The UK government is preparing proposals to address rising youth unemployment by expanding back-to-work programmes, with plans expected to include restrictions on some sickness and disability benefits for people under 25.
Former minister Alan Milburn is due to submit a report and recommendations next week, outlining measures aimed at helping young people who are not in employment, education or training.
The proposals could involve redirecting some welfare funding towards employment support, although the suggested changes are expected to generate disagreement over how the programmes should be financed.
Official figures show that 981,000 people aged between 16 and 24 were not in employment, education or training during the second quarter of the year. They represented 13% of the age group, giving Britain the second-highest proportion of young people in this position in Europe last year.
The country’s youth unemployment rate stood at 15.6%, compared with 3.4% among older workers.
Milburn Proposes Changes to Youth Welfare Benefits
Milburn, an ally of Prime Minister Andy Burnham, warned in May that Britain risked creating a “lost generation” because of the scale of youth unemployment.
His forthcoming recommendations are expected to include preventing people under 25 from receiving ill-health supplements attached to standard unemployment benefits.
He is also expected to propose moving younger claimants to a more restricted version of the main disability benefit.
Milburn previously argued that government spending should move away from a system in which benefit payments receive 25 times more funding than employment support.
He wants more resources directed towards programmes that help people find work, drawing on approaches used in the Netherlands and other European countries.
Speaking to the Times on Thursday, Milburn acknowledged that his proposals could mean some people receiving less financial assistance.
He said implementing the changes would not be easy or free from hardship, adding that some people could receive reduced financial support.
However, the proposals are not expected to deliver an immediate reduction in the approximately £8 billion spent annually on benefits for young people.
Proposed Benefit Restrictions Could Face Labour Opposition
The plans could encounter resistance from Labour lawmakers, many of whom previously opposed efforts by former prime minister Keir Starmer to reduce welfare spending.
Those disagreements could create difficulties for the government as it considers changes to youth benefits.
Opposition parties have also accused Labour of prioritising welfare recipients over people in employment, making the proposed restrictions a potential political issue.
Training Programmes Reported to Improve Employment Prospects
Employment charity Generation has called for successful training programmes to be expanded to help more young people enter the workforce.
Michael Houlihan, the organisation’s UK head, said approximately 70% of participants on its courses secured employment within 12 months, around twice the average rate for comparable programmes.
He attributed the results to training that is designed around the specific requirements of employers and sectors with available vacancies.
Faisa Omar, 27, secured employment within a month of completing a 10-week Generation course focused on roles in the green energy sector in 2023.
Before joining the programme, she had applied for more than 500 jobs without success, describing the experience as being like “shouting into the void”.
Omar said she had an interest in climate change and sustainability but did not know how to find an accessible route into the green sector. The training helped her identify a career path and secure a job.
Artificial Intelligence and Hiring Restrictions Affect Young Workers
James Tuttiett, an executive at IT consultancy FDM Group, said artificial intelligence was contributing to reduced demand for junior employees in some sectors.
He described the situation as a “silent hiring freeze”, explaining that AI was increasingly capable of performing tasks previously handled by entry-level white-collar workers.
Tuttiett said FDM had been required to provide recruits with longer training before placing them with clients.
He also identified higher minimum wages and increased employer social security contributions as factors affecting recruitment decisions.
Differences Between UK and Dutch Employment Support
The reasons young people remain outside employment and education vary, with some lacking formal qualifications while others report health conditions that make finding work more difficult.
Nye Cominetti, an economist at the Resolution Foundation, said Britain’s welfare benefits were not particularly generous compared with countries that had lower proportions of young people outside employment, education and training.
However, he said young people receiving health-related benefits in Britain faced fewer requirements to participate in processes aimed at returning them to work.
Sonja Bekker, a professor of employment law at Utrecht University in the Netherlands, described a different approach used in her city.
Authorities send representatives to visit young people who are not in education or employment and offer assistance, including childcare arrangements and mental health support.
Vocational education in the Netherlands also gives many students practical workplace experience. Some begin placements lasting several months at the age of 17.
Around two-thirds of Dutch 16 and 17-year-olds have part-time jobs, compared with fewer than one-fifth of young people in the same age group in Britain.
Youth Unemployment Also Rising in the Netherlands
Despite its employment support arrangements, the Netherlands has also recorded an increase in the proportion of young people not in employment, education or training.
Artificial intelligence and taxation have been cited among the possible factors behind the trend.
Bekker said it remained unclear whether the increase represented a long-term development or a temporary change linked to the economic cycle.
The UK government is expected to receive Milburn’s recommendations next week as it considers changes to employment support and welfare arrangements for young people.
