The British Chambers of Commerce (BCC) is warning of a lost generation unless the Government urgently tackles the jobs crisis among young people.

It says immediate action is needed to remove barriers preventing almost a million people in Generation Z from engaging with work, education and contributing to society.

Among the recommendations in a new report, published today, the BCC is calling for ministers to:

• Invest in support to help young people into work
• Support SMEs to take on and train young people
• Increase workplace health support for firms to address staff health problems early and keep people in jobs
• Set a target of reducing the proportion of young people not in employment, education of training (NEETs) to that of the Netherlands

The report has been produced by the BCC’s People and Work Challenge Group, drawing on expertise from Chambers, Business Council members, think tanks and charities.

It highlights that the economic benefit of tackling the NEET challenge could add £69bn to UK output. And it calls for Government to align its response to the issue across all departments as the problem is likely to worsen in the short term.

The report also calls for business to look for ways to open up employment opportunities to young people, as just 13% of firms currently have specific recruitment, training or retention plans for under 25s. SMEs in particular are missing out on the benefits of a targeted approach to youth employment.

Data from the Office for National Statistics shows the number of NEETs has risen by more than 110,000 between the end of 2023 and 2024. In October to December 2024 there were 987,000 NEETs. This included 392,000 unemployed and 595,000 economically inactive.

Research by the Kings Trust shows that one in four people classified as NEETs would like to work but cannot, due to mental health problems. More than half (52%), said the longer they were unemployed the harder they were finding it to get work, while 45% said being out of work meant they had lost confidence in their skills.

Shevaun Haviland, Director General of the British Chambers of Commerce, said: 

“The UK’s active workforce is rapidly ageing, while the number of young people who are not in employment, education or training is at its highest level for a decade.

“Generation Z face a double whammy of increasing barriers to entering the workforce, and reducing opportunities as the number of vacancies continues to fall.

“But research shows the longer we leave this pool of talent to drift away from the workplace the harder it becomes for them to engage.

“The government has recognised the issue, with schemes such as the Youth Guarantee and its post-16 strategy, but a more collaborative approach is needed across different departments to deliver the change needed.

“Employers recognise that they also need to step up to the plate. But the rising tide of cost pressures from the Employment Rights Bill, rising National Insurance Contributions and the National Living Wage, are making this increasingly difficult.

“Government must support SMEs to take on more young people and train them for the jobs of the future. Chambers are already playing a role by bringing businesses and education bodies together to fix the disconnect. But unless more comprehensive action is taken a whole generation is at risk of being cut loose from society.”