Call for overhaul of UK welfare system for young people
Young people with “non-work-limiting” health conditions such as anxiety and depression should cease receiving cash benefits, according to a major report from the Tony Blair Institute for Global Change (TBI). The report advocates for a radical overhaul of the UK’s welfare and employment systems to address a rising crisis among youth who are not in education, employment, or training (Neet), reports BritPanorama.
The TBI’s key proposal suggests redirecting welfare payments for certain under-25s into mental health treatment, skills training, and job placements. This shift could impact eligibility for both The Personal Independence Payment (Pip) and the health element of Universal Credit.
According to the TBI, the existing welfare model is fostering long-term inactivity by providing financial support without promoting workforce participation. This sentiment aligns with comments from Alan Milburn, who is conducting a government-commissioned review into youth unemployment.
The number of young people classified as Neet remains concerning, hovering just below one million, albeit with a slight decline from 1.01 million to 981,000 between April and June. Milburn has deemed the current situation a “catastrophic system failure,” asserting that many young individuals are getting trapped in benefits despite a strong desire to work.
Disability campaigners have voiced concerns regarding potential recommendations from Milburn’s report, speculating that it may suggest benefit cuts for younger claimants. More than 40 charities, including Action for Children, have urged that any changes be oriented towards support and opportunity, eschewing punitive methods that have proven ineffective.
In response to the TBI report, Abdi Mohamed from the disability equality charity Scope cautioned that removing benefits from young disabled individuals could push many into deeper poverty rather than assisting them in entering the workforce. He emphasized the need for government initiatives to help disabled youth through investment in options such as apprenticeships and flexible job opportunities.
New Prime Minister Andy Burnham has committed to reducing the UK’s welfare expenditure, which is expected to reach £77.1 billion for health benefits in 2025/26, growing from £36 billion in 2019/20. However, his spokesperson clarified that this reduction will not entail “crude cuts” that would lead to further crises.
Changes to Pip, Britain’s most claimed health benefit, are anticipated later this year following a review by disability minister Stephen Timms, which gained momentum after 100 Labour MPs defied proposals to restrict the benefit previously.
The TBI report also highlights the rising costs associated with hiring young people, noting a 40% increase in the cost of employing an 18-year-old since 2015. It suggests that the government halt Labour’s plans to equalize minimum wage rates for younger and older workers, citing that the lower minimum wage for 18-year-olds in the Netherlands has contributed to a significantly lower Neet rate of just 4% compared to the UK’s 13%.
Ryan Wain, senior director at TBI, stated: “Britain has a Neets crisis and the government is right to make it a priority. But getting young people ready for work – in terms of training, support, and skills – is only the easier part of the problem.”
Wain pointed to economic stagnation and layered policy issues as compounding factors, making the hiring of young individuals both more costly and risky for employers. He concluded that a more effective approach is necessary, where backing young people is coupled with strategies to simplify hiring processes for employers.
A government spokesperson reiterated their commitment to welfare reform focused on opportunity, stating that recommendations from the Timms and Milburn reviews will be pivotal for future changes. Initiatives already underway include the creation of more youth apprenticeships and financial incentives for businesses to hire unemployed youth.
