Milburn review proposes local fund for some young disabled people

Alan Milburn's review of youth unemployment will recommend that some young disabled people lose Personal Independence Payments (PIP), the disability benefit, and apply to a local fund instead. Milburn is scheduled to deliver the report on the Tuesday after 12 November 2026.

Under the proposal, people under 25 would be barred from claiming PIP and the health element of Universal Credit, the main benefit for people of working age. Universal Credit's health element is an extra payment for people with health conditions. Instead, under-25s would receive a new youth allowance paid at the standard rate of Universal Credit. Entitlement to ongoing support for those with the most severe needs would be protected.

The proposed local fund would pay for equipment and short-term costs, such as travel to a training course or a job interview. It would be managed by local advisers, with the intention that money could be moved quickly when needs arise.

The plan also includes a higher rate of youth allowance for young people living independently, including care leavers, meaning people who have spent time in local authority care. It would add an additional cost allowance for the most disabled young people, which could be received whether or not they are in work. A new, higher insurance provision would be created for those with severe disabilities who will never be able to work.

Milburn told the Guardian that his report would create 440,000 employment and education opportunities by 2036. He also said it would raise the net incomes of young people by more than £2bn.

Milburn said that cutting benefits to young people is worthwhile, because the long-term advantages of getting them into work outweigh potential short-term financial disadvantages.

The Joseph Rowntree Foundation has pushed back on the approach. Iain Porter, a senior policy official at the foundation, said that cutting someone's income when they are struggling to afford food or the bus to college makes it harder to stay in education or find work. The foundation said the proposals could weaken the safety net for hundreds of thousands of young people with a disability or health condition.

The foundation also said the government can and should invest in helping people back into employment. Young disabled people, it said, should not have to trade financial security for better employment support, and need both.