The government spends 25 times as much on benefits for young people than it does on supporting them into work, the author of a major review into youth inactivity has said.
Former minister Alan Milburn told the BBC that this was "shameful" and with nearly a million young people not in work or education (Neets), a complete "system reset" was needed.
In an exclusive interview with Sunday with Laura Kuenssberg, Milburn said it was absolutely essential Labour reformed the welfare system, even though the government had shelved some planned benefit reforms in the face of opposition from their own MPs.
The first part of his government-commissioned report into the issue will be published this week.
Milburn's calculations are based on the amount spent on 16 to 24-year-olds taking part in core employment programmes funded by the Department for Work and Pensions and Jobcentre Plus.
Spending on Welfare is based on the amount spent on key benefits like Universal Credit, PLP, Job Seekers' Allowance, PIP and Disability Living Allowance. The full methodology will be published in the report later this week.
The former Labour health secretary under Tony Blair was asked by the government to investigate why so many young people were in the position of not working, studying or taking part in training programmes - the highest level for more than 10 years.
There were 957,000 young people who were Neet in the UK from October to December 2025 - equivalent to 12.8% of people in that age category, according to the latest figures from the Office for National Statistics, released in February.
More than half of those were deemed to be economically inactive as they were not looking for work.
When Milburn's initial report is published this week he said it will conclude that the problem was a result of a widespread failure on behalf the state.
"This is a failure. This is the failure of the welfare system, but it's a failure, I'm sorry, of the school system, the skills system, the health system," he told the programme.
"We're not prioritising getting young people into a situation where they can be learning or earning and instead we're transporting them into the world of benefits with incalculable costs for their life chances."
He highlighted a central finding of the report on the disparity between the amount of money spent on supporting young people on benefits and how much goes into state-funded programmes to help them into work.
"What is shameful [...] is that as we've uncovered in the course of this review for every £25 that we spend keeping young people on benefits, we spend only a pound helping them get into work through employment support," he said.
Milburn's main recommendations to tackle the problem will be published later this year, but he said there had to be a system reset, part of which had to be reform of the benefits system.
Directly addressing those in the Labour Party nervous about reforms to welfare he said: "Labour is what it says on the tin.
"It's the party of work. Work gives purpose. Work gives income. Work gives meaning."
He continued: 'Welfare reform is absolutely essential and needs to be done. But as I said, it's got to be within the context of a wider set of reforms to state institutions."
In his report Milburn will also highlight the challenges young people face getting into work, concluding that the increase in mental health problems is real.
However, he will argue such diagnoses should not mean young people are not expected or encouraged into the work place.
He said there were fewer part-time jobs for young people, saying he had been sacked from his first job doing a paper round when he was 13 in Newcastle.
"Like all adolescent boys, guess what? I couldn't get out of bed," he said.
So he said he was sacked for not delivering the papers.
"It's the only time in my life so far, anyway, I've ever been sacked from anything." he said.
However he said he had learned from the experience.
"Effort and reward, there's something going on here and nowadays the number of young people who are actually in employment has been falling and it's been falling probably for about 25 years.
"Entry level jobs are disappearing, so the jobs that you used to be able to get for the first rung on the ladder, they've gone," he said.
