Britain's youth are facing a crisis of opportunity, and the country is paying the price for failing to invest in its future. The generation that grew up during the post-2008 crash austerity years and in the shadow of the Covid pandemic is feeling the pinch, and it's not hard to see why. The level of public service provision they enjoyed as children is gone, living costs are rising, the AI revolution is changing everything, and the planet is on fire. This is a generation that feels like they are being left behind, and it's a crisis that extends well beyond the jobs market.
One thing that immediately stands out is the impact of austerity. The cuts to youth services, education, and public sector spending have had a devastating effect on the lives of young people. For every £1 the state spends on employment support for young people, it shells out £25 on benefits. This is a clear indication of the failure to invest in prevention, and the consequences are dire. The tragedy is that rather than spending on the prevention of bad societal outcomes, Britain has ended up allocating vast sums to the consequences of the failure instead.
In my opinion, the root cause of this crisis is the lack of investment in public services early on. The Sure Start program, for example, was supposed to save money by scrapping the network of family hubs. But research shows that as the funding dried up, spending on looked-after children and safeguarding rose by more than half. This is a pattern repeated across government, where the state is in firefighting mode rather than investing in prevention. As a result, Britain is paying the price of a crumbling NHS, rising welfare bill, jobs market inactivity, and consequent weak economic growth.
The challenge for ministers is that the costs to the economy and to government finances of the Neet crisis is £125bn a year and rising. Getting more young people into work would, however, revitalise the life chances of millions and drive up labour participation, boosting the economy and public finances. This is a compelling argument for taking action, but it will come with challenges for a prime minister hemmed in by the UK's current tight fiscal predicament.
One thing that makes this particularly fascinating is the timing problem. The costs appear immediately, while the savings arrive years later, often benefiting a different government. This is why the Treasury has often been sceptical, favouring firefighting over fixing. But refusing to make the transition is a bad choice, as Britain is already paying the price of a crumbling NHS, rising welfare bill, jobs market inactivity, and consequent weak economic growth. The alternative is to settle for a country hamstrung by the costs of failure, where young people feel lost.
In my view, the Milburn review is a critical test of whether Britain will grasp the nettle to rebuild a preventive state from the ashes of the austerity years. The size of the economic, fiscal, and social prize would be substantial, and the benefits would be felt for generations to come. It's time for a fundamental shift in approach, where investment in public services early on is prioritised to prevent problems from developing. Only then can Britain truly invest in its future and provide opportunities for its young people.
