Why investing in industry helps solve Britain’s NEET crisis

A million young people in Britain are now not in education, employment or training, the highest level in over a decade. Alan Milburn’s interim review into young people and work has laid out the scale of it. This episode argues that underneath the headline numbers is a story about what happened to British industry, and that rebuilding it is part of the answer.
The review’s findings are stark: more than a million 16 to 24-year-olds are NEET, six in ten have never had a job at all, and the cost runs to around £125 billion a year. 

As Britain’s industrial base declined, it took the way into work with it, the apprenticeships and vocational routes that asked for a start rather than a degree. You cannot fix worklessness without work, and for too many young people the first rung simply isn’t there any more.
Part of why this is so hard to act on is how, over decades, we have come to measure the worth of public investment, counting the costs that land now more confidently than the returns that build slowly: industrial capability, supply chains, and jobs in the places that have waited longest for them. 

The episode makes the case for a broader idea of value, and sets out four things we need to do to act on it: count value differently, use what the state already buys, rebuild the routes into work, and let our institutions take long-term risk.

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Transcript

Welcome And Why This Matters

Speaker 0:03

Hello and welcome back to How We Build Britain. A quick word for anyone new. I'm Rob Gilbert. I've spent nearly 20 years working in energy, industry, and investment across the public and private sectors. I started my career in textile manufacturing, and one of my first jobs was to help offshore the last remnants of that great British industry. I've spent the years since asking the same question. Why don't we value industry more in this country? Today I am a partner at Baringa, currently on Secondment into Government to lead the design and delivery of Great British Energy's £1 billion supply chain investment program. This podcast is my own production. I'm not speaking here for government, for Great British Energy, or for Bari nga. That independence lets me explore the things I think this country needs to talk about. The premise is simple. Generations of de-industrialization have damaged our economy, our society, and increasingly our security. We need to change course. This podcast and its guests explore how. If you find this podcast useful, please subscribe wherever you get your podcasts.

The NEET Numbers And Their Cost

Speaker 1:16

Since the last episode on the jobs and the geography of the energy transition, Alan Milburn has published the interim findings of his review into young people and work. And the statistics are genuinely shocking. Just over a million young people, aged 16 to 24, are not in education, employment, or training. That is the highest level in 12 years, and on current trends, it could reach 1. And it's not just the headline numbers. Underneath the totals, there are figures that point to even deeper issues. Six in ten of these young people have never had a job at all. Twenty years ago, it was four in ten. So for most of them, this is not a story about losing work, it is a story about never getting started, about leaving school and reaching for the first step that isn't there. The report puts the cost at around £125 billion a year. Like many, I was staggered by the statistic that for every pound we spend helping a young person into work, we spend around £25 on benefits. £25 to one. That is not a country investing in its young. It is a country paying at vast expense to manage their absence. Milburn calls it a generational fault line. He's right. The report names many causes, and it would be easy for someone in my position to seize the one that suits my argument and set the rest aside. Milburn points to mental health and to a welfare system he says exacerbates inactivity rather than building the capability to work. Nothing I'm about to say is meant to diminish any of that. But one of the causes he identifies sits at the centre of everything I argue on this podcast. In his words, the first rung of the career ladder has thinned. The first job, the first opportunity, the way in. It's getting harder to find. And you cannot understand why without talking about what's happened to UK industry.

How Industry Once Opened Doors

Speaker 3:28

Let me be personal for a moment, because this really resonates with me. You heard me say I started out in textile manufacturing. What I didn't say is that I went to university first and took a degree I probably didn't need. I didn't get my first job because the work required one. I got it because suddenly everyone had one. I was lucky. The route was there for me. The people I worked alongside in one of the last bastions of UK textile manufacturing were not. When the work went overseas, there was no obvious next thing. The factory had been the way in and the way up, and when it closed, both went with it. Because this is what we forget about an industrial economy. Its value is not only in what it makes. A strong industrial base is one of the great platforms for giving people their first step into work. The apprenticeship, the shop floor, the technical role that doesn't ask for a degree you went into debt for, but teaches you, pays you, and gives you somewhere to stand. As those industries atrophied, that architecture went with it. And we haven't just lost the factories, we've lost the entry point. Since 2014, the number of under-19s starting an apprenticeship has nearly halved. The levy that was introduced in 2017 to fix it has too often let employers train staff they already have, while the genuine entry-level starts have disappeared. We've pulled the ladder up slowly over 40 years, and now we're surprised a generation can't find the bottom rung. So when Milburn points to mental health and to welfare, part of the answer, unavoidably, is to create more chances for young people to actually be employed. You cannot fix worklessness without work. In the last episode, I spoke to the parts of the country that need this most. The coastal towns, the industrial towns, the parts of the country that have been left behind. And the response has told me that there is real appetite for doing things differently across government, across industry, and across the country. But appetite isn't enough.

Clean Power Must Mean Good Jobs

Speaker 5:39

The government has committed seriously to building clean power in Britain, and I believe that's the right call. But the political weather is turning. And just this week we've seen intervention from Tony Blair urging for a reset. I don't think the answer to the challenge from Blair and others is to retreat. But instead to be much clearer, in our commitment to ensure that the future of our energy is also the future of our industrial economy, we need to root the transition so deeply in jobs and places that it stops being a cost to argue over and becomes a future people can see as work, as opportunity, and as a first rung, put back where it was taken away.

Why Value And Rules Block Action

Speaker 6:20

That means doing four things. It means counting value differently. It means using public demand differently. It means rebuilding the route to work. And it means giving institutions permission to take long-term risk. But first, why is that hard? I've spent the past year inside one of the institutions trying to do exactly this. And what I've come to believe is that the hardest part is not ambition or money or capability. It is decades of how our economic system is set up to measure the worth of public investment and the challenges of tasking the Treasury with being both pro-growth and pro-fiscal discipline. That's a tough job. And the result is an understandable focus on shorter term, more measurable outcomes. We're good at counting the costs that land now, and we're far less good at valuing the returns that build slowly, the capability, the supply chains, the jobs in the places that have waited a long time for them. When the costs are immediate and easy to count and the benefits are long term and spread across the country, the long term has a tendency to lose. Not because anyone wills it, but because that's how the scales have currently been set. And there's a second habit around how freely we are willing to back our own industry. We tell ourselves that global rules tie our hands. Mostly they do not. The United States has the Inflation Reduction Act hundreds of billions of dollars of industrial subsidy inside the same trading system we operate in. The European Union answered with a green industrial plan of its own. The difference isn't the rule book, it's the instinct. Over the years, we've just been more cautious than many comparable economies about backing our own industrial base. And there's a hard economic reason to revisit that caution. One of the ironies is that we would actually be a stronger proponent of free trade if we had a wider range of goods we could export from a position of strength. Instead, we run one of the largest goods trade deficits in the G7 at around 7.3% of GDP in 2024. A gap that the export of services doesn't close and that is getting progressively wider. None of that is an argument against discipline or value for money. It's an argument for a broader idea of value, one that can see the cost of not acting as clearly as it sees the cost of acting, the lost jobs, the lost capability, the options that we forfeit by standing

Four Practical Fixes For Britain

Speaker 8:52

still. So what do we actually need to do? Because the direction of the fix isn't a mystery, and the constraints are, to a large extent, ours to lift. First, we must count what matters. When an investment moves a young person off benefits into skilled work, we have to find a disciplined way of scoring that saving. When it routes a supply chain in this country, we should count that too. Second, we must use what the state already buys. We're spending enormous sums on the energy transition and the components that sit behind those technologies. But the same is true of housing, of rail, of defense, of hospitals. We need to put more conditions on that money. We need to make industrial capability, resilient supply chains, local jobs, and real apprenticeships part of the deal. A public contract is one of the most powerful industrial tools the government has. Third, we've got to rebuild the way in. We must turn the apprenticeship levy back into a route for young people into work. And we've got to build that training backwards from the actual jobs that things like the energy transition and the broader industrial strategy have the potential to create in the places that it will create them. And fourth, we must let institutions take risk. Anyone who's built a business knows that there is no risk-free way to grow. You take risk because the reward is worth it. We don't currently have an efficient model for risk tolerance in growth-stimulating investments. It's why we find it easier to spend £25 keeping a young person on benefits than to invest getting them into work. It's also why we have to rescue industrial capabilities like steel, because it's actually easier to justify than riskier investments. We can definitely do more. It requires giving the body built for this a real mandate, with proper governance to make the long, patient bets the system is wired to avoid, and judge them over a decade, not a quarter. It doesn't mean losing the governance, just changing the frame and staying the course. None of that breaks a rule, none of it needs the world's permission. The energy transition is a great example of an anchor, the largest coordinated investment that we'll make in a generation. But the prize is

The Human Cost Of Caution

Speaker 11:09

bigger than energy. It's the chance to make industry broadly the platform that it once was. The place a young person without a degree can still build a life. Because there is a cost that spreadsheets never see. It's sitting in a town somewhere tonight, 18 years old, school behind them and nothing in front of them, waiting for a first chance that they may never reach. That's the real price of caution, a life that doesn't start. Tweaking our model will not reach that young person. Only changing it will. Milburn called it a generational fault line. What we need are the tools to help us cross it. This is how we build Britain. Thank you.