Youth unemployment report chief urges Andy Burnham to slash welfare to help more people into work

Mr Milburn, a former Health Secretary, is expected to publish a report on the NEET issue, with a series of recommendations after the Budget at the end of October.

Almost one million young people are currently classed as NEET, according to the Office for National Statistics, contributing to the welfare bill and making efforts to boost youth employment a key priority for Labour.

Speaking to the Guardian, Mr Milburn suggested his report would likely recommend cutting benefit spending to channel the money into supporting people to return to work.

He said: “We’ve got to have a different conversation about the welfare system; it just isn’t working for young people.

“We need to redistribute money from the welfare system to more employment support if we are going to end the NEET crisis.”

Mr Milburn also called for employment, mental health and benefits support to be more integrated.

He said: “Over the medium term, it is entirely possible that you can reduce the benefits bill, but in order to do that, you’ve got to provide the support for young people.

“You’ve got to increase the opportunities that are available for young people and then provide the support for them to enable them to grab those opportunities.”

Writing in the Times on Monday, Andy Burnham promised to take Mr Milburn’s recommendations seriously, calling the number of NEETs”an economic catastrophe and a moral failure”.

Pledging to guarantee young people support “up front”, he added: “We face a choice. We either invest in the success of our young people or pay for failure through the benefits system. We cannot afford to do both.”

Labour is expected to publish a series of “jobs plans” for key sectors this week, starting with professional services and construction.

The plans will make 22,400 apprenticeships a year available through accountancy, legal services and consultancy firms for under-25s.

Construction firms have agreed to offer another 40,000 placements.

Labour hopes its jobs plan will help young people gain employment in Britain’s key industries identified by Labour’s industrial strategy.

Business Secretary Jonathan Reynolds said: “Reindustrialising Britain means giving workers the skills they need to get good jobs in growing industries.

“Too many young people are being denied the chance to get a foot on the career ladder.

“These jobs plans bring government and industry together to change that, opening up more apprenticeships, training and vocational routes into rewarding careers.”

Further jobs plans for the digital, technology and defence industries are expected later in the week.

Shadow Business Secretary Julia Lopez said: “Labour have been a disaster for youth jobs.

“Their tax hikes and red tape have made it harder for businesses to hire, invest and grow, destroying opportunities for young people looking to take their first step on the career ladder.

“After increasing costs on employers and burdening firms with more red tape, Labour are now trying to paper over the cracks.”