Minister suggests health benefit claimants could be offered jobs at KFC

Young people on health-related benefits could be offered subsidised jobs with major employers like KFC and Home Bargains after the Government indicated it was examining how to go further to tackle youth unemployment.

Work and Pensions Secretary Pat McFadden said he had commissioned senior officials to look at extending support, “particularly [for] young people with health conditions”, with any further work to be done alongside employers, charities, disabled people’s organisations and young people themselves.

The indication came in response to an independent review led by former health secretary, Alan Milburn, which concluded there had been a “whole system failure” leaving close to one million young people permanently detached from work.

A spokesperson for the Department for Work and Pensions did not deny the proposal to expand the scheme but said: “Reforming the welfare system so that it better meets the needs of disabled people is a priority for the Government.”

They added: “We know there’s more to do. That’s why we have accelerated our youth guarantee, announced 300,000 new work experience and training placements, and Alan Milburn is due to deliver his recommendations on tackling the barriers facing young people later this year.”

Milburn’s interim report, published this week, noted the Government’s jobs guarantee scheme “is only there for young people in the intensive work search group, not anyone on UC health” — and suggested it should be widened to include those who received the health element of universal credit.

UC health is a means-tested benefit payment for welfare claimants assessed as having limited capability for work due to a health condition or disability.

The job guarantee scheme provides six-month fully subsidised placements with employers including KFC, B&M and JD Sports.

Currently in its first phase, the guarantee covers around 1,000 young people aged 18 to 21 in six areas including Greater Manchester, Birmingham and the East Midlands who have been claiming universal credit while looking for work. A national roll-out providing jobs to 55,000 young people over three years is due later in 2026.

Previously, The i Paper reported that the Government is considering whether to delay access to the universal credit health top-up for young people under 22, though no decision has been made.

Any decision has been tied to whether the Government can demonstrate that a cut would come alongside substantial support measures to help young people into employment — with the jobs guarantee extension seen as a key part of that package.

This comes as exclusive polling for The i Paper by BMG Research shows 56 per cent of voters believe getting benefits should be conditional on young people actively seeking work, education or training.

Among those who back conditionality, nearly half – 49 per cent – say benefits should be stopped entirely if a young person refuses, with a further 40 per cent favouring a reduction.

It is thought a fall in entry-level jobs, with 1.6 million fewer low and medium-skilled jobs in the economy than 20 years ago, is one of the factors behind the crisis.

Former health secretary Wes Streeting, who has said he will challenge Sir Keir Starmer in any leadership contest, separately called on Sunday for a “targeted” cut to employers’ national insurance contributions to make it easier for businesses to hire young people. McFadden told the BBC that “any tax break in this system will cost and has to be paid for.”

Milburn’s review was also critical of the personal independence payment system, finding that by age 24 only one in four young claimants is in work, and pointing to problems with the work capability assessment process.

The review also revealed that nearly half of PIP claims among young people are for autism and ADHD, compared to less than one in 10 for all PIP claimants.

The report raised the prospect of further reforms including removing the universal credit health top-up for under-22s and offering young people a trial period in employment without immediately losing their benefits.

The Government has separately appointed former M&S chief executive Marc Bolland as lead non-executive director at the Department for Work and Pensions, tasked with convening business leaders to help deliver its youth employment agenda. It is feared that without urgent action, up to 1.25 million young people could be Neet (not in education, employment or training) by 2031.

Milburn’s final report, setting out detailed recommendations for reform, is due later this year.