Milburn’s report recommends shifting under‑25s away from health‑related benefits, adding a basic universal credit rate and a targeted allowance, while pledging billions for employment programmes.
The government-mandated review headed by former Labour health secretary Alan Milburn is set to be released on Tuesday. Its central thrust is to pull people younger than 25 out of the existing sickness and disability safety net – specifically the health element of Universal Credit and the Personal Independence Payment (PIP) – and replace it with a lower-rate allowance tied to the basic Universal Credit rate.
A supplementary “additional cost allowance” could be offered to cover daily expenses linked to a claimant’s condition, but many young people are expected to see a reduction in the total support they receive.
Key proposals and new benefit structure
Milburn’s draft recommends that under-25s will no longer be eligible for the health component of Universal Credit or for PIP.
Instead, they would receive a flat allowance matching the basic Universal Credit rate. For those with documented extra costs, a separate “additional cost allowance” may be granted. The report also earmarks a higher-rate benefit for the most severely disabled who are unable to work, preserving a safety net for the most vulnerable.
Crucially, the plan couples reduced cash payments with a “carrot-and-stick” approach: young claimants who refuse to engage with newly-funded employment support could lose part of their allowance.
Financial scale, investment promises and political backdrop
The review estimates that the total annual benefits bill for young people stands at roughly £8.1 billion. Milburn suggests that a substantial portion of this could be redirected into “billions” of new employment support – including work placements, job subsidies and one-to-one advisers – to help the estimated one-in-eight 18- to 24-year-olds who are currently NEET (not in education, employment or training). ONS data for the April-June period shows just under one million NEETs, a 3 % rise on the previous year. The review foresees a decade-long horizon before any fiscal savings become visible, given the need to “rebuild the system from scratch”.
prime minister Andy Burnham is expected to back the recommendations, while some Labour MPs – who opposed welfare reform under former leader Sir Keir Starmer – may push back. The government frames the overhaul as a response to the “heavy political pressure” to re-allocate funds toward defence, suggesting that a leaner benefits system could free resources for other priorities.
Potential impact on young claimants
Milburn acknowledges that the shift will not be “pain-free”. In his own words, “Candidly, it could mean that some people will get less financial support at the beginning of their benefit claim than under the current system.” Yet he argues that the current model favours short-term cash flow over long-term life chances, and that the new structure aims to flip that balance. Roughly 260,000 young people currently receive the Universal Credit health element without any engagement requirement; the review seeks to attach mandatory participation in the expanded employment programmes to that support.
For those with severe disabilities, the proposal retains a higher-rate benefit, preserving protection for the estimated 120,000 young people who currently rely on UCH or PIP to avoid poverty. Critics warn that cutting payments for many could exacerbate financial hardship, while supporters contend that the targeted investment in training and job placement will ultimately raise earnings and reduce dependence on state support.
