Young people aged under 25 without severe disabilities could be offered employment support instead of £217 a month of Universal Credit under plans for a historic change to Britain’s benefits system.
Youth employment chief Alan Milburn will publish his long-awaited report about youth employment next week, in which he will recommend that Prime Minister Andy Burnham design a completely new and targeted social security system for young people.
It is part of Labour’s ambition to put “work over welfare” for young people and make it harder for them to be signed off for health reasons.
Instead of the health element of Universal Credit (UCH), which is worth £217 a month to new claimants, young people without severe work-limiting disabilities could be put on a new pathway and offered education, training and employment support to make sure that they do not end up signed off.
There are currently 260,000 young people receiving UCH, according to independent think-tank the Resolution Foundation. There is no requirement for them to engage with support to help them move closer to work, education or training.
As The i Paper has reported, Burnham and Work and Pensions Secretary Pat McFadden are expected to accept Milburn’s 200-page report in full.
Last week, while on a visit to Denmark to study their social security system, McFadden told The i Paper that he thought there was “merit” in Milburn’s idea of creating an entirely “distinct” system for young people. However, he suggested that he was undecided and open to discussion about the age range it would accommodate.
Milburn’s review addresses the welfare system across the UK, but while some of the recommendations can be imposed from Westminster, others would have to be agreed by the devolved governments.
A huge ‘reset’ of Britain’s welfare state
Burnham, Milburn and McFadden have all talked up the importance of “employment support” over unemployment benefits for young people, older job seekers and people with disabilities and health conditions.
However, they have also all suggested that moving to a European-style system where people are supported via subsidised job schemes could mean Labour has to spend money on reform before they can reduce Britain’s overall welfare bill.
McFadden and Burnham are agreed that the plan will require investment up front.
There is growing concern about the cost of Britain’s benefits bill. Total welfare spending is forecast to increase from £353bn this year to £431bn in 2031-32.
Just under half of this figure is spent on the state pension, which the Prime Minister has pledged to remove the triple lock on.
A lost generation of one million Neets
Milburn’s recommendations will come as almost one million people aged 16-24 are recorded as not in education, employment or training: Neet.
According to Milburn’s report, the most common conditions among young NEETs are mental health issues such as depression and anxiety, but there has also been a major uptick in the number reporting learning disabilities and autism, as well as physical conditions which present barriers to work.
Over the summer, Milburn travelled to the Netherlands to observe their education and employment support systems for young people.
The Netherlands, where the Neet rate is 4.8 per cent compared with 13.6 per cent in Britain, is seen as a blueprint for reform.
Milburn is expected to recommend a more locally targeted system of support like Denmark’s.
McFadden, who also went to see the Dutch system, has also been gathering information about how a devolved approach to young people’s employment support, education and training could work.
Milburn is expected to recommend that regional mayors are given more power to support young people in his new system.
The Netherlands and Denmark also take a more “tough love” approach to social security. In both countries, where employment rates are higher than the UK’s, state support is conditional on young people engaging with work, education and training programmes.
This is expected to become the case in Britain.
As well as taking young people out of the Universal Credit “health pathway”, Milburn is expected to recommend a system focused on what young people can do. This could be through a subsidised job – available through McFadden’s Jobs Guarantee Scheme, which will be expanded to young disabled people next year – or as part of a supported apprenticeship or training scheme.
Which young people might actually get more support?
Milburn’s report will come before another major report that is currently being compiled by Sir Stephen Timms with a view to making changes to the way disability benefits and assessments work.
While Milburn may recommend that some young people without severely work-limiting conditions are put on a different pathway, certain groups of “vulnerable” young people may actually get more “priority support” in the new system than they currently do.
These could include care leavers, young carers, teenage parents and young people leaving custody who are considered the most vulnerable Neets.
Milburn believes that care leavers, who have some of the highest Neet rates of any group, should receive sustained, personalised support, including cash, to ensure they are not pulled away from learning and work.
This could take the form of an Education Maintenance Allowance (EMA) style allowance of £50 a week for six months, for care leavers who are Neet or at serious risk of becoming so.
However, the support would be conditional on taking part in education, employment or training. This gives them breathing room to establish themselves, so financial pressure does not pull them away from learning and work.
Challenges ahead?
If they accept Milburn’s recommendations, McFadden and Burnham will need to convince Labour MPs to back their new system for young people.
They will then need to secure the funding for it from Chancellor John Healey.