Milburn Review Replaces Disability Income for Under-25s With Local Discretionary Funds

Young disabled people lose ongoing Pip payments in exchange for a local fund they must apply to case-by-case. The government frames it as opportunity; charities see it as a safety-net demolition.

Alan Milburn's review of youth unemployment, due next Tuesday, will recommend stripping personal independence payments from most under-25s and replacing them with a "youth allowance" pegged to the standard universal credit rate — roughly £80 a week. Young people with the most severe disabilities retain a higher insurance provision; everyone else loses their ongoing entitlement and must instead apply to a local discretionary fund for specific expenses like equipment or travel costs.

The architecture matters. Pip is a non-means-tested, ongoing payment that disabled people use to cover the extra costs of daily life — transport, care, energy. It flows automatically once assessed. The proposed local fund inverts this: it is discretionary, short-term, application-based, and managed by local advisers. That is a structural downgrade from entitlement to petition, regardless of how quickly the funds are promised to flow. Millburn frames the shift as investment in opportunity. His report promises 440,000 employment and education opportunities by 2036 and claims young people's net incomes will rise by more than £2 billion. He insists no young person he met wanted to be NEET and that the system fails them through lack of opportunity, not lack of ambition. The rhetoric is aspirational — "a lost generation is a choice" — but the mechanism is fiscal: reduce ongoing disability payments now, promise jobs later. The Joseph Rowntree Foundation has identified the core tension. Many young people use Pip to fund the very things — bus fares, equipment, food — that keep them in college or employment. Cutting that income while promising future training opportunities creates a sequencing problem: the support vanishes before the opportunities materialise. Labour MP Bell Ribeiro-Addy put it plainly: "The cuts seem to land on young disabled people, and many of them are in college already or already at work." Downing Street has not ruled out applying the changes to existing claimants, which would mean current recipients losing income they already depend on. The political dynamics are volatile — Meg Hillier, key to last summer's welfare rebellion, is giving Milburn a "fair wind," but Ribeiro-Addy's unease signals continued backbench resistance. The government's framing — invest in success or pay for failure — is a false binary that obscures who actually bears the transition cost. The 20-year question is whether discretionary local funds can replicate the function of a national entitlement. International evidence on block-granting disability support to local bodies is not encouraging: budgets get squeezed, eligibility tightens informally, and the most marginalised lose access first. If the promised 440,000 opportunities do not materialise at the pace assumed, a generation of young disabled people will have lost guaranteed income and gained a suggestion box. This is a policy that asks disabled young people to trust that a system which hasn't been built yet will be better than the one being demolished now. That is a large ask directed at people with the least power to absorb the risk if it fails.