Some under-25s should get fewer benefits, Milburn review to say

Some young people could see reductions to the benefits they are entitled to under a radical overhaul of the welfare system to be recommended by a government-commissioned review.

As reported in the Times, Alan Milburn’s year-long report, to be published on Tuesday, is expected to recommend moving under-25s off the main sickness and disability benefits.

Milburn, a former Labour health secretary, has been tasked by the government with helping reduce the one in eight 16 to 24 year-olds in the UK who are not in education, employment or training – otherwise known as “Neet”.

He said on Wednesday night that his plans would not be “pain-free” and would affect both existing and new claimants.

His report is expected to say that under-25s should no longer be able to claim the health element of universal credit or personal independence payment (Pip).

Instead, they would receive an allowance on the same basic rate as universal credit.

Some could be eligible for a new “additional cost allowance” to cover day-to-day costs related to their conditions.

Some claimants would receive less under the plans – although the exact amounts will not be clear until early next year, when the government publishes legislation to implement the changes.

People can claim Pip to help them with the additional cost of being disabled or living with long-term physical or mental health conditions. It is available to those both in and out of work.

Of the four million people claiming Pip in England and Wales, around 430,000 are aged between 16 and 24.

In his interim report, Milburn said survey data found that 19% of young people claiming disability or health benefits were in work.

Milburn, a Labour MP from 1992 to 2010, is also expected to recommend an investment of billions into more employment support for young people, including work placements, job subsidies and one-to-one personal advisers.

Those with more severe disabilities and unable to work would get a new benefit paid at a higher rate.

Milburn told the Times: “Candidly, it could mean that some people will get less financial support at the beginning of their benefit claim than under the current system.

“But actually, for young people, there’s a different debate that we’ve got to resolve, which is whether the priority is their longer-term life chances or just their immediate shorter-term finances.

“I think what the current system does [is] it prioritises the latter over the former. I believe that’s the wrong choice and it needs to be the other way around.”

Just under one million young people in the UK are Neets, data from the Office for National Statistics (ONS) from April to June suggests. This was a rise of 3% on the same period last year.

Milburn’s recommendations are likely to be backed by Prime Minister Andy Burnham but could prove controversial among Labour MPs, who opposed welfare changes last year under his predecessor Sir Keir Starmer.

Bell Ribeiro-Addy, one of the Labour backbenchers who revolted against Starmer’s proposed reforms last year, said she was “not sure” she could vote to cut the benefit entitlement of existing claimants, adding that opposition to this idea had been a factor in last year’s welfare rebellion.

“I don’t think you get a disabled young person into work by taking away the money that helps them get into work,” she told BBC Radio 4’s Today programme.

In his Times interview, Milburn acknowledged that changing the rules for existing claimants would be “difficult politically” but stressed it was necessary.

Disability groups have welcomed extra employment support, but expressed concern that disabled young people could lose out.

James Taylor, from disability equality charity Scope, said Pip was a “lifeline” for young disabled people and restricting access to it “won’t make young disabled people’s extra costs disappear”.

Harriet Edwards, from the charity Sense, said changes were “long overdue”, but that without additional details families were “deeply anxious” about what they could mean for them.

A government spokesperson said: “We will always ensure there is a safety net for the most vulnerable and those who are unable to work.”

The reforms would represent a radical overhaul of Britain’s welfare system, at a time when there is heavy political pressure for the UK to find the money to spend more on defence.

Both the Conservatives and Reform UK have argued for significant cuts to welfare, including to fund a boost to defence.

If Milburn’s recommendations were approved, it could take almost a decade for the British state to see monetary savings.

The new system “will need significant investment” and would involve “rebuilding the system from scratch”, Milburn said.

His new proposed system would involve an element of carrot and stick, wherein young people could lose some of their benefits if they did not engage with the extra work support options.

In an interview recorded on Tuesday, Skills Minister Jacqui Smith told the BBC that young people had a “responsibility” to take up employment support.

“It is a contract. People need the chance, and they need to take that chance,” she added.

A separate review – co-chaired by disabilities minister Sir Stephen Timms – examining disabilities benefits is also expected to be published this month.

Sign up for our Politics Essential newsletter to keep up with the inner workings of Westminster and beyond.