Minister says 'fundamental reset' of system needed as NEETs review looms

A minister has told Sky News a "fundamental reset" of the system was needed to help 16 to 24-year-olds not in education, work or training (NEET).

It comes ahead of the publication of a major review by Alan Milburn aimed at tackling the rise in youth unemployment, with the number of NEETs topping one million earlier this year for the first time in over a decade.

Mr Milburn is expected to call for under-25s to no longer be able to claim the health element of universal credit or personal independence payments, moving them to a "youth allowance", paid at the same level as the standard rate of universal credit.

Work and Pensions Secretary Pat McFadden insisted that proposed changes to benefits from the review are "very different" to plans previously brought forward by Sir Keir Starmer.

Mr McFadden told Sky News' Sunday Morning With... David Olusoga: "It's a different proposition from last year, and I hope that parliament views it in that light."

He added that "it's one of the biggest problems facing the country, and I think we're not going to be able to tackle it unless we have a fundamental reset of our system".

"We need to re-orient the system," Mr McFadden said. "It's not enough to just give people a monthly income."

Proposed changes would place "much more emphasis" on getting support in place before changing benefits, he said.

Mr McFadden said Mr Milburn's review, due to be published next week, recommended a "number of changes", including giving more support to those who are severely disabled.

Seemingly addressing those in his party who have questioned whether it is right to change the entitlements young people get, Mr McFadden said: "It is not as though the status quo is leading to a good life."

"We are the party of labour, we are the party of work," he said.

Andy Burnham has called the politically sensitive report a "watershed" moment but stopped short of promising to accept its recommendations in full.

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Former Labour health secretary Mr Milburn was commissioned by Sir Keir's government to carry out the review after it was forced to water down its own welfare plans in the face of a backbench revolt.

Shadow work and pensions secretary Helen Whately told Sky News that the NEETs situation "got worse under this government".

"There are 60,000 more NEETs under Labour, and I talk to employers who really want to employ young people and they tell me they just cannot afford to hire people.

"They can't take a risk on young people at the moment and that is because of this government's policies."

(c) Sky News 2026: Minister says 'fundamental reset' of system needed as NEETs review looms