Why tackling the NEETs crisis means trusting places to deliver: learning from Europe

The interim findings of Alan Milburn’s review into youth worklessness make for a sobering reading of the UK labour market and the lack of coordination of public service delivery between tiers of government. Nearly one million 16-24-year-olds in the UK are not in education, employment or training - one in eight young people in 2025, and predicted to rise to one in six by 2030. The report’s central diagnosis is not that young people have changed for the worse, but that the institutions built to support their transition into adulthood have not adapted to fit the current generation – one facing a different labour market, different health profiles and different patterns of disadvantage. Education, health and welfare systems each measure activity rather than outcomes, and responsibility for the journey from school to sustained work is dispersed across more than fifty national programmes and seventeen public bodies, with no single institution accountable for the whole picture.

This is the same fragmentation we see across a range of public services, including employment support, skills, health and housing: national government holding the levers while local places absorb the consequences of national design failures. Labour markets, transport, employer relationships are all local issues. Yet English mayors and combined authorities have been handed coordination responsibilities without the comprehensive fiscal levers, data access or institutional control that would allow them to act on place-based needs.

An outlier of youth disengagement

Youth unemployment is a striking manifestation of these policy concerns. From an international lens, the UK – with its 13.3% NEET rate for 16-24-year-olds in 2025 – performs worse on average than higher income countries in the OECD. Compared to the EU’s average NEET rate, which sat at 9% in 2025 for 15-24-year-olds, the UK has now become an outlier in youth disengagement from education and employment, with only Romania performing worse in 2025.

Why the Netherlands and Denmark do better

The most striking comparator to the UK is the Netherlands, where the NEETs rate for 15-24-year-olds sits at around 4.1%, against an EU average of 9% and a UK rate well above that. What makes this comparison so useful is that Dutch young people report similarly high levels of anxiety to their British counterparts - so the gap is not simply explained by differences in underlying mental health concerns. The explanation lies substantially in institutional design.

Back in 2004, the Netherlands introduced significant reforms to support youth employment, including through the establishment of the Work and Social Assistance Act. This legislative step marked the beginning of the devolution of welfare and social assistance from central government to local authorities. Since 2015, Dutch municipalities have held further integrated responsibility for youth unemployment and benefits under the ‘Participatiewet’ (Participation Act), with financial risk-sharing built in: with employment-related social assistance being fiscally decentralised, councils that fail to move young people into work bear more of the resulting benefit cost themselves. The Netherlands also introduced the Premium Subsidy for Young Workers – a scheme delivered through local authorities, guaranteeing fiscal incentives for enterprises hiring young individuals eligible for unemployment benefits. This also reflects on the wider picture of UK spending on employment support – in 2011 (when the latest data was available), the UK spent 0.01% of its GDP on employment subsidies in comparison to 0.5% of GDP in the Netherlands.

Technical education as a foundation of employment

The high employment rates have also been strengthened by a strong vocational education system and tailored career guidance and support, with technical education being considered as the ‘foundation’ of the Dutch economy, with around 40% of the population having obtained a vocational qualification. In 2024, only 22% of young 18-21-year-olds in the UK were on vocational courses, compared to 35% in the Netherlands and Denmark.

Building systems, not schemes

Denmark also tells a similar story. Its NEET rate for 15-25-year-olds sits at around 8.4%. Since 2019, Danish municipalities have held legal responsibility for ensuring every young person under 25 has a single coordinated plan spanning education, employment and wellbeing, delivered through permanent local ‘youth centres’ - that fuse job-centre, careers guidance, health and social work functions under one roof and one budget.

The potential of this programme is not lost on those working on youth support at the local level in England. A similar pilot was delivered in Havant Council in the UK through the Economies for Healthier Lives programme, where the council partnered with the local DWP job centre to support 16-24-year-olds into training and employment through delivering a youth club. This club became a focal point for multiple services – from work placements to mentoring and bursary support – and significantly boosted outcomes, with over 300 young people supported into employment and a projected £26 million in wider service savings over a five-year period.

The difference is that in Denmark, the youth centre programme is not a time-limited pilot – a pattern too familiar in the UK – but is a standing local infrastructure, funded year on year, with the institutional memory and employer relationships that come from long-term policymaking. English local authorities have to build from scratch what Danish municipalities treat as a baseline. And that gap, between what local areas can deliver with the right levers and what they are often tasked to do, is exactly what Milburn’s review identifies as an institutional failure.

Regional coordination to shape labour supply

Regional devolution in Denmark also acts as a key accelerator for tackling the NEET crisis. The five regions in Denmark, through their Regional Employment Councils, are responsible for coordinating between local authorities, employers and trade unions, as well as determining vocational education programmes for NEETs, and ensuring employment support provided by municipalities aligns with national labour market needs.

Finland’s Ohjaamo one-stop guidance centres, part of the Finnish Youth Guarantee, operate on a similar principle - jointly funded and jointly staffed by municipalities and national employment services, with a single keyworker following each young person across service boundaries. These centres have allowed devolved authorities to pool young people’s issues – on employment, education, health, wellbeing and access to benefits – into one system, recognising the fragmentation of youth services and allowing for a multi-component design of public services and cooperation between various tiers of government and the public authorities.

What these countries have that England doesn’t

Three features recur across these models of youth employment support. First, fiscal accountability sits with the institution best placed to act early - when local government bears part of the cost of failure, a focus on prevention becomes a rational and necessary choice. Second, local and regional authorities hold comprehensive data on their full youth population, not just those who happen to claim benefits, allowing them to tailor solutions to both local needs and central government agendas. Third, the infrastructure is to support young people is permanent. Britain’s history, by contrast, is one of repeated and reactive crisis-response programmes - the New Deal, the Future Jobs Fund, Kickstart - each abolished once the immediate crisis passed, and with the institutional capacity built around them lost over time.

Combined authorities in England are well-placed to play the coordinating role which municipalities across Europe have built into their permanent infrastructure. This can happen on the conditions that they have full sight of NEET populations in their local areas, have the proper data-sharing agreements in between local authorities, and have stable multi-year funding in place. Without these things, successful pilots such as in Havant may deliver brilliant results, yet risk being erased from institutional memory and replaced by new pilots trying to achieve the same outcomes.

The case for genuine devolution

The diagnosis of the Milburn Report points clearly toward the kind of reform needed at the core of governance in the UK: a devolution model that transfers fiscal risk, data and institutional control together, not responsibility alone. Mayors and combined authorities already prove – despite current constraints - that local and regional coordination on public service delivery can work. Given the examples the Dutch, Danish and Finnish models describe, local government could be given more tools to deliver for their places. It is clear that to tackle the NEETs crisis in the UK, there needs to be clear and long-term reform of public services and collaboration between tiers of government, rather than another national scheme layered onto an already incoherent system.