Government report warns of ‘economic catastrophe’ as young people struggle with mental health

Former health secretary Alan Milburn has warned that Britain risks a “generational, societal and economic catastrophe” unless employers and government adapt to rising levels of poor mental health among young people. An interim review led by Milburn into the growing number of 16 to 24-year-olds not in education, employment or training argues that businesses will need to provide greater flexibility, pastoral care and mental health support to what he describes as an “anxious generation”.

The review was commissioned by Prime Minister Keir Starmer and examines why almost one million young people are currently outside education and work. According to the report, increasing levels of anxiety, depression and neurodiversity are major drivers of economic inactivity among younger adults.

Milburn said that many young people had grown up “rewired” by smartphones and social media, affecting sleep, concentration and social development. The report describes a “bedroom generation” spending long periods online and becoming disconnected from workplaces and wider society.

Research cited in the review found that 43 percent of economically inactive young people with long-term sickness or disability identified mental health as their main issue, compared to 24 percent in 2011. The proportion citing physical health problems has fallen over the same period.

The report argues that the welfare system was designed for a different era and now risks trapping people in long-term worklessness rather than supporting routes into employment. Milburn said welfare reform was “a necessity” not only because of the economic costs but because of the impact on young people’s life chances.

The findings also suggest employers may need to rethink how they support younger workers, particularly as labour shortages continue following a sharp decline in net migration. Milburn pointed to examples of employers adapting workplaces for neurodiverse employees, arguing that diagnoses such as ADHD or autism should not automatically prevent participation in work.

The review links worsening mental health trends to the pandemic, noting that current 16 to 24-year-olds experienced lockdowns and school closures during formative years. It also highlights concerns about poor sleep and excessive smartphone use among teenagers.

Milburn’s final recommendations, including proposals for welfare reform, are expected later this year.