New report reveals young people nearly five times more likely to be out of work

Young people with mental health conditions are nearly five times more likely to be economically inactive compared to others in their age group, according to new analysis published today [Thursday 20 March] by the Keep Britain Working Review.    

Statistics in the report also show around a quarter of those who are economically inactive due to ill-health are under the age of 35 – illustrating how early barriers are impacting many of those who may be beginning their work journey or developing. 

The findings are part of the review's Discovery Phase report, as former John Lewis boss Sir Charlie Mayfield examines the factors behind spiralling levels of inactivity, and how government and businesses can work together to tackle the issue.  

The Keep Britain Working Review was announced as part of the Get Britain Working White Paper which set out the biggest employment reforms for a generation to get Britain working and unlock growth as part of the plan for change. It also includes plans for overhauling job centres, empowering mayors and local areas to tackle inactivity, and delivering a Youth Guarantee so all young people are either earning or learning  

Today's report sets out the economic inactivity challenges facing the UK and how this compares to other countries. It finds that:  

• There are 8.7 million people in the UK with a work-limiting health condition, up by 2.5 million (41 per cent) over the last decade, including 1.2 million 16-34-year-olds and 900,000 50-64-year-olds   

• These figures show young people (16-34-year-olds) with mental health conditions are 4.7 times more likely to be economically inactive than their cohort   

• Those who are out of work for less than a year are five times more likely to return to work compared to those who are out of work longer  

The report also highlights the potential economic benefit of better prevention, retention and rapid rehabilitation: it finds that tackling sickness absence and ill-health related economic inactivity through these measures could be worth £150 billion a year to the economy.  

Chair of the independent review, Sir Charlie Mayfield, said:       

“Our initial report published today confirms the scale of rising economic inactivity and what's driving it. It underlines the urgency that we tackle this challenge by improving prevention and retention of those in work and by creating better pathways back into work for those who are economically inactive.   

“It's a problem that can and must be addressed by government and employers together. Even at this initial stage of the review, we have found inspiring examples of employers making a difference that's literally life changing for some people. We need more of these on a greater scale and, in the next stages of the review, we will be engaging with many organisations to establish how that can be achieved.”   

Secretary of State for Work and Pensions, Liz Kendall, said:   

“We must do far more to help people stay in work and get back quickly if they fall out. That's why, as part of the reforms in our Pathways to Work Green Paper and our Plan for Change, we are making a decisive shift towards prevention and early intervention.  

“We want to help more employers to offer opportunities for disabled people, including through measures such as reasonable adjustments, and we are consulting on reforming Access to Work so it is fit for the future.  

“I want to thank Sir Charlie for this report. It shows the potential for what government and employers can do together to create healthier, more inclusive workplaces, so we build on the great work some businesses are already doing.”    

Separate research also suggests that if the UK could reduce the number of young people who are not in education, employment or training by a third, to match Germany's rate, UK GDP could increase by 1.8% in the long-term (equivalent to £38 billion) – underpinning why health and disability reform to get Britain working is central to unlocking growth and delivering on the Plan for Change.  

The government has already hit the ground running on prevention to address the mental health challenges young people are facing and ensure they get the treatment they need. This includes investing £26 billion in the NHS, including in mental health services and recruiting an additional 8,500 mental health workers across child and adult services to reduce delays and provide faster treatment. 

We have already helped almost 70,000 people with mental health issues back into employment last year as part of the expansion of the Talking Therapies programme, up more than 60% on the year before and we are continuing to expand the programmes so more people can benefit from treatment.  

The report sets out the main areas for the next stage of engagement – where in the coming months written submissions and face-to-face engagements with businesses and stakeholders will gather evidence to develop recommendations to come in Autumn.  

The government has also put in place measures to make work pay and more secure, to help keep more people in work and support employers with retention. 

This includes through the Employment Rights Bill which will and strengthen workers' rights protections, including expanding Statutory Sick Pay to 1.3 million of the lowest earners who previously received nothing, ensuring employees have the right to payments from the first day they are ill – so no one has to choose between their health or staying in work.  

We are also increasing the National Living Wage from April, benefiting 3 million of the lowest paid full-time workers by up to £2,500 and introducing a Youth Guarantee to ensure every young person is either learning or earning.  

This Discovery report comes as the Work and Pensions Secretary set out the largest welfare reforms for a generation this week to help those sick and disabled people who can work into jobs - backed by £1 billion investment.  

This includes consulting on delaying access to the health top up in Universal Credit until someone is aged 22, with savings reinvested into work support and training opportunities through the Youth Guarantee.  

These range of measures also include scrapping the controversial Work Capability Assessment that drives people into dependency and introducing the biggest package of new employment support including an early support conversation to stop an inactivity spiral.    

The new measures are designed to ensure a welfare system that is fit for purpose and available for future generations – opening up employment opportunities, boosting economic growth and tackling the spiralling benefits bill, while also ensuring those who cannot work get the support, they need as part of the government's Plan for Change.  

This will end years of inaction, which has led to one in eight young people not currently in work, education or training and 2.8 million people economically inactive due to long term sickness – one of the highest rates in the G7.   

All this has driven the spiralling benefits bill, forecast to reach £70 billion a year of spending on health and disability benefits for working age people by the end of the decade, or more than £1 billion a week.