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.
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
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.
‘Benefits will become the backstop, not the starting point,’ he wrote.
‘The system will no longer begin by establishing which benefits a young person is entitled to. It will begin with their ambitions and the help they need to achieve them.’
Northern Ireland Secretary Chris Bryant flatly refused to answer questions about welfare as he appeared on the BBC’s Today programme this morning.
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.
An estimated 981,000 young people aged 16 to 24 in the UK were NEET between April and June this year, according to official figures – around one-in-eight of the age group
‘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.’
Labour Adviser Calls for Welfare Reform to Get NEETs Into Work as Andy Burnham Warns of an Economic Catastrophe
Britain’s growing concern over young people who are not in education, employment or training has reignited a difficult debate within Labour over welfare reform, unemployment and the future of the country’s workforce. As pressure mounts to tackle economic inactivity, a Labour adviser has argued that welfare support should be reconsidered to encourage more young people into work, while Greater Manchester Mayor Andy Burnham has warned that the crisis facing young people risks becoming an economic catastrophe.
The debate highlights a major challenge for the government: how to help young people find meaningful employment without pushing vulnerable people into deeper financial hardship. With employers seeking suitable workers and many young adults struggling to establish stable careers, the question is no longer simply about benefit spending. It is about whether Britain can create a system that gives young people the skills, opportunities and support they need to build independent lives.
The term NEET refers to young people who are not in education, employment or training. The group is not uniform. Some are actively searching for work, others face health conditions or disabilities, while some have caring responsibilities, lack qualifications or live in areas where suitable opportunities are limited. Treating all these circumstances as identical risks producing policies that fail to address the underlying causes of inactivity.
Nevertheless, the scale of the challenge has attracted growing political attention, particularly as the government faces competing demands to improve public finances, increase productivity and support economic growth.
Labour faces difficult questions over welfare
For Labour, welfare reform presents a complicated political balancing act. The party has traditionally emphasised the importance of social security and public services, while also arguing that employment can provide financial security, independence and a route out of poverty.
However, governments face pressure when benefit spending rises alongside concerns about workforce participation. Critics argue that the welfare system must do more to help people return to employment and that support should be linked to realistic expectations wherever possible.
Those who favour tighter conditions often contend that long periods outside the workforce can damage confidence, reduce professional skills and make returning to employment more difficult. They argue that welfare policy should encourage people who are able to work to take advantage of available opportunities.
But reducing support does not automatically create jobs or remove barriers to employment. A person who cannot find affordable childcare, lacks access to reliable transport or has a long-term health condition may be unable to take up a position even when financial incentives change.
The central question is therefore whether welfare reform can encourage employment while providing adequate support for those who need it.
A successful approach would need to distinguish between people who could enter work with practical assistance and those who require specialist help, rehabilitation or a longer period of support. Without that distinction, stricter rules could increase hardship without delivering a lasting improvement in employment figures.
Andy Burnham warns of an economic catastrophe
Andy Burnham’s warning about the crisis among young people adds urgency to the discussion. His description of the situation as an “economic catastrophe” reflects concerns about the long-term consequences of allowing large numbers of young adults to remain disconnected from education and employment.
Young people who struggle to secure their first job can face disadvantages that continue for years. A delayed start to a career may mean lower earnings, reduced pension contributions, limited opportunities for promotion and fewer chances to develop professional networks.
The consequences can extend beyond individual households. When young adults are unable to contribute their skills to the economy, businesses may struggle to recruit, productivity can suffer and public finances may come under additional pressure.
Long periods of inactivity can also affect confidence and wellbeing. Regular employment provides more than a wage for many people: it can offer routine, social contact, experience and a sense of progress. Losing access to those opportunities can make the transition into work increasingly difficult.
Burnham’s warning points towards a wider issue than the immediate cost of welfare payments. If young people become detached from the labour market at the beginning of their working lives, the country may lose years of potential economic contribution.
However, the phrase “economic catastrophe” is a political assessment rather than a precise economic measurement. The severity of the problem needs to be evaluated through evidence on employment rates, vacancies, skills, regional inequalities and the circumstances of young people who are not working or studying.
The policy response must be based on those differences rather than relying on a single description of the crisis.
Should welfare benefits be reduced to encourage employment?
The argument for reducing welfare support is likely to generate strong disagreement. Supporters say that financial incentives matter and that benefit systems should not unintentionally make employment less attractive. They believe that clearer expectations, regular engagement with employment services and consequences for unjustified non-compliance can encourage more people to seek work.
From this perspective, welfare reform should focus on helping people move from benefits into sustainable employment rather than allowing temporary unemployment to become a long-term situation.
Yet opponents warn that cutting benefits can make it harder for people to prepare for work. Searching for a job may involve transport costs, suitable clothing, internet access, training fees or childcare. A person whose income has been reduced may find it more difficult to meet those expenses.
There is also a distinction between someone who refuses a suitable job without a reasonable explanation and someone who wants to work but cannot overcome practical barriers. A policy that treats both situations in the same way could punish people for circumstances beyond their control.
For young people, the risk is particularly important because many have limited savings and little employment experience. Losing financial stability can make it harder to complete training, attend interviews or relocate for work.
The effectiveness of welfare reform should therefore be judged by whether it produces sustained employment, not simply whether it reduces the number of people receiving benefits.
If a reduction in welfare payments leads to more people securing stable jobs, the policy may achieve one of its intended objectives. If it merely pushes people into poverty, insecure work or administrative gaps in support, the apparent savings may come at a significant social cost.
Why young people are struggling to enter the workforce
The difficulties facing NEETs cannot be explained by one factor. The transition from education to employment has become challenging for some young adults because of a combination of economic, educational and personal circumstances.
One problem is the mismatch between qualifications and available jobs. Employers may report difficulty recruiting people with particular technical skills, while young jobseekers struggle to find entry-level positions that provide the training needed to progress.
Another challenge is the cost of living. Housing, transport and childcare expenses can make low-paid work financially unattractive, particularly when jobs involve irregular hours or lengthy commutes. In some areas, a lack of affordable housing can prevent young people from moving closer to employment opportunities.
Health-related barriers can also play a role. Some young people need support with physical disabilities, mental health difficulties or other conditions before they can sustain regular employment. For them, effective assistance may involve gradual entry into work, specialist advice or flexible arrangements.
Educational disengagement is another concern. Young people who leave school without qualifications or vocational skills may face a narrower range of employment options. Improving careers advice, apprenticeships and access to further education could help prevent some of these difficulties from developing.
These factors suggest that the government needs a coordinated response involving employers, schools, colleges, local authorities and employment services.
Apprenticeships and training could offer a way forward
One potential solution is to expand high-quality apprenticeships and vocational training that connect young people directly with employers. Such programmes can provide practical experience, recognised qualifications and a clearer route into paid work.
However, the quality of these opportunities matters. Training that does not lead to a credible qualification or realistic employment prospects may leave participants no better prepared for the labour market.
Employers also need reasons to invest in inexperienced workers. Financial assistance, simpler recruitment processes and stronger links with local education providers could help businesses create entry-level opportunities, particularly in sectors facing persistent skills shortages.
Local programmes may be especially valuable because employment barriers differ across the country. An area with a shortage of technical workers may require a different approach from a community where retail, hospitality or manufacturing jobs have declined.
Local leaders can help identify those differences and bring employers, colleges and public services together. But programmes must be assessed carefully to establish whether they create additional employment or simply move people between existing schemes.
The goal should be to help young people progress towards lasting independence rather than repeatedly transferring them between short-term interventions.
The financial consequences for Britain
The economic argument extends beyond the immediate cost of welfare. When young people remain outside employment for long periods, the country can lose potential tax revenue and productivity while facing additional demands on public services.
The longer the disconnection continues, the harder it may become for some individuals to return to work. Skills can become outdated, professional confidence can decline and employers may be less willing to recruit applicants with lengthy gaps in their employment history.
These consequences are not inevitable. With appropriate support, many young people can return to education, acquire qualifications or secure employment after a period of inactivity. Early intervention may be more effective than waiting until someone has spent years disconnected from the workforce.
For the government, this creates a strong argument for evaluating policies over the long term. Immediate savings from reducing benefit payments should be considered alongside the potential cost of higher poverty, weaker skills and reduced future earnings.
Likewise, investment in employment support should be measured against its results. Public spending alone does not guarantee success, and programmes need clear objectives, effective administration and evidence that they help people move into suitable jobs.
A balanced assessment would examine employment outcomes, wage progression, job retention and the experiences of participants rather than relying exclusively on headline benefit figures.
A political test for Labour
The dispute places Labour in a difficult position. The government must demonstrate that it takes economic inactivity seriously while reassuring the public that vulnerable people will not be abandoned.
A policy focused exclusively on benefit reductions could be criticised for ignoring the practical reasons people are unable to work. On the other hand, a system that provides financial support without effective routes into education or employment may fail young people who need help building their futures.
Labour must therefore explain what it expects from benefit recipients, what assistance it will provide and how it will measure success. Clear eligibility rules, accessible employment services and realistic pathways into work could help make the system more effective.
It will also need to explain how its approach differs for people who are ready to work, those who need training and those who cannot currently work because of serious health or caring responsibilities.
That distinction is central to public confidence. Voters may support measures designed to help people become economically independent while opposing policies that leave people without the means to meet basic needs.
For Burnham, the challenge is to turn his warning into practical proposals that address the causes of youth inactivity. Identifying a serious problem is only the beginning; the next step is demonstrating which interventions can deliver measurable improvements.