervention

“… the sector's wage costs had increased by £1 billion.”
— Kate Nicholls, Chair, UKHospitality · Impact of employer National Insurance and wage increases on hospitality sector recruitment

“If you are a young adult carer you have to choose between getting an education and qualifications and getting some financial support. That is not right.”
— Tamara Sandoul, Head of Policy and Public Affairs, Carers UK · On the 21-hour rule barrier for young carers' access to Carer's Allowance while studying

“… the UK government simultaneously declares all post-16 pathways equivalent—while its benefits system financially penalises some families whose children choose vocational routes.”
— Social Security Advisory Committee · On the contradiction between apprenticeship parity policy and benefits system treatment

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Source · parliament.uk record ↗