The recent NEET report names a failure that has cost this country for decades. With the entry points into work being reshaped at speed, Britain faces a choice: build an actual system with human capabilities at its heart, or paper over the gap once more.

‘There is no system in Britain that takes young people from education into work as adults,’ Alan Milburn wrote in his interim report. ‘There are institutions, programmes and many good intentions. But there is no actual system.’ He calls the NEET crisis - over one million 16 to 24-year-olds not in education, employment or training - the most significant challenge facing the country. He is right. Six in ten of those young people have never had a job, a figure that was closer to four in ten twenty years ago. Apprenticeships have collapsed by 35 per cent over a decade.

But this is not only a crisis for young people. It is a crisis for all of us. Every experienced worker was once inexperienced. Every firm that strips out junior roles today is borrowing against a talent stock it will not replenish. The collapse of entry-level work is a productivity failure, a skills failure, an equality failure and a life chance failure- one whose costs fall disproportionately on young people now, but whose consequences compound across the whole economy over time. The OBR’s March 2026 Economic and Fiscal Outlook put a number on it: a £90 billion swing in public borrowing depending on whether AI adoption augments workers or displaces them. That is not a young people’s issue, but a national economic choice.

Those of us who worked on the Pissarides Review into the Future of Work and Wellbeing will recognise Milburn’s diagnosis immediately. The Review identified the fragmentation of pathways from education into good work as a structural failure with long-term consequences for productivity and equality. Britain has never built the connective tissue between learning and earning. It has layered programmes on top of a gap and called it a system. But Milburn’s interim report did not yet fully name what may be making the structural failures worse in real time.

The wrong kind of AI?

The economist Daron Acemoglu has spent years arguing that we are building the wrong kind of AI. Where technology augments workers, expanding what they can do, amplifying their judgment - the evidence shows higher wages and genuine gains that spread through the workforce. Where it automates tasks that workers used to perform, displacing labour rather than empowering it, the net effect is at best neutral and frequently negative. He calls the latter ‘so-so technology’: just productive enough to justify the investment, not productive enough to generate the demand that creates new jobs in return.

The AI being deployed in entry-level roles right now is highly likely to be the wrong kind, or rather, it is being implemented in the wrong way, for short-term gains. Document drafting, information gathering, basic analysis, routine customer interaction: these are the kinds of tasks AI handles best. They are also many of the tasks that used to constitute a first job, where a  young person learned the substance of afield, observed others, built relationships, made mistakes in lower-stakes environments, and became someone an organisation trusted with greater responsibility.  Removing this key stage of development does  not just reduce hiring, but also risks breaking the pipeline that produces the experienced workers every sector needs.

The Mayor of London’s Taskforce on AI and Jobs, chaired by Baroness Martha Lane-Fox and supported by the Institute for the Future of Work, has been in conversation with employers across financial services, legal, and the creative industries. What we hear is consistent: rising national insurance contributions are already making firms think twice about entry-level hiring, and AI can provide a tempting alternative. The double pressure of labour cost and automation capability is not theoretical. It is happening now, at the bottom of the labour market, in the spaces where young Londoners - and young people across Britain - are trying to get in.

Three things Britain must now do

Milburn’s solutions phase this autumn will need to match the scale of his diagnosis. That means going beyond welfare reform and mental health support - necessary as both are - to address the structural conditions actively narrowing the entry point into work.

First, build an actual system: people-centred, integrated, place-based, and co-designed with young people. Not new programmes layered onto the same gap, but a genuine work systems architecture connecting education, skills, health, transport and employer incentives. The Mayor of London holds this ambition. Government should task Milburn’s solutions phase with designing the national architecture that makes local systems possible.‍

Second, set rules for how AI enters the workplace, and require firms to reflect on the impacts of digital workflows. AI adoption decisions are currently made entirely at firm level, with little public interest requirement or worker voice. Research across more than 2,000 UK firms found that AI raises wages for the lowest-paid only where meaningful worker voice mechanisms exist. We need to distinguish sharply between AI which augments workers and AI which deskills and hollows out developmental roles. While the EU’s AI Act employment provisions point in this direction, Britain has no equivalent framework and must step up.

Third, devolve the tools to act. The Chancellor’s March announcement on fiscal devolution creates a genuine opening. Mayoral regions should be given powers to develop differentiated employer incentive schemes - targeted relief for firms that demonstrate real investment in young workers, with genuine progression builtin. London has the evidence base, the institutional architecture, and through the Taskforce, the ambition to be the first to pilot this.

Milburn has made visible the failure over decades to build a coherent system that takes young people from education into work. AI make the stakes higher and the window narrower. The wrong kind of AI deployed without design or accountability - risks entrenching these structural failures and making them permanent. The right kind, deployed with genuine worker agency and public interest requirements, could be part of the solution. The £90 billion OBR figure, the Pissarides findings, the Mayor’s real-time evidence from London’s labour market all point the same way. The UK can build the work system young people deserve, but only if these findings are acted on now, and only if the people most affected have a genuine voice in co-designing and building the future of work.