A government-commissioned welfare review led by former Labour health secretary Alan Milburn will recommend removing young people under 25 from the main sickness and disability benefits system, according to reporting by BBC News. The overhaul, set to be published on Tuesday, would represent one of the most significant changes to Britain's welfare system in decades, though it is expected to prove controversial among Labour MPs who previously opposed similar cuts.
Under Milburn's proposals, under-25s would no longer be able to claim the health element of universal credit or personal independence payment (Pip). Instead, they would receive an allowance at the same basic rate as universal credit, with some eligible for a new "additional cost allowance" to cover day-to-day expenses related to their conditions. Those with more severe disabilities unable to work would receive a benefit paid at a higher rate. Many claimants would receive less financial support under the plans, which the government intends to introduce into legislation in the new year.
Milburn, who served as a Labour MP from 1992 to 2010, has been tasked by the government with addressing a significant challenge: nearly one in eight 16 to 24-year-olds in the UK are not in education, employment or training—a group known as "Neet". Just under one million young people fall into this category, according to data from the Office for National Statistics covering April to June, representing a 3% rise on the same period the previous year.
The review comes against a backdrop of substantial spending imbalance. The government's interim review indicates that only around one in five NEET young people in England receive meaningful employment support through the welfare system, while the Telegraph reports that young people who do not engage with offered employment support could lose some benefits.
What would change for young people?
Under the new system, young people would face a combination of incentives and penalties. Milburn has indicated that the reforms would involve what he describes as "carrot and stick" elements, where young people could lose some of their benefits if they did not engage with additional work support options. In a statement to the Times, Milburn acknowledged that his plans would not be "pain-free" and would affect both existing and new claimants.
Milburn told the Times about his approach:
"Candidly, it could mean that some people will get less financial support at the beginning of their benefit claim than under the current system. But actually, for young people, there's a different debate that we've got to resolve, which is whether the priority is their longer-term life chances or just their immediate shorter-term finances. I think what the current system does [is] it prioritises the latter over the former. I believe that's the wrong choice and it needs to be the other way around."
He further stated:
"A deal isn't a deal unless there are potential consequences. Entitlements and responsibilities are two sides of the same coin."
What employment support would be offered?
To offset the reduction in benefits, Milburn's report is expected to recommend substantial investment—running into billions—in employment support for young people. This would include work placements, job subsidies, and one-to-one personal advisers. The review is also expected to call for immediate mental-health support for people with mild ADHD, autism or anxiety, according to reporting by the Telegraph.
Milburn has described the current system as one that traps young people in poverty with no prospect of employment or prosperity.
"You've got hundreds of thousands of young people stuck in a benefit system that is trapping them in poverty, giving them no prospect of prosperity or a job,"he said. The new system, he added,
"will need significant investment" and would involve "rebuilding the system from scratch".
Why is this controversial?
Labour backbencher Bell Ribeiro-Addy has expressed serious reservations about the proposals. She told the BBC that she was "not sure" she could vote to cut the benefit entitlement of existing claimants, noting that opposition to welfare cuts had been a significant factor in a welfare rebellion among Labour MPs the previous year.
Ribeiro-Addy also highlighted a practical concern about the impact on disabled young people already in work.
"I don't think you get a disabled young person into work by taking away the money that helps them get into work,"she argued on BBC Radio 4's Today programme. She pointed out that Pip often enabled disabled people who were already employed to maintain their independence.
The proposals represent a shift from the government's previous stance. Prime Minister Andy Burnham had previously rejected welfare cuts proposed by opposition parties, describing them as "crude". However, Milburn's recommendations are likely to be backed by Burnham, though this could prove divisive within the Labour party.
What is the financial picture?
The reforms would require significant upfront investment before generating savings. If Milburn's recommendations were approved, it could take almost a decade for the British state to see monetary savings from the changes. This reflects the substantial cost of the employment support infrastructure that would need to be built.
Milburn's interim report, published on 28 May 2026, had already highlighted the scale of the problem, describing a deeper issue of young people becoming detached from the labour market and warning of a "lost generation". That interim review estimated that £4.4 billion of £8.1 billion spent on key benefits for young people went to NEET young people, illustrating the concentration of spending on those outside the workforce.
What has the government said?
Housing Minister Matthew Pennycook told BBC Breakfast that while he could not confirm the specific contents of the report, he backed the "principle" of providing more intensive employment support to those out of work.
"The prime minister has been very clear the status quo isn't working – we need a new settlement for young people… tinkering will not do it,"he said.
A government spokesperson stated:
"We will always ensure there is a safety net for the most vulnerable and those who are unable to work."
What happens next?
The government is expected to set out its response to the Milburn and Timms reviews in the coming weeks. If approved, the proposals would move into legislation in the new year, marking a fundamental restructuring of how the welfare system supports young people not in education or employment.
