Burnham will push for benefits reform and knows it’s ‘absolutely necessary’, welfare tsar says

Andy Burnham is ready to overhaul the benefits system and knows it is “absolutely necessary”, according to the author of the report revealing the extent of Britain’s youth employment crisis.

Former health secretary Alan Milburn called on ministers to consider changes to the benefits system, saying youth unemployment costs Britain more than £125bn a year in a government-backed report.

Speaking at an event hosted by the Center for Social Justice (CSJ) think tank, Mr Milburn revealed he had held private talks with Mr Burnham and agreed the new prime minister would have the “appetite” to review welfare reforms during this parliament.

“I won’t get into what we discussed specifically, but everything I’ve seen from Andy makes it clear that he knows welfare reform is absolutely necessary,” he said at Monday’s event.

He added: “To be honest, I think the Parliamentary Labor Party and the new administration will definitely have the appetite for it.”

Any move by Mr Burnham to overhaul the benefits system will test the resolve of Labor backbenchers after their rebellion prevented Sir Keir Starmer from making £5 billion in cuts last year.

But the newly elected Makerfield MP, who is likely to become prime minister on July 20, may seek a reform-based approach rather than simple cuts, which could dampen opposition appetite.

Last year, under Sir Keir, the government was forced to make a U-turn by restricting the eligibility of its controversial plans to cut Personal Independence Payment (PIP) spending. If passed, the proposals would cut £4.8bn from the welfare budget. Instead, changes were introduced just to the health element of universal credit, aiming to save £2.3bn.

Ministers withdrew the legislation after more than 100 Labor MPs rebelled against the measures, prompting the government to announce it would instead launch a review into benefits, with disability minister Sir Stephen Timms also expected to report back in the autumn.

Commenting on the incident, Mr Milburn said the government had “misunderstood and wrongly framed the issue” by presenting the policy as a “pure cost mechanism”.

“I think the right way to frame this is what we’re trying to do in this review: ‘Look, you’ve got a huge welfare problem right now… the best and most sustainable way to do this is to make sure these young people have the opportunity to work, so they can be in work, pay their taxes and become less dependent on benefits.'”

His comments came after several Labor socialist rebels said: Independent Last week it was said Mr Burnham should ignore welfare cuts to plug the £4.7bn black hole left by Sir Keir’s defense spending plan.

Rachael Maskell, a key figure in last year’s backbench rebellion, said: Independent: “Ensuring financial security for disabled people and those on poverty wages must remain a principle of our social security system, and while it is right that Labor is doing everything possible to help people get into work to reduce demands on the DWP, cuts will simply displace spending.”

Mr Milburn presented his interim “diagnostic” report in May, highlighting that it is estimated that more than 1 million young people in the UK are not currently in employment, education or training (Neet). The official warned that this figure could rise to 1.25 million by the end of the decade if necessary steps are not taken.

This youth unemployment crisis costs the country around £125bn a year, he wrote, including £3.2bn spent on health and disability benefits for Neet claimants.

Its review also highlighted that the Department for Work and Pensions (DWP) spends £25 on youth welfare for every £1 it spends on helping young people get into work.

“So exactly what they want, which is support for business and the opportunity to do that, is exactly what the state doesn’t provide… so that’s how you provide welfare [reform]” he said at the CSJ event.

Welfare rights and disability advocates generally agree with Milburn’s reform mission, but argue that it cannot be achieved on the basis of cost-cutting alone.

James Taylor, strategy director at disability equality charity Scope, said last week: “A new Prime Minister will have many different options and ways to invest in defence.

“We don’t need to and shouldn’t balance the balance on the shoulders of disabled people.

“The benefits system needs reform, but reform cannot be code for cutting support. Life is more expensive if you’re disabled, and daily living costs remain stubbornly high.”