Young People and Work: Milburn Interim Report

Steve Darling Excerpts

Tuesday 3rd November 2026 Westminster Hall

[Ian Sollom (St Neots and Mid Cambridgeshire) (LD)]

It is a pleasure to serve under your chairship, Ms McVey. I congratulate the hon. Member for Wrexham (Andrew Ranger) on securing this debate.

Alan Milburn’s interim report is a thorough and, in places, uncomfortable piece of work, but it is an important foundation for anyone serious about tackling the waste of a million young people’s talent, not least because it takes apart some myths. Some 54% of young people who are NEET told the review that they want to work, and another 30% want to get into education or training. These are not lazy young people: as the report puts it, they are “exhausted”. The mechanisms that used to bring young people into work are working less well. The first rung has thinned. The share of 16 and 17-year-old students doing any paid work has fallen from 35% in 2006 to just 19%.

[Steve Darling (Torbay) (LD)]

UKHospitality highlights that over 100,000 jobs have been lost in the hospitality sector, particularly in areas such as Torbay where hospitality can be the first rung of employment. Does my hon. Friend agree that we are seeing a crisis of opportunity for young people, rather than a NEET crisis?

[Ian Sollom]

I agree. Opportunities have been thinning for a long time, and that is a big part of the issue.

Employers ask for experience, but the pathways through which experience was once gained have narrowed or gone. The report is blunt about why the system is failing. Britain has not ignored youth employment. It has had the new deal for young people, the future jobs fund, the youth contract and kickstart, but each was abolished once the immediate crisis passed.

Milburn describes what we have as “parallel play”: education is accountable for attainment, welfare for benefit flows and health for treatment, but nobody is accountable for the pathway from childhood to working life. The clearest sign of that is what the report calls the “hidden cohort”: about 314,000 NEETs aged 18 to 24 in England, nearly half of whom claim no benefits at all. They are in no caseload, and no institution is responsible for them.

The system needs a long-term commitment through a permanent architecture. That is why the Liberal Democrats advocate a wholesale overhaul of jobs coaching so that every young person has a real person who sits down with them several times a year and helps them to plan where they want to get to, building on models from the Netherlands and Germany.

Such support has to be delivered locally, because labour markets, transport and employers operate locally. The risk, Milburn warns us, is that without a national framework, devolution can become a delegation of failure. Skills England ought to be part of that national framework, but in its short life it has already been moved from one Department to another, and it remains simply an Executive agency. It needs supercharging; it should become a genuinely independent body with the standing to work across Government, including local government.

The Milburn review estimates that for every £1 the Department for Work and Pensions spent on employment support for young people in 2024-25, about £25 was spent on benefits. In its words,

“The UK’s approach for decades has been to pay the bill for…youth inactivity, rather than invest in preventing it”.

Milburn argues that the Treasury’s usual value-for-money tests do not look far enough ahead to capture the lasting damage of time out of work or training at a young age. Once that is counted, early intervention pays for itself many times over.

In the Budget last week, the Chancellor announced that from the next spending review there will be a ringfenced budget for prevention. The question is whether the support for young people at risk of becoming NEET will go in that ringfenced budget. The report shows that we can already identify many of those most at risk while they are still at school, but the pupil premium stops when a young person turns 16, at exactly the point that the risk peaks. Extending it to post-16 learners, including those in further education, is a long-standing call from the Lib Dems. I hope we see it in Milburn’s prescription. We would also like to see a guarantee to every young person of 100 hours of work experience before they turn 18, so that it no longer depends on who their parents happen to know.

That brings me to who else needs to be part of the solution. Milburn has said that there is a contract at the heart of all this, referring to the relationship between young people and the state. I suggest that the contract is missing a signatory. For most young people, the first job is offered not by the state but by an employer. If the final report’s recommendations are to work, employers must be part of the bargain. Milburn’s own evidence makes the case. He argues that as the cost of employment rises, the case for taking on someone inexperienced becomes harder, unless employers are given the support to offset the risk.

On cost, the national insurance changes of the Government’s first Budget undoubtedly added to the pressure on part-time, entry-level roles, especially in retail and hospitality. That is why we Liberal Democrats have called, at the very least, for a lower rate between £5,000 and £9,100, but cost is only half of it. A large employer can absorb the risk of a young recruit who needs supervision and support; a small firm often cannot, however cheap the hire. That is why we have proposed skills co-operatives as part of the solution, with SMEs pooling training and pastoral support so that no single business carries the whole risk of giving a young person their first start.

I realise that the Minister will not pre-empt the final report, so I have three questions of principle. First, the report highlights that no institution is responsible for this. Does the Minister accept it as principle that someone must be, and should that responsibility be with a named local body working within a national framework that guarantees a minimum standard? Secondly, will employment support and post-16 provision for disadvantaged young people count as preventive spending when the new ringfenced budget is set? Thirdly, before any new obligations are placed on young people, will the Government ensure that the support offer is in place? The report says that inaction or tinkering at the edges is itself a decision—a costly one. I hope the Minister will tell us that the final report will be met with something much more than that.