Andy Burnham wants to cut the benefits bill – these are his main options

Andy Burnham confirmed that he wants to reduce welfare spending and stated that reforms to the welfare system will be reviewed under the Labor government.

The new prime minister said these reforms would mean “changing the nature of the support” offered, including making more awards “conditional”.

To talk BBCHe stated that this would mean “people taking advantage of the opportunities presented to them” to maintain the same right.

His comments pave the way for future welfare changes, but they are unlikely to be announced until two government-commissioned reviews – one into youth unemployment and the other into the Personal Independence Payment (Pip) – present their recommendations later this year.

These are unlikely to take the form of drastic changes to cut spending, as was the case with Sir Keir Starmer’s failed attempt in July last year. While Mr Burnham is currently hugely popular with MPs, he is likely to face the same resistance from backbenchers if a similar approach is adopted.

But the former Manchester mayor’s latest interview gives the strongest hint yet of the direction he wants to go on this issue.

Here are the options the prime minister could consider regarding welfare:

Benefit changes for young beneficiaries

Recent debates on welfare have clearly focused on young people.

Mr Burnham said in an interview with the BBC: “There are young people in their 20s in the help system who are quite severely let down by the lack of support when they should have had it.”

The former mayor also signaled that the government is considering more conditionality to restrict benefits to people who don’t take advantage of job opportunities when they are offered.

This is already a key part of universal credit (the UK’s most requested benefit, with 8.4 million people) and payments are reduced through sanctions for those who fail to carry out the required work-related activity.

However, these rules do not apply to beneficiaries who claim benefits for health reasons that prevent them from seeking or carrying out work. Meanwhile, it could be argued that Pip can move in and out of work.

As it seeks to reform youth benefits, Mr Burnham’s government is likely to reconsider proposals made by Labor last year to restrict the amount universal credit healthcare claimants under 22 can claim.

This plan has been shelved pending the results of ongoing reviews, but could be revived or amended if considered in line with their recommendations.

Mental health benefits overhauled

Disability minister Sir Stephen Timms found in his interim report on Pip that it was “no longer fit for purpose” in modern Britain.

This is partly due to an inability to cope with an increase in “fluctuating conditions” such as depression, anxiety or ADHD, the authors write.

Of the four million claimants in the UK, 1.56 million (39 per cent) have mental health-related conditions, making them the largest group receiving benefits.

This follows a rapid increase in claims since 2019; from 2.05 million in January of that year to 4.01 million in April 2026. During this time, spending on Pip has more than doubled from £15bn to around £32bn in 2025/26.

Proposals last year to change the Pip assessment criteria were criticized for making it de facto harder to claim, particularly for people with mental health problems.

It is unlikely any amendments would take a similar approach, with more than 100 Labor MPs rebelling against the plans. But Sir Stephen’s report’s focus on mental health conditions suggests some changes to mental health and its benefits can be expected.

Better support for business

While changes around mental health or young people might address some of the existing concerns about wellbeing, they also run the risk of increasing pressure elsewhere in the system.

Crucially, experts have warned that simply restricting aid without taking into account its effects on poverty and health would put further pressure on government spending.

Samuel Thomas, senior policy advisor at Z2K, said: “Where we often go wrong… is to have this kind of short-term mentality: ‘We need immediate savings, so we’re going to restrict eligibility.’

“Often these immediate short-term attempts to reduce benefits backfire, and then it becomes harder to actually achieve sustainable long-term reductions in spending.”

The benefits expert added that the prime minister’s criticism of crude oil cuts was “really welcome”.

“Last year’s attempted cuts to Pip also fell into this category. Not only does such a change have a very limited impact on helping people into employment, it could also lead some people into deeper crisis and further away from work.”

In his message, Downing Street argued that any welfare reform would be paired with significantly stronger support measures to help people, especially young people, into employment.

This approach could help reassure supporters who fear a repeat of last year’s chaotic welfare crisis; but the real test will come later this year, when both official reviews publish their final recommendations and Mr Burnham’s plan is unveiled.