Young people who rely on benefits are set to be given less money in exchange for more intensive health and job support under plans to tackle the youth unemployment crisis.
The measures are expected to form part of Alan Milburn’s review into how to support the nearly one million 16 to 24-year-olds not in education, employment or training (Neet).
The final instalment of the former Labour health secretary’s report is set to be delayed until November to avoid its findings overshadowing John Healey’s inaugural Budget later this month.
In an interim report published in May, Milburn outlined the causes of the youth joblessness crisis and paved the way for a package of recommended reforms to be set out in his final report.
Earlier this month, The i Paper reported that young people who fail to take up intensive support to help them into work will face benefit sanctions under Milburn’s plans.
In August, this paper also revealed that the former Cabinet minister was considering whether to recommend giving cash payments to particularly vulnerable young people who faced a high risk of becoming Neet, such as teen parents and those leaving young offender institutions.
Job and health support to replace cash payments
According to the Financial Times, Milburn’s report will argue that cash payments are not helping young people find work, and in some cases they disincentivise them from looking for a job, keeping them out of the labour market for longer.
Milburn is set to recommend that young people should instead be offered job support, such as schemes which match those who are ready to work with employers, the newspaper reported.
The proposed system is likely to be more expensive in the short term, with the review recommending significant extra spending on helping young people get into work.
They would be required to take up the support as a condition of receiving benefits under the plans.
Under one version of the proposals, a new assessment process could lead to cash and support being given to under-25s that replaces incapacity benefits through the universal credit health element.
Plans to remove the universal credit health element for under-25s – including existing claimants – and replace it with an intensive back-to-work scheme have also been reported by The Guardian.
Whether the plans will also cover personal independence payments (PIP) for disability is yet to be clarified.
Milburn warned of a ‘lost generation’ on current trajectory
Milburn’s interim report found that nearly half (45 per cent) of young people who are Neet in the UK reported having a disability – more than doubling from 21.1 per cent in 2013/14.
Milburn also accused the UK of a “whole-system failure”, with every £25 spent on benefits for every £1 spent on employment support for young people in 2024/45.
He warned that on its current trajectory, the UK risked a “lost generation” who had never known work.
The interim report identified a range of factors behind the crisis, including a drop in entry-level jobs, and a deterioration of the mental health of young people.
However, Milburn said the diagnosis of conditions like anxiety or depression should not automatically mean people leave the workforce, adding that the majority of young people who are Neet are looking for work.
There were 981,000 people aged 16 to 24 in the UK who were not in education, employment or training (Neet) between April and June 2026, according to the latest figures published by the Office for National Statistics (ONS).
That marked a minor drop from the first three months of the year, when it was over one million. But it has risen by 3 per cent compared to the same period last year, when 951,000 young people were Neet.
Work and Pensions Secretary Pat McFadden has said that 90,000 fully funded jobs for 18- to 24-year-olds will be created by 2029 through the Government’s Jobs Guarantee scheme.
The new jobs will form part of the Youth Guarantee programme – a £2.5bn drive to tackle youth unemployment, which will also include the creation of 150,000 paid and unpaid work experience placements with major brands.