In light of Alan Milburn’s interim review and the Government’s plans for addressing NEETs, Farooq Mughal and Aneesa Zafar at the University of Bath examine changing pathways to work, shrinking entry-level opportunities and what policymakers can do to rebuild the career ladder in the age of AI.
For years, young people have been given a familiar message: get the right qualifications, develop the right skills and make yourself employable. Alan Milburn’s review of young people and work challenges this logic.
The interim Milburn Review shows that youth unemployment is not only a skills problem. The latest figures from the Office for National Statistics (ONS) show that around one million 16- to 24-year-olds in the UK are not in employment, education or training (NEET). Yet Milburn’s review finds that 84% want work, education or training, while 15% already hold a degree. The diagnosis is clear: this is not simply a problem of preparedness, but of a thinning “first rung” into work.
A skills problem or an entry problem?
The distinction between preparing young people for work and creating opportunities for them to enter work matters because the Government’s latest response risks treating a problem with the labour market as a problem with education.
Prime Minister Andy Burnham’s plans for technical pathways from age 14, linked to local labour-market needs and work experience, contain much to welcome. Stronger links between schools, colleges and employers could create clearer routes into work. But the Institute for Fiscal Studies warns that asking young people to specialise early carries risks. Local industries can decline; young people can change career interests and employers may not always be able to provide enough work placements.
More fundamentally, technical education cannot create labour demand. ONS data show that the number of UK job vacancies fell to 707,000 between May and July 2026. This is 2.7% lower than a year earlier and the lowest level in more than five years.
Research by the Chartered Institute of Personnel and Development (CIPD) also shows a long-term decline in opportunities that allow people to earn while learning. At the same time, jobs requiring intermediate-level skills, which can provide routes into longer-term careers, are becoming scarcer.
This shrinking of the labour market matters because becoming more “employable” cannot, on its own, create opportunities. Research on graduate employability has long shown that employment outcomes depend not only on individual skills, but also on the opportunities available and conditions of the labour market. The gap between qualifications and the availability of suitable jobs is visible in recent CIPD analysis, which found that the number of graduates in the UK has grown faster than the supply of highly skilled jobs. As a result, many graduates are working in roles below their qualification level.
The decisions employers make about hiring are therefore just as important as the skills young people bring to the labour market. The latest figures on UK jobs show that the sharpest quarterly fall in vacancies was among businesses employing fewer than ten people. The ONS reports that some firms are holding back recruitment because of rising labour and other operating costs. At the same time, economists warn that greater use of technology to automate work is putting pressure on some entry-level roles.
This creates a double pressure on young people. Employers are recruiting fewer newcomers, while technology is changing or removing some of the tasks through which previous generations gained their first experience of work.
AI and the first rung of work
Artificial intelligence (AI) may change the jobs available to young people, but it is also changing who gets through the door.
Milburn’s review documents how young applicants are facing automated CV screening, psychometric tests and recorded video interviews before meeting a human recruiter. A systematic review of algorithmic recruitment techniques such as these shows that they can pose risks of discrimination and raise concerns about whether recruitment processes are fair. The CIPD therefore advises employers to test automated screening against human assessment and use recruitment processes that are objective, structured and transparent.
But the challenge goes beyond how employers choose between applicants. It is also about the entry-level jobs they create.
As firms automate routine tasks and workflows, they may remove some of the work through which newcomers traditionally learn, observe colleagues and develop judgement. The International Labour Organization’s (ILO’s) latest review of generative AI identifies the erosion of opportunities for younger workers as an emerging risk.
This raises an important question for policymakers. If some of the tasks that once gave young people their first experience of work disappear, where will they gain the experience and judgement that employers expect them to have?
Policy implications: Rebuilding the first rung
The answer cannot be to choose between improving skills or creating jobs. Britain needs both better routes into work and more opportunities for young people to use those routes. A future-of-work policy therefore needs both supply and demand measures.
Technical pathways should remain broad and flexible. They should combine knowledge of particular occupations with digital skills and the ability to adapt, rather than train 14-year-olds too narrowly for today’s handful of vacancies.
But the Prime Minister’s new direction raises a wider question. After decades of deindustrialisation, the growth of a service and knowledge economy, and a major expansion of higher education, is directing more young people towards technical routes really the answer to the job crisis?
We argue the aim should not be to discourage university education. Instead, young people need credible pathways that reflect different talents and ambitions. This must go alongside support for small and medium-sized businesses (SMEs) and other employers that have traditionally provided young people with their first opportunities to learn how to work.
As we await Alan Milburn’s full report, due this autumn, there are several policy ideas worth debating.
First, the Government could make rebuilding routes into work an explicit policy objective. A taskforce bringing together employers, educators, policymakers and young people could help identify where these routes are breaking down and how to restore them.
Second, a “first rung” strategy could give employers greater incentives to recruit and train young people. It could also provide stronger opportunities for apprenticeships and work experience, alongside safeguards for the use of AI in recruitment.
Third, employers should reconsider inflated experience requirements and design entry-level roles around learning and progression. They should avoid an AI arms race in which applicants increasingly use AI to navigate recruitment systems while employers deploy more AI to screen them out.
The wider point is that responsibility for employability cannot sit with young people alone. Milburn’s review reminds us that if the first rung of the career ladder is disappearing, making young people better climbers will not solve the problem. Policymakers and employers need to rebuild routes onto the ladder itself.
All articles posted on this blog give the views of the author(s), and not the position of the IPR, nor of the University of Bath.
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