A benefit payment received by 260,000 young people in the UK “must be fixed”, officials have been told ahead of a major new report due out within days.
Senior Labour figure Alan Milburn will present recommendations to Prime Minister Andy Burnham on how to tackle the one million youngsters not in education, employment or training (NEETs). The publication, which could see PIP and Universal Credit cut or replaced according to reports, is expected to be sent to Downing Street next week.
Resolution Foundation's warning
As the Labour government prepares to work out how to get more young people into work, the Resolution Foundation, which has three former employees now serving as ministers, has sent a clear warning. In a new message issued on Wednesday, the think tank said: “Much of the attention on the final report will be on whether benefit support for young people is cut. But in our view the first thing to solve is the ‘left alone’ approach of the current benefit system.
“The 260,000 young people currently receiving Universal Credit Health (UCH) have no requirements to engage with support to help them move closer to work, education or training. This must be fixed, but not through more ‘work first’ conditionality that pushes unemployed recipients to take any available job as quickly as possible. Instead, we need a ‘career start’ approach – permanent, positive and personalised employment support that young benefit claimants are required to engage with.
“Interventions should meet each young person where they are, provide genuinely helpful support to enable them to progress towards work, training or education.”
Think tank's influence and proposals
The Universal Credit Health component is an extra Department for Work and Pensions payment for people with a health condition, disability or long-term illness. The think tank has serious influence on policy and politics in the UK. The Economist said last year that “to understand how Britain is run, walk away from Whitehall, turn right at the Houses of Parliament and head to 2 Queen Anne’s Gate.” This is the headquarters of the foundation.
Former recent members include current pensions minister Torsten Bell, Treasury minister Dan Tomlinson and housing minister Matthew Pennycook. Former senior cabinet minister David Willetts is the foundation’s president, while Sir Keir Starmer’s chief economic advisor was Minouche Shafik, previously co-chaired a Resolution Foundation inquiry, and the former PM’s deputy chief of staff in Downing Street, Vidhya Alakeson, also worked at the foundation.
In a new Substack posted on Wednesday ahead of Mr Milburn’s report, the foundation said that “much of the attention on the final report will be on whether benefit support for young people is cut”. It called for:
- Work to tackle the “huge gap” in education rates among the young in the UK compared to other wealthy nations, including more money for further education.
- Ensuring apprenticeship funding goes to young people, with the apprenticeship fund ringfenced for under-25s.
- Funding for the Youth Jobs Grants and Jobs Guarantee to be doubled to get an extra 40,000 young people into work.
- More money on work coaches, wage subsidies and training schemes.
Benefits and the Timms Review
The foundation also looked at benefits. The Financial Times reported recently that Mr Milburn is believed to be set to recommend that Universal Credit and PIP possibly be replaced for NEETs.
In calling for more funding for further education, the foundation said in its new post: “Can this be funded by a ‘tough love’ approach of lower benefit entitlement? Well, the total benefits bill for young people is £8.1 billion, so there is clearly a limit to any such hope at least in the short term (the fiscal benefits could be much bigger in the long run as upstream investment means the caseload falls).
“Added to this, receipt of UCH and/or Personal Independence Payment (PIP) currently protects 120,000 young people from poverty. But that doesn’t mean that savings are impossible. Recent RF research found that around one-in-five young people currently receiving PIP did not experience additional costs. Savings can be found here, though that’s more of a question for the upcoming Timms Review.”
The Timms review is looking at the future of PIP, an additional payment for people with a disability, or long-term physical or mental health condition. Sir Stephen Timms, its co-chair, said in his recent interim report that the benefit was “no longer fit for purpose”.
