A benefits crackdown will not help the 300,000 NEETs claiming nothing. They need more jobs

Next Wednesday, the Chancellor will deliver a Budget with jobs for young people somewhere near the top of the in-tray. Soon after, Alan Milburn will publish his final report on the near million young people who are Not in Education, Employment or Training (NEET). There are strong indications that Milburn wants a separate benefits system for young people, with more intensive support to help them into work. He has already said welfare spending can be cut over time to help pay for it.

It’s obvious isn’t it? Get young people into work, then the benefits bill comes down. But it rests on an assumption that the NEET problem is also a benefits problem. Approximately 300,000 young people aged 18 to 24 are NEET and claim nothing at all. The Institute for Fiscal Studies calls them ‘hidden NEETs’. Milburn’s own interim report called them one of its ‘most troubling findings’, as they are ‘out of work and out of sight’. A benefits crackdown will not touch them because there’s nothing to cut.

The uncomfortable part for the Treasury is that helping them saves nothing either. So who are they? Not who you might think. Among hidden NEETs aged 22 and 23, more than half have a degree. Three quarters are actively looking for work. Only 2% say they’re out of work because of sickness or disability, compared with 27% of NEETs receiving benefits. For over a decade I was a headteacher in inner-city London. University was not the right destination for everyone.

But for thousands of other teenagers, the message was ‘work hard, get your grades, go to university and doors will open’. Far too many of them have discovered the opposite - and those numbers are growing. The government’s own research describes a vicious circle I hear young graduates talk about a lot. Entry-level jobs want experience, an unfair contradiction in terms. And elsewhere, remote work, employer costs and AI are restricting job creation.

Why don’t the 300,000 claim? Often it is because someone else is paying. Four in five live with their parents. More than a third come from the top third of household incomes. If your parents can afford to keep you, you’re amongst the hidden NEETs. But most of these would-be young professionals are still looking for work and not succeeding. Plenty won’t go near a Jobcentre. Young people told government researchers that claiming benefits carries a stigma, as it marks you out as ‘lazy’.

Those who can afford to live at home might be better placed than those on benefits, but it doesn’t mean they are in a good position. Among those aged 22 and 23, 43% have been out of work for more than six months. One in five have been out for more than 18 months. That is a chasm at the start of a career. Next week’s Budget has to get the sequence right. Milburn’s own case is that the bill falls over time, once the support is working. There will be pressure to cut now and then quietly forget the support.

The NEETs figure can still go much higher, as can the benefits bill. Whilst that will increase the urgency to act, you still cannot sanction a young person into a job market they’ve never set foot in. A young person with no work history needs a first rung, not a threat. The hidden NEETs most need an economy which creates more jobs. Helping someone who claims nothing will cost money. But those hidden NEETs already pay a cost in lost earnings, lost tax and lost confidence.

Meanwhile, interest on student loans for the graduates among them continues to grow. Next week’s budget needs to work for the hidden NEETs too. ____________________ Alex Atherton is a former secondary school headteacher, Gen Z expert, keynote speaker and author of The Snowflake Myth: Explaining Gen Z in the Workplace and Beyond. LBC Opinion provides a platform for diverse opinions on current affairs and matters of public interest. The views expressed are those of the authors and do not necessarily reflect the official LBC position.

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