A sweeping overhaul of the British welfare system is set to be proposed by former Labour health secretary Alan Milburn, who has spent the last year evaluating how to support young people.
The review, which is expected to be published next week, aims to address the growing number of 18- to 24-year-olds currently classified as “Neet”—those not in education, employment, or training.
According to data from the Office for National Statistics, this group now includes just under one million young people, marking a 3% increase compared to the same period last year. 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.
Milburn’s recommendations suggest that under-25s should no longer be eligible for the health components of Universal Credit or the Personal Independence Payment (Pip). Instead, they would receive a basic rate payment equivalent to Universal Credit, supplemented in some cases by a new “additional cost allowance” designed to cover specific condition-related expenses. However, Milburn acknowledged that many claimants would receive less financial support under these proposed changes than they do under the current system.
In an interview with the Times, Milburn admitted that his plans, which are slated for potential government legislation in the new year, would not be “pain-free” for existing or new claimants. He argued that the current system prioritizes short-term financial support over long-term life prospects, a choice he deems incorrect. “I think what the current system does is it prioritizes the latter over the former,” he stated. “I believe that’s the wrong choice.” I believe that’s the wrong choice and it needs to be the other way around.
To mitigate the impact, the report recommends investing billions into robust employment support, such as work placements, job subsidies, and one-to-one personal advisers. Under the proposed “carrot and stick” framework, young people who fail to engage with these support services could face reductions in benefits. Milburn emphasized that “entitlements and responsibilities are two sides of the same coin,” adding that a deal is only meaningful if it carries potential consequences. 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.
While the reforms aim to break the cycle of poverty, Milburn acknowledged that the transition would require significant upfront investment to rebuild the system from scratch. He noted that it could take nearly a decade for the state to realize actual monetary savings. Individuals with severe disabilities who are unable to work would be protected under the new model, receiving a specialized benefit paid at a higher rate. According to he, Currently “you’ve got hundreds of thousands of young people stuck in a benefit system that is trapping them in poverty, giving them no prospect of prosperity or a job”.
The proposals are expected to receive backing from Prime Minister Andy Burnham, but they may trigger friction within the Labour Party, where some MPs have previously resisted welfare reforms. As the government seeks to balance budget pressures—including demands for increased defence spending—these measures represent a fundamental shift in how the state manages youth welfare. At a time when there is heavy political pressure for the UK to find the money to spend more on defence, the reforms would represent a radical overhaul of Britain’s welfare system.
A government spokesperson affirmed that while they remain committed to providing a safety net for the most vulnerable, the Prime Minister is clear on the need for wholesale change to invest in success rather than “paying for failure.”
