Milburn Review to Cut Benefits for Some Under-25s

Almost one million young people in the UK are not in education, employment or training — and Alan Milburn's year-long government review, publishing Tuesday, will propose paying some of them less in benefits to fix it.

The review, commissioned to tackle the one in eight 18- to 24-year-olds classified as "Neet", will recommend moving under-25s off the main sickness and disability benefits, the Times reported. Office for National Statistics data from April to June puts the Neet total just under one million — a 3% rise on the same period last year.

Milburn, Labour's health secretary in government and an MP from 1992 to 2010, said Wednesday night his plans would not be "pain-free" and would hit both existing and new claimants.

What does the review propose?

The report's core recommendation bars under-25s from claiming the health element of universal credit or personal independence payment (Pip). Instead, they would receive an allowance at the same basic rate as universal credit.

The package has four main components:

• Under-25s moved off Pip and the universal credit health element onto a basic-rate allowance
• A new "additional cost allowance" for some claimants, covering day-to-day costs tied to their conditions
• Billions of pounds invested in employment support: work placements, job subsidies and one-to-one personal advisers
• A new benefit paid at a higher rate for those with more severe disabilities who cannot work

Many claimants would receive less under the plans. The government intends to take them forward into legislation in the new year.

Why does Milburn say cuts are necessary?

Milburn framed the trade-off as long-term prospects versus short-term cash.

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

"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."

He was blunt about the current system's failures: "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."

What happens if young people refuse the support?

The proposed system carries a carrot-and-stick design. Young people could lose part of their benefits if they don't engage with the extra work support on offer.

"A deal isn't a deal unless there are potential consequences," Milburn said. "Entitlements and responsibilities are two sides of the same coin."

How much will it cost — and when does it pay off?

Not soon, and not cheaply. If approved, the reforms could take almost a decade before the British state sees monetary savings. Milburn said the new system "will need significant investment" and would involve "rebuilding the system from scratch."

The timing matters politically. Britain's welfare system faces heavy pressure as the government hunts for money to increase defence spending. Prime Minister Andy Burnham is likely to back the recommendations, but Labour MPs — who opposed welfare reform under his predecessor Sir Keir Starmer — could resist.

A government spokesperson said: "We will always ensure there is a safety net for the most vulnerable and those who are unable to work. But the prime minister has been clear that we need a wholesale change in the way we support young people to grow up in this country, where we invest in their success rather than paying for failure."

Legislation in the new year will show how far Burnham is willing to test his party on welfare.