Britain is paying the price for failing to invest in its young people | Richard Partington
Britain faces a crisis due to chronic underinvestment in young people, leading to a generation cut adrift and significant economic costs. A new review highlights the need for a 'preventive state' to reverse the trend.
Intelligence analysis by Gemini 2.5 Flash
The article argues that Britain's failure to invest in its youth, particularly stemming from post-2008 austerity, has led to a generation of 1 million young people not in education, employment, or training (Neet). This underinvestment has shifted public spending from prevention to costly crisis management, impacting the economy and public finances, and necessitating a fundamental shif…
Imagine your house has a tiny leak in the roof. If you fix it right away, it costs a little bit of money. But if you ignore it, the leak gets bigger, ruins the ceiling, and eventually floods the whole house, costing a huge amount to repair! Britain has been like that, not fixing the small problems for young people early on. Now, many young people are struggling to find jobs or get training, and it's costing the country a lot more money to help them later, like fixing a flooded house instead of a small leak.
Analysis
1 Million Young People
Britain is currently grappling with a significant challenge: approximately one million young individuals are classified as Neet, meaning they are not engaged in education, employment, or training. This substantial figure represents a profound loss of talent and potential, extending far beyond mere job market statistics to impact the fundamental building blocks of a just and prosperous economy. The roots of this widespread inactivity are deeply embedded in the austerity measures implemented following the 2008 financial crash, which significantly eroded public service provisions that earlier generations benefited from.
The consequences of these spending cuts are now maturing, manifesting in disastrous outcomes for young people entering the workforce. The article highlights that the risk of a child becoming Neet can be traced back to their earliest years, underscoring the long-term impact of policy decisions. Over the past 16 years, funding for youth services in England has plummeted by 76%, equating to a loss of £1.3 billion, leading to the closure of thousands of youth clubs and a reduction in social workers. Similarly, per-pupil spending in schools was frozen for 14 years, and investment in school infrastructure, including those affected by the Raac crisis, fell by a quarter.
Sure Start
The Sure Start program serves as a cautionary tale regarding the shift from preventive spending to crisis management. The Conservatives' decision to effectively dismantle this network of family hubs, initially established by Labour, was intended to generate savings. However, subsequent research has demonstrated that as funding for Sure Start dried up, spending on looked-after children and safeguarding increased by more than half. This illustrates a critical flaw in the approach: the need for support for disadvantaged families did not disappear; instead, it merely transitioned from proactive prevention to reactive crisis intervention, often at a much higher cost.
This pattern is not isolated to youth services but is repeated across various government sectors. Rather than making early investments in public services to prevent problems from escalating, the state finds itself in a perpetual 'firefighting mode'. The article emphasizes that this shortsighted approach ultimately leads to greater expenditure on the consequences of societal failures, rather than on their prevention. The economic and social costs associated with this reactive stance are substantial and continue to climb without strategic intervention.
£125bn a Year
The economic and fiscal burden of the Neet crisis is staggering, currently estimated at £125 billion annually and continuing to rise. This figure underscores the immense cost to the economy and government finances resulting from the failure to adequately invest in young people. For every £1 the state allocates to employment support for youth, it spends £25 on benefits, highlighting the severe inefficiency of a system focused on managing symptoms rather than addressing root causes.
However, the article also points to the substantial 'economic, fiscal and social prize' that could be reaped by rebuilding a 'preventive state'. Restoring the UK population's health to 2014 levels, for instance, could boost GDP by 2% and generate a £72 billion dividend for public finances, according to the Health Foundation. The Office for Budget Responsibility similarly estimates that investing in prevention could reduce national debt by approximately 45% of GDP by the 2070s. Getting more young people into work would not only revitalize millions of life chances but also drive up labor participation, providing a significant boost to both the economy and public finances, despite the immediate fiscal challenges of shifting investment upstream.
Key points
- Britain's failure to invest in young people has led to 1 million individuals being Neet (not in education, employment, or training).
- Austerity measures post-2008 significantly cut public services, including a 76% reduction in youth services funding and frozen school spending.
- The state's shift from preventive spending to crisis management is exemplified by the Sure Start program, where funding cuts led to increased costs for looked-after children.
- The Neet crisis costs the UK economy and government finances an estimated £125 billion annually, with the state spending £25 on benefits for every £1 on employment support.
- Rebuilding a 'preventive state' could boost GDP by 2% and generate a £72 billion public finance dividend, but faces challenges due to immediate costs and delayed savings.
Implementing a 'preventive state' could lead to substantial economic and social benefits, including a potential 2% boost to GDP and a £72 billion dividend for public finances by restoring population health. Getting more young people into work would revitalize millions of life chances, increase labor participation, and significantly improve the economy and public finances in the long run.
The transition to a preventive state faces significant challenges, including the UK's tight fiscal predicament and the immediate costs of upstream investment. Savings from preventive spending take considerable time to materialize, making it difficult for governments seeking quick progress to justify, as funds for acute needs and welfare cannot be simply cut off immediately.
