Burnham and Milburn push youth welfare-to-work reform as Milburn review slips

With the Budget due tomorrow, Andy Burnham and Alan Milburn have put youth unemployment and the NEET crisis at the centre of the political debate. Nearly 1 million people aged 16 to 24 are not in education, employment or training, and the prime minister has described the situation as both an economic catastrophe and a moral failure.

Andy Burnham used an article in The Times to call for a clear guarantee of support for young people to get into work or apprenticeships. He said the welfare system would need big changes, with benefits becoming a backstop rather than a starting point. The argument was that too many young people have been left on benefits when they need support to train, work or gain experience.

Alan Milburn, the former Labour health secretary who is leading a government review into the issue, has gone further on funding. In an interview with The Guardian, he called for benefits to be cut to pay for more employment support for young people. He argued that money should be redistributed from welfare into employment support if the NEET crisis is to be ended.

The political debate is not simple. Labour MPs have previously revolted against welfare changes that looked like budget savings rather than reforms designed to help people into work. Panellists said a reframed argument about building a better system, with money moved into employment support and mental health support, could win more Labour support. But such a shift would not raise large sums in the short term, and the Budget has immediate pressures including defence, borrowing and other spending commitments.

The scale of the challenge was set out in reports from areas with high levels of unemployment and low educational attainment. In Rhyl on the North Wales coast, a youth boxing club is trying to build confidence, but young people said job applications often end in rejection. Wales has the highest NEET rate in the UK at more than 17%. In Erdington in Birmingham, which has the highest proportion of young people not in work in England, a support worker said graduates and people with health problems are among those struggling to find work. Business owners said they are inundated with applications and would take people on work experience, but training takes time and money. In Bradford, there are only 39 jobs for every 100 working-age residents.

Young people described the personal cost. One man in Rhyl who used to be a roofer had not worked for nearly four years because of anxiety and depression, and said better mental health support could help him return to work. Others said repeated rejections made them feel worthless and unable to pay bills or contribute. A former apprentice said schools push qualifications but do not tell pupils enough about apprenticeships, self-employment or freelance work.

Ministers want more young people to move into work through apprenticeships, and the Budget is expected to include measures to make hiring young people cheaper. One expected step is a slowdown in the increase in the minimum wage for young people to reduce costs for businesses. The government's Milburn Review, which was meant to set out a wider plan, has been pushed back until after the Budget, with publication now expected in the next couple of weeks.

The debate also exposed a wider argument about welfare spending. Some argued that social security spending is now far higher than defence spending and that small reductions could produce large savings. Others said the priority should be a supportive state that helps young people into education, training and work rather than cutting support. The common ground was that the NEET crisis is costly, but there is no agreement yet on whether the answer is more upfront support, welfare savings, or both.