Labour adviser says welfare should be curbed to get NEETs into work - as Burnham warns crisis among young people is 'economic catastrophe'

Andy Burnham is being urged to curb welfare to fund measures to get young people into work.

Alan Milburn, who is advising the Government on the NEETs crisis, said money needs to be 'redistributed' into jobs support. 

The intervention came as the PM insisted he is ready to 'invest' in the near-million youngsters not in education, employment or training. He described the situation as an 'economic catastrophe and a moral failure'.

But the idea of trimming welfare to free up funding could prove deeply controversial with Labour MPs - who previously killed off Keir Starmer's bid for reforms.  

Mr Milburn is expected to make a series of recommendations in a report due after the Budget.

Speaking to the Guardian, the former Cabinet minister said: 'We've got to have a different conversation about the welfare system, it just isn't working for young people.

'We need to redistribute money from the welfare system to more employment support if we are going to end the NEET crisis.'

Mr Milburn also called for employment, mental health and benefits support to be more integrated.

He said: 'Over the medium term, it is entirely possible that you can reduce the benefits bill, but in order to do that, you've got to provide the support for young people.

'You've got to increase the opportunities that are available for young people and then provide the support for them to enable them to grab those opportunities.'

Writing in the Times, Mr Burnham promised to take Mr Milburn's recommendations seriously, calling the number of NEETs 'an economic catastrophe and a moral failure'.

Pledging to guarantee young people support 'up front', he added: 'We face a choice. We either invest in the success of our young people or pay for failure through the benefits system. We cannot afford to do both.'

Every young person will be guaranteed a 'high-quality technical pathway, work placements, apprenticeships and the skills and experience they need to secure a good job' with 'timely, high-quality mental health support' available.

But that will be matched by an 'expectation that young people will take up the opportunities made available to them', Mr Burnham said.

The Tories have accused Labour of fuelling the NEETs crisis by ramping up costs for employing young people. 

An estimated 981,000 young people aged 16 to 24 in the UK were in the category between April and June this year, according to official figures - around one-in-eight of the age group. 

The Government will publish a series of 'jobs plans' for key sectors over the course of the week, beginning with the professional services and construction industries.

The plans will see 22,400 apprenticeships a year made available by accountancy, legal services and consultancy firms for under-25s.

Construction firms have agreed to make another 40,000 placements available.

Shadow business secretary Julia Lopez said: 'Labour have been a disaster for youth jobs.

'Their tax hikes and red tape have made it harder for businesses to hire, invest and grow, destroying opportunities for young people looking to take their first step on the career ladder.

'After increasing costs on employers and burdening firms with more red tape, Labour are now trying to paper over the cracks.'

Work and Pensions Secretary Pat McFadden said: 'Too many young people have been locked out of opportunities for too long. These commitments will help change that by creating clear pathways into apprenticeships, training and good jobs.

'It's encouraging to see even more industries backing young people with new opportunities to gain the skills, training and experience needed to succeed in the growing sectors of our economy.'