Ministers should cut welfare spending to fund more employment support if it wants to end the youth Neet crisis, the author of a government-led review has said.
Alan Milburn, the Tony Blair-era health secretary, told the Guardian he believed ministers should reduce benefits payments to help pay for more employment support, opening a potentially contentious debate within the Labour party over welfare cuts.
His intervention comes in the run-up to John Healey’s first budget, at which the chancellor is under pressure to explain how he will reduce a multibillion-pound black hole in the country’s finances and pay for more cost of living support without increasing borrowing.
“We’ve got to have a different conversation about the welfare system, it just isn’t working for young people,” Milburn told the Guardian. “We need to redistribute money from the welfare system to more employment support if we are going to end the Neet crisis.”
Milburn’s review of why so many 18- to 24-year-olds are not in education, employment or training calculated that a record 1 million young people are now classed as Neet. The former cabinet minister said this was far more than a cyclical youth unemployment problem – it was a “youth detachment” problem, pointing to the fact that 60% of these Neets have never had a job.
Ministers have pushed back Milburn’s final report until after the budget, at which Healey is expected to use a tax raid on banks to help pay for cost of living schemes such as a new energy support package.
The chancellor has signalled his willingness to spend more money on youth unemployment programmes in the short term, however, even if the welfare savings take longer to be realised. He announced a £100m “local apprenticeship service” at last month’s Labour conference, calling it “a downpayment on Alan Milburn’s work”.
In a joint interview with Peter Fonagy, the chair of the government’s landmark independent review of mental health, ADHD and autism, Milburn said his final recommendations were not just about tackling youth unemployment but also improving wellbeing.
“The Neet crisis is a health crisis,” he said. “We’re in this vicious cycle where ill health is driving higher Neet rates. Non-participation is a disaster for young people’s mental health.”
Milburn’s review is likely to recommend that employment, health and benefits support become more integrated. “We have got to change how the wealth, health and welfare systems work and how they interact with each other, because right now they’re plunging far too many young people into a life on benefits, which is ruinous to their life chances, rather than the opportunity to work,” he said.
“No one [in government] is responsible for ensuring that young people both avoid the trap door of becoming Neet and get support to get them out of being Neet.”
Fonagy’s review found that the number of people suffering mental distress has risen significantly across all age groups in England since the 1990s, especially the under-18s. It recommended providing help at the point of need, not after a diagnosis.
“The current system is based on identifying disability, why a person can’t do something,” Fonagy said. “We need a system that actually addresses their potential and what it is that they can do.
“If nothing is done, and the trends go on as up till now, then there will be not one in five young people with diagnosable mental disorders, but one in four,” which, he added, increased the chances of them becoming Neet.
While there will always be a group of young people whose physical or mental health mean work is not an option, “for the vast majority of young people with autism, ADHD, anxiety or depression, the starting point has to be what could you do, what would you like to do, and how can the state help them do it,” Milburn said.
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Young people with health needs should get prompt needs assessment, a personalised health plan and a wider “participation plan”, the review is likely to recommend.
The kind of transformation Milburn and Fonagy describe would cost hundreds of millions of pounds in investment, sources believe. While they would not comment on the level of funding required, both were clear that upfront money would be crucial. “I think everybody in government is very, very well aware of the need to invest behind this priority,” Milburn 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.”
“This is not a workshy, snowflake generation, you know, who are making mental distress up,” Milburn added. “If we provide more opportunities and we provide more support, the overwhelming majority of young people will take that, because that’s what they want. The system isn’t delivering what young people want, which is a job.”
But Milburn also hinted at possible consequences for those who don’t engage. “Equally, there has got to be an obligation on young people to take up those opportunities, of course,” he said.
The problem with the system was that it was “over-indexed to cash” and didn’t provide enough support, he added. “The consequence is calamitous for young people who could be working and are not being helped to do so, who then end up on a trajectory to a lifetime on benefits.”
But intervening earlier and providing better support would in turn help relieve the pressure on the mental health waiting list. “I would hope that, for the first time, we could also introduce a maximum waiting time for mental health services, particularly for young people,” said Milburn.
