In today's Britain, a critical issue has emerged: the failure to invest in its youth. This oversight has profound implications, impacting not only the present but also the future of the nation. The statistics paint a stark picture, with only a quarter of young people believing in a fair society, a sentiment shaped by the post-2008 crash, austerity, and the COVID-19 pandemic.
Alan Milburn's review on youth unemployment sheds light on a million young lives in limbo, neither in education, employment, nor training (NEET). This is not just a jobs market problem; it's a symptom of a broader erosion of the foundations of a just and prosperous economy.
The roots of this crisis can be traced back to the austerity years. While other factors like Labour's economic management and the AI revolution play a role, the evidence points to the long-term consequences of Tory spending cuts. Milburn's review highlights how the risk of NEET status can be traced to early preschool years, reflecting the broader changes in education policy and youth services over the past 16 years.
The impact of these cuts is evident across the board. Youth services in England have seen a 76% funding reduction, resulting in the closure of thousands of youth clubs and the loss of social workers. School spending per pupil has been frozen for 14 years, and investment in school buildings has plummeted by a quarter.
The tragedy is that Britain has prioritized spending on the consequences of these failures rather than investing in prevention. The NEET crisis is a prime example, with the state spending £25 on benefits for every £1 spent on employment support for young people. The cost of inaction is rising, and the Sure Start program's demise further illustrates the shift from prevention to crisis management.
This pattern is pervasive across government, with a focus on firefighting rather than investing in public services early on. The task ahead, as Andy Burnham sees it, is to rebuild a preventive state, as outlined by the think tank Demos. The economic, fiscal, and social benefits of such a model are significant, as evidenced by the NHS example.
The Health Foundation's research shows that restoring the UK's population health to 2014 levels could boost GDP by 2% and generate a £72 billion dividend for public finances. The Office for Budget Responsibility also suggests that investing in prevention could significantly reduce the national debt by the 2070s.
The challenge for ministers is clear: the NEET crisis costs the economy and government finances £125 billion a year and rising. Getting more young people into work would not only improve their life chances but also drive economic growth and improve public finances.
As we approach the autumn budget, there is a compelling case for action. However, building a preventive state is not without its challenges, especially given the UK's tight fiscal situation and the need for quick results. Moving money upstream is difficult because the savings from preventive spending take time to materialize, and spending on acute needs and welfare cannot be easily turned off.
The timing problem is a significant hurdle, with reforms in early-years services taking a lifetime to show results. This is why the Treasury has often been skeptical, as the costs appear immediately, while the savings arrive years later, often benefiting a different government. The incentives favor firefighting over long-term solutions.
Refusing to make this transition, however, is a costly mistake. Britain is already paying the price for its crumbling NHS, rising welfare bill, jobs market inactivity, and weak economic growth. Milburn's review is a critical test of whether Britain will rebuild a preventive state or continue to bear the costs of its failures, leaving its youth feeling lost.
In my opinion, this is a pivotal moment for Britain. The choice is between investing in its youth and future or continuing down a path of short-term fixes with long-term consequences. The time to act is now, and the rewards of a preventive state approach could be transformative for the nation's well-being and prosperity.
