MORE than a million young people are not in work or education, a major report found today, warning of a “lost generation.”

Former health secretary Alan Milburn warned that a “whole-system failure” has led to nearly one in seven 16 to 24-year-olds not in employment, education or training, known as Neets.

The issue is costing the country an estimated £125 billion a year, his report found.

His interim report came as the latest official data showed the number of young people neither working nor learning topped one million for the first time since 2013, reaching 1.01 million in the three months to January.

Prime Minister Sir Keir Starmer described Mr Milburn’s report as “sobering” and said he “will not allow a lost generation.”

“We clearly need to [do] more,” he said.

The report, commissioned by the government to look at the causes and possible solutions to the Neets issue, warned the figure could rise to one in six by 2031, representing 1.25 million young people.

Mr Milburn insisted there is “no evidence” of a link between migration and joblessness among young people, and warned that the issue is “more than an economic crisis, it is a moral one.”

“The problem is that for too many young people, opportunities are not growing, they’re shrinking,” he said.

“There are no easy solutions.

“[The evidence] supports… that the institutions we built to support young people into adulthood are no longer fit for that purpose, and that the country has known this for some time.”

Rejection has “become part of the youth economy,” Mr Milburn said, adding: “You put in an application dozens at a time, you hear nothing back, you just get rejected.”

He said the characterisation of young people not trying is “a myth,” adding: “The story of not trying, being soft, being a snowflake generation — I just don’t buy it.”

The review’s research found that 84 per cent of Neets surveyed said they wanted a job or training.

The report concluded that “what should have been treated as an urgent national crisis has been absorbed into the background noise of public life” as Mr Milburn argued that “tolerance [of the status quo] is no longer acceptable.”

TUC general secretary Paul Nowak warned that the Neets crisis has been “years in the making,” adding: “It has been created by a toxic mix of austerity, apprenticeship failure, exploding levels of insecure work and a stagnant economy blighted by stark regional inequalities.

“But young people have been unfairly scapegoated by those offering lazy assumptions about young people being a generation unwilling to work.

“If you really want to tackle the Neet crisis, you have to start by delivering pathways for young people into good quality jobs and apprenticeships.”

He said young people need “good, secure jobs with decent prospects, including notice of their shifts and sick pay.”

“But too often, they’re stuck in insecure, low-paid work.”

National Union of Students (NUS) vice-president Alex Stanley said: “Over a million young people have fallen through the cracks of many broken systems.

“They’ve grown up under austerity, had their formative years in lock-down, and now are competing with AI for work.”

He called for a “cohesive response,” warning that if the government, alongside businesses, colleges, universities and society, do not face up to this challenge, we will see a generation left behind and the consequences that carries.”

National Education Union general secretary Daniel Kebede welcomed the review’s findings, adding: “Alan Milburn is right to highlight that England’s education system is exam-obsessed and that the narrow, packed curriculum disengages many young people.

“Our over-reliance on exams does not support young people to develop the skills necessary for work and life and demotivates a large cohort.”

James Watson-O’Neill, chief executive of the national disability charity Sense, said: “For too long, disabled people have been locked out of work not because of a lack of ambition or potential, but because systems and workplaces are not designed with disabled people in mind.

“Disabled people should not be forced to fit around systems that were never built for them.”

Local Government Association chairwoman Louise Gittins said the review “lays bare the stark challenge” of tackling the youth unemployment crisis, and that any solution “must have councils at the heart of the effort.”

Work and Pensions Secretary Pat McFadden branded the figures “stark,” adding that the government is “already taking action by bringing forward the biggest youth employment reforms in a generation to create 500,000 opportunities for young people.”

Recommendations for fundamental reform are expected in Mr Milburn’s final report, due in the autumn.