Labour’s blueprint for getting Neets into work ‘could cost £6billion a year’

A report from the Resolution Foundation says Labour’s planned response to youth unemployment could cost the taxpayer more than £6 billion a year. Former Cabinet minister Alan Milburn is due to publish recommendations next week for supporting around one million young people who are not in education, employment or training; the plans matter because ministers say they could help curb welfare spending, but would require substantial upfront investment.

The think-tank estimates that matching the OECD average for spending on work coaches and job subsidies would require an extra £5 billion, while restoring further education funding to 2010 levels could add £1 billion. Milburn’s interim findings say the state spends 25 times more on benefits for young people than on helping them find work, with the ratio reaching 50 times in some cities. The report may propose phasing in extra funding and recouping some costs through reduced benefit entitlement, although government sources expect next week’s initial commitment to be much lower than £6 billion.