Labour needs ‘system reset’ to tackle youth unemployment, report to say | Youth unemployment

A government report has warned that Labor is failing to tackle rising youth unemployment and must launch a “system reset” that includes a new initiative to overhaul health and disability benefits.

Alan Milburn, who is conducting a review into why nearly a million young people are not in education or employment, said ministers had so far responded with a series of disconnected employment programmes.

“It’s going in the wrong direction,” Milburn said. “When you look at this picture, I think our conclusion is that this was a catastrophic system failure.”

He said efforts to support young people on education, health and Labour’s youth guarantee were “very welcome steps”. But he criticized Keir Starmer for lacking a coherent strategy.

“My question is: Who is connecting the dots? If ever there was a case for mission-based government, this is it,” he said.

“Is this climbing a ladder? [job market] A service where everyone stands behind a common goal and where participation is a priority? So every young person should be given the opportunity to earn and learn. And the answer to that question is: that’s not what happened.”

In a highly anticipated report due to be published on Thursday, the former Labor health minister will say the government must take a new approach to overhauling Britain’s youth welfare and job support system.

Official figures due on Thursday are expected to show the number of young people not in education, employment or training (Neet) is close to surpassing one million, as experts warn of a crisis in youth affairs.

Britain has the third highest rate of 16-24 year olds neither earning nor learning among rich European countries.

The figures come under pressure from business leaders who claim Labor’s £25bn increase in employers’ national insurance contributions by chancellor Rachel Reeves and an attempt to equalize minimum wages between younger and older workers have contributed to rising youth unemployment rates.

Tasked with leading an inquiry into the causes of record unemployment and inactivity among 16-24 year olds, Milburn’s interim report will focus on how Britain’s schools, skills system, health services, welfare support and labor market can be changed to boost youth employment.

In an interview with the Guardian, Milburn urged Labor not to shy away from benefits changes after Starmer was forced into a chaotic U-turn last year over his plan to cut billions of pounds from disability support. Ministers also appointed social care minister Stephen Timms to lead a review of disability benefits.

Some economists warn that welfare spending is rising at an unsustainable rate due to pressure on government finances. But charities say the cuts could push vulnerable individuals into poverty amid a cost-of-living crisis.

Milburn criticized Labor’s previous attempts to prioritize cost savings over health issues and outcomes for disabled people. He said any measures to cut welfare support would need to be balanced with increasing employment support to help those looking to find work.

“Obviously it went wrong and I think there was a lot of soul searching involved,” he said.

“If you frame welfare reform from a cost-focused perspective, guess what you get? That’s not the way to approach this.”

“This is needed for moral reasons rather than financial reasons. It cannot be right that young people who want to work are not supported in this regard.”

Milburn said the welfare system should “obviously” protect those who cannot. “This cannot be changed, it cannot be transferred,” he said.

But he said the current health and disability benefits system was failing many young people who had never worked, and many could be helped to find work instead with more help from employment services.

“I don’t believe in this thesis that just because you have a diagnosis, one way or another, you have to launch yourself into the world of benefits rather than the world of work. Tens of thousands of disabled people prove every day that a diagnosis should not limit your desires and passions in life.”