The publication of The Young People and Work: Interim Report (widely referred to as the Milburn Review) brings attention to an increasingly important policy and labour market challenge that has been putting pressure on local and national economic growth for a considerable time.

The publication comes at a time where there are now more than one million 16 to 24-year-olds not in education, employment or training (NEET). This issue has both social and economic costs, and acts as a significant drag on productivity, inclusion and the long-term resilience of places. At GC Insight, we work across a range of labour market studies, including Get Britain Working Plans and labour market monitoring dashboards. In this article, we review some of the key themes in the new report and why it matters for local economic development.

What does the review identify and argue? 

The report highlights that there are now more than one million 16 to 24-year-olds not in education, employment or training (NEET). 

The review argues that rising NEET levels are not a short-term fluctuation but a sign of deeper system failure, pointing to a labour market that has become harder for young people to enter, fewer entry-level routes, and a growing overlap between youth disengagement, poor mental health and disability.

The review suggests the UK has become better at managing the consequences of disengagement than preventing it in the first place, reinforcing the need for programmes and policies such as The New Deal for Young People. However, national policy will only succeed if local systems are ready to respond. If youth disengagement is shaped by health, skills, transport, employer demand and the quality of local opportunity, then the response has to be place-based too.

Why does this matter for local economic development?

The NEET challenge is often treated as a youth policy issue, but it is also a core economic development concern. Places cannot grow inclusively if a rising share of their young population is disconnected from work and learning at the point when skills, habits and labour market attachment are normally formed. High NEET rates weaken future labour supply, reduce the return on local skills investment and make it harder for employers to recruit into entry-level roles.

There is also a wider place effect. In areas already dealing with weak town centres, poor health, low pay and fragile transport links, high youth disengagement can reinforce a broader cycle of decline. It raises pressure on public services, reduces confidence in local opportunity and weakens the case for long-term investment. That is why this issue matters not only to schools and employment services, but to local growth strategies, regeneration plans and the design of local support systems.

Why does local data tell us, and how diverse is the picture?

The local picture is harder to pin down than the national one because the available data is patchy. Official local authority NEET data from the Department for Education is strongest for 16 to 17-year-olds and often includes a not-known group, which means it captures only part of the wider youth cohort. To get a broader view, it helps to look at two lenses together: the DfE’s 16 to 17 NEET data and economic inactivity among 16 to 24-year-olds from the ONS Annual Population Survey. The second is not a NEET measure and counts people in education within its “economically inactive” population, but it is still useful as a proxy for where youth labour market issues may be more concentrated.

That broader measure suggests youth economic inactivity has edged up since before the pandemic, rising from around 38.9% in 2019 to around 40.1% in 2025. The national shift is not huge, but it masks sharp local divergence. Some authorities have seen marked increases since COVID, while others have moved in the opposite direction, suggesting the recovery has been uneven and that local conditions matter a great deal.

The 16 to 17 NEET data points to some clear pressure points, with places such as Blackpool, Derby, Stockton-on-Tees, Hull and Newcastle standing out in the 2025 figures, and the North East showing particularly high rates at a regional level.

NEET and Not Known 16-17 in England, 2025

16-24 Economic Inactivity Rate, 2025

But when the lens widens to 16 to 24 inactivity, the geography becomes more mixed, with high rates appearing in a combination of London boroughs and other urban authorities. That is an important finding in itself: the places with the highest early disengagement are not always the same as those where a broader share of young adults are outside employment or training.

What are the key takeaways for local labour markets?

For local areas, the review’s message is clear and likely nothing new. Reducing NEET levels is not just about employability support once young people have already fallen out of the system. It means spotting risk earlier, joining up health, education and employment support more effectively, and making sure local growth strategies create genuine routes into work for young people. The interim report is only the diagnostic phase, but it already makes one thing clear: if places are serious about inclusive growth, they cannot treat youth disengagement as a side issue.

For places seeing these challenges emerge more clearly in their own data, there is likely to be increasing value in understanding what sits behind them and what that means for local policy and delivery. This is an area GC Insight has been working on across a range of labour market studies, including Get Britain Working Plans and labour market monitoring dashboards, helping local areas build a stronger evidence base around participation, inactivity and routes into work. As the policy response develops, that kind of local insight is likely to become increasingly important.

If you would like to discuss this further, please get in touch with Chris Fox or Lauren Newby.