An independent review into the rising numbers of young people not in work or study has been announced by Pat McFadden as he warned of a “crisis of opportunity” posed by youth inactivity.
The investigation, to be led by former Labour health secretary Alan Milburn, will shape reforms to health and welfare, with a particular focus on the impact of mental illness and disability.
Nearly one million – or approximately one in eight – people aged 16 to 24 are now not in education, employment, or training (Neet), according to the Office for National Statistics.
More than a quarter of young people now cite long-term sickness or disability as a barrier, and the number claiming health benefits is also growing.
Interim findings are due to be shared with the Government next spring, with the final report published next summer.
Work and Pensions Secretary Mr McFadden said: “The rising number of young people who are not in education, employment or training is a crisis of opportunity that demands more action to give them the chance to learn or earn.
“We cannot afford to lose a generation of young people to a life on benefits, with no work prospects and not enough hope.
“I am determined to build a system that supports young people, not just in finding a job but to build a better future – because when young people succeed, Britain succeeds.
“If we get this right, the prize is huge – transforming lives and life chances, with the pent-up potential of the next generation firing our economy and building a better future for all.”
The Government hopes the review will help to cut the long-term costs of youth inactivity and make the social security system more sustainable.
Prime Minister Sir Keir Starmer was forced to scrap plans to restrict eligibility for personal independence payments (Pips) earlier this year to avoid a Labour rebellion which could have led to him losing a crunch Commons vote.
The climbdown left a black hole of around £5 billion in the Government’s spending plans, and Mr McFadden has vowed to press on with reform since picking up the welfare brief in September.
The investigation will run alongside the review led by disabilities minister Sir Stephen Timms into Pips, which is being “co-produced” with disabled people and organisations that represent them.
Asked whether he thought over-diagnosis was fuelling a mental health crisis among young people, Mr McFadden told the Sunday Times: “I don’t want to play amateur doctor. I want to approach this with sensitivity.
“The question I’m asking is, given the higher reported number of these conditions among young people, what is the best policy response?
“I don’t believe there should be an automatic link between diagnosis and benefits.”
Mr Milburn, who served in Sir Tony Blair’s New Labour administration in the 1990s and early 2000s, said “urgent action” was needed.
“We cannot stand by and let a generation of young people be consigned to a life without employment or prospects,” he said.
“That’s why, with the help of a panel of expert advisers, I will aim to get to the bottom of why current efforts are not preventing young people from becoming trapped out of work and education.
“The review will be uncompromising in exposing failures in employment support, education, skills, health and welfare and will produce far-reaching recommendations for change to enhance opportunities for young people to learn and earn.”
By Nina Lloyd, PA Political Correspondent