Listen to this story Members can listen to an AI-generated audio version of this article. 1.0x Audio narration uses an AI-generated voice. 0:00 0:00 Become a member to listen to this article Subscribe Britain’s NEET rate looks better than it did twenty years ago. That should be reassuring. It isn’t. In late 2005, around a million 16-24-year-olds were not in education, employment or training, a rate of 14.4 per cent. By late 2025 the count was slightly smaller and the rate had fallen to 12.8 per cent. But roughly six in ten of that group had never held a paid job, against four in ten twenty years earlier: some 155,000 more young people with no work history at all. The problem has not widened. It has deepened. Something specific has disappeared. Young people employed outside full-time education fell from about 48 per cent of the age group in 2001 to 38 per cent in 2025. The Saturday job, the holiday shift, the weekend work alongside college: this was how a work history was built before one was needed. A young person who becomes NEET today arrives with nothing to show an employer. That changes the diagnosis. Policy has focused on skills, work experience and making young people “job ready”. But does Britain lack employable young people, or employers willing and able to employ them? The youth labour market is a market, and employability programmes add candidates to one side without adding vacancies to the other. A town with 100 openings and 130 credible applicants does not improve when a programme produces 50 more job-ready candidates. Some find work; others take jobs that would have gone to other young people, and the programme records the same outcomes either way. Demand has weakened. Vacancies have been falling while employers have absorbed sharp increases in the cost of hiring: higher employer National Insurance, substantially higher minimum wages, stronger employment rights, each with strong arguments behind it. But young workers are concentrated in labour-intensive sectors, where hiring is decided at the margin. The question is not whether an experienced worker is worth the minimum wage, but whether an inexperienced applicant, whose productivity is uncertain, is worth the risk. Employer-side measures are different in kind: the government’s youth jobs grant and the jobs guarantee both make saying yes to an inexperienced applicant cheaper. But subsidies leak, through deadweight, paying for a hire that would have happened anyway, and displacement, a subsidised recruit filling a post another young person would have taken. Kickstart delivered more than 160,000 placements, and its evaluation suggests roughly eleven additional young people in unsubsidised work two years later for every hundred who took part. Jobs supported and jobs created are not the same number. Design decides how much leaks, and the largest example is hiding in plain sight. Employer National Insurance relief for under-21s is deadweight by construction: it is given for age, not for a hire that would not otherwise have been made, and it expires at 21, before many young people and most graduates make their first substantive entry. An employer weighing up someone who has never worked receives nothing. The disadvantage that matters is inexperience, not age. That is the argument we put to HM Treasury this month in our Budget representation: redesign the under-21 relief as relief on the first 12 to 24 qualifying months of substantive employment for anyone under 25, so the incentive lands at the transition into work rather than on a birthday. We also propose an interest-free apprentice employment advance of £5,000 to £7,500 for SMEs creating an additional apprenticeship, repaid where the recruitment succeeds, and a short, funded unit for that apprentice’s supervisor – because what often stands between an inexperienced applicant and a job offer is not cost but the capacity to bring someone on. None of it needs new delivery machinery. One caveat applies throughout. Most young people who are NEET today are inactive rather than unemployed, and a growing share report health conditions. Neither more vacancies nor a wage subsidy will reach them: what they need first is a supported experience of work. The strongest interventions combine both sides: a real employer, a real job and structured learning that raises productivity while the young person earns. That is a good apprenticeship, which is why the fall of more than 40 per cent in apprenticeship starts for 16–18-year-olds over the past decade is such a costly own goal. Three things follow for government: stop subsidising youth as a category and start incentivising the transition into work; judge programmes against counterfactual outcomes rather than placement counts, publishing evaluations before schemes are closed and reporting how many previously NEET young people are still in work at 24 months; and protect entry-level apprenticeship starts. Employers, including our own members, control those roles in short supply: the Saturday job, the holiday shift, the T Level placement, the entry-level apprenticeship. The question is no longer only how Britain makes young people ready for work. It is how employers are made ready to offer it. The Budget is where that work can start.
Tracey Wright 1 October 2026 This really resonated with me, particularly the point about young people needing exposure to the world of work before we expect them to be ready for it. I do think, though, that we have to recognise the reality for employers, especially smaller businesses. It isn’t just the cost of taking someone on – although increases in wages and employer NI certainly haven’t helped. It’s also the time, supervision and capacity needed to give a young person a genuinely worthwhile experience. So perhaps we need to think differently about how we help employers get involved, rather than simply asking them to do more. At IFD, we don’t promise students jobs or placements. What we do through The Lab is bring real businesses and their real challenges into education. Students get to tackle genuine problems, with all the constraints, ambiguity and expectations that come with the real world of work, while much of the structure around that engagement is taken away from the employer. It isn’t a substitute for a Saturday job or a placement – nor should it be. But it is another way of building that bridge between education and employment. If we want many more employers to give young people meaningful experience of work, perhaps we need to spend as much time thinking about how we make it easier for employers to participate as we do asking them to participate.