Who exactly will be affected by the UK review of benefits for young people?
With nearly 1 million young people not in education, employment or training (a cohort known as “Neets”), the government and its advisers have signalled that welfare benefits may be cut to fund more job support for them. What may change and who will be affected?
Why are politicians talking about Neets?
Ministers are expected to make a major policy announcement in November on plans to tackle what has been called a “generational challenge” and a “moral crisis” – the persistent number of young people in the UK who are out of work, not in college or training, or economically inactive. The head of the government-commissioned review of young people and work, Alan Milburn, has been vigorously preparing the ground in media interviews for what he has hinted will be a major – and potentially controversial – overhaul of employment and benefits support for young people.
Who are Neets?
An estimated 960,000 16- to 24-year-olds are currently classified as Neet according to official estimates – around one in eight young people – with this number forecast to rise to 1.25m by the early 2030s. Although the concept of Neets has been around for more than three decades, Milburn has warned the current cohort are different: not simply jobless but estranged from the world of work. Some 45% of 24-year-old Neets have never had a job. He says urgent action is needed to prevent this group becoming a “lost generation”.
What is the cause of this crisis?
It is partly the labour market: fewer entry-level roles and apprenticeships for young people, a decline in “Saturday jobs” that leave them less prepared for work, and in many areas, few decent job opportunities of any kind. It is also about the failure of state institutions – schools, the NHS, the welfare system – to prepare them for work. And, says Milburn, it is crucially about the increasing number of young people with “work-limiting health conditions” who he says have become economically marginalised because of their anxiety, depression or neurodevelopmental conditions such as autism.
Why is reform of welfare needed?
Milburn says that while the welfare system is not the cause of the Neet crisis, it exacerbates it by failing to provide enough meaningful advice and support to young people, especially those with health conditions. Plenty want to work, but job centre interactions with young people are often limited and “administrative” – paying their cash benefits – rather than providing a springboard for them to participate in work or training. The Department for Work and Pensions (DWP) does have two major employment schemes, the Youth Guarantee and Pathways to Work, with budgets of around £6bn over three years, but Milburn is sceptical about their ability to reach Neets.
Why does the government say it needs to cut benefits for young people?
In theory, ministers could invest in new and improved employment support schemes aimed at Neets without cutting benefits. But they insist benefit savings are needed to fund their vision. They say disability benefit spending on 16- to 24-year-olds – currently £800m a year on universal credit health and £3.2bn on personal independence payment (Pip) – is spiralling out of control. In addition, Milburn is adamant that the design of disability benefits can “trap” young people with incomes of £2,000 a month, while incentivising them not to look for work. For every £1 the DWP spends on employment support for young people, £25 is spent on benefits, says Milburn – a ratio he says must be rebalanced.
What benefits will be cut or reformed, how – and who will it affect?
Ministers and Milburn alike are tight-lipped about any changes, but they are likely to focus on universal credit health and Pip, and the mood music is they will be radical. There is speculation either or both could be cut entirely or dramatically restricted. Some on the right have called for benefits to be removed for young people with so-called “mild” mental health or autism conditions, though because most young Pip claimants have multiple conditions this is unlikely to save significant amounts. A parallel review of Pip by welfare minister Stephen Timms has ruled out means-testing of Pip. Milburn said young people with complex and enduring disabilities will be exempt from any benefit cuts.
What are the risks of cutting disability benefits for young people?
Campaigners say better job support is essential – but cutting benefits for a cohort already on low incomes will simply drive up poverty and hardship, making it harder for them to get a job. They argue that in many areas there simply aren’t the jobs or opportunities, however comprehensive the job support. Around a third of the 1 million Neets are not claiming benefits, so in theory any changes won’t affect them. The political risk for ministers is that changes spark a repeat of last year’s backbench rebellion on disability benefit cuts, which forced a humiliating government U-turn.
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