Chambers of commerce are warning of a lost generation unless the Government urgently tackles the jobs crisis among young people.
A new report, just published by the British Chambers of Commerce, shows that immediate action is needed to remove barriers preventing almost a million people in Generation Z from engaging with work, education and contributing to society.
Among the recommendations in the report the BCC is calling for ministers to:
- Invest in support to help young people into work
- Support SMEs to take on and train young people
- Increase workplace health support for businesses to address staff health problems early and keep people in jobs
- Set a target of reducing the proportion of young people not in employment, education of training (NEETs) to that of the Netherlands
The report has been produced by the BCC’s People and Work Challenge Group, drawing on expertise from chambers, Business Council members, think tanks and charities.
It highlights that the economic benefit of tackling the NEET challenge could add £69bn to UK output.
And it calls for Government to align its response to the issue across all departments as the problem is likely to worsen in the short term.
The report also calls for business to look for ways to open up employment opportunities to young people, as just 13% currently have specific recruitment, training or retention plans for under 25s. SMEs in particular are missing out on the benefits of a targeted approach to youth employment.
Data from the Office for National Statistics shows the number of NEETs has risen by more than 110,000 between the end of 2023 and 2024. In October to December 2024 there were 987,000 NEETs. This included 392,000 unemployed and 595,000 economically inactive.
Research by the Kings Trust shows that one in four people classified as NEETs would like to work but cannot, due to mental health problems. More than half (52%), said the longer they were unemployed the harder they were finding it to get work, while 45% said being out of work meant they had lost confidence in their skills.
Suzanne Caldwell, managing director of Cumbria Chamber of Commerce and lead for Cumbria’s Local Skills Improvement Plan, said: “The situation here in Cumbria is significantly less bad than the national picture.
“There were 306 young people classed as NEET in February 2025, which is 22 fewer than in January. Of these 209 NEETs were in Cumberland and 97 in Westmorland & Furness.
The NEET rate in Cumbria was 2.9% in February, down 0.2 percentage points from January and down 0.1 percentage points from a year ago. The rate was 3.5% in Cumberland and 2.1% in Westmorland & Furness compared to a national rate of 5.1%.
“But those Cumbria figures do hide pockets of particular challenge and we’re failing our young people if we don’t address them.
“It’s also imperative for our businesses that we get as many people as we can into the workforce – young and less young. Cumbria’s working age population is too small for our needs. The UK’s active workforce is rapidly ageing, and particularly so here in Cumbria, while the number of NEETs nationally is at its highest level for a decade.
“Research shows that the longer we leave this Generation Z pool of talent to drift away from the workplace the harder it becomes for them to engage.
“The government has recognised the issue, with schemes such as the Youth Guarantee and its post-16 strategy, but a more collaborative approach is needed across different departments to deliver the change needed.
“Employers recognise that they also need to step up to the plate. But the rising tide of cost pressures from the Employment Rights Bill, rising National Insurance Contributions and the National Living Wage, are making this increasingly difficult. In addition the Employment Rights Bill will make it harder for employers to give people a chance.
“Government must support SMEs in particular to take on more young people and train them for the jobs of the future. Chambers are already playing a role through Local Skills Improvement Plans by bringing businesses and education bodies together to fix the disconnects.
“But unless more comprehensive action is taken a whole generation is at risk of being cut loose from society.”
