A government-led review is calling for a reallocation of welfare spending to support employment initiatives aimed at addressing the growing number of young people not in education, employment, or training (Neet). Alan Milburn, former health secretary and author of the review, urged ministers to cut welfare benefits and redirect funds toward programs that help young people enter the workforce.

Milburn highlighted that nearly one million individuals aged 18 to 24 fall within the Neet category, describing the phenomenon not merely as cyclical youth unemployment but as a broader “youth detachment” problem. He noted that about 60% of these young people have never held a job. According to Milburn, the current welfare system is failing to meet the needs of this demographic, particularly as a sharp rise in disability benefit claims linked to anxiety and mental health conditions has increased the strain on public finances.

Data indicate that claimants aged 16 to 24 make up nearly one-third of new disability benefit recipients for anxiety disorders, with over half of all new claimants under the age of 35. The personal independence payment (Pip), a benefit intended to assist those with long-term physical or mental health challenges, is increasingly claimed by younger individuals, raising concerns about its current effectiveness and suitability.

Milburn described the Pip system as “no longer fit for purpose” and proposed that a more integrated approach be taken, combining employment, health, and welfare services to better support young people’s wellbeing and work prospects. His forthcoming report is expected to recommend prompt health assessments, personalized health plans, and participation strategies tailored to the needs of young people with conditions such as autism, ADHD, anxiety, or depression.

The review emphasizes the cyclical relationship between mental health and unemployment, identifying the Neet crisis as also a health crisis. Milburn and Peter Fonagy, chair of an independent review on mental health and neurodevelopmental conditions, both stressed the importance of early intervention and support before disability diagnoses are made.

While the proposals for transforming support—including increased funding—would require substantial investment, Milburn indicated that over the medium term, these efforts could reduce welfare expenditures by providing young people with viable employment opportunities and assistance to obtain them. He also suggested that young people have an obligation to engage with available programs to benefit from this support.

The timing of Milburn’s final recommendations has been postponed until after the upcoming budget, with government officials facing pressure to address a growing welfare bill—projected to reach £100 billion annually by the end of the decade—and to explain plans for reducing public spending without increasing borrowing. Chancellor John Healey has indicated a willingness to increase short-term spending on youth employment schemes, unveiling a £100 million “local apprenticeship service” as part of efforts to tackle youth unemployment.

Overall, the review calls for a fundamental shift in the welfare system’s approach, moving away from benefit dependency toward an emphasis on employment and integrated mental health support, aiming to improve outcomes for young people and alleviate fiscal pressures.