Separate youth benefits system likely to swap cash for job support

Plans to create a new and targeted benefits system for young people , offering less in cash unemployment payments and more jobs and training support , are being considered by the Government under a “complete reset of the system”, a Cabinet minister has said. Work and Pensions Secretary Pat McFadden said he would fight for more money from the Treasury for “investment” for reforms aimed at giving people “opportunities” instead of “an assessment, a cheque, and a goodbye”.

The comments were made on a fact-finding mission to Copenhagen, where McFadden was studying the Danish Fleksjobs scheme, which connects people who have disabilities or health conditions that make it difficult to work full-time with state-subsidised jobs. Being signed off completely from work in Denmark is a “last resort” according to Danish social workers. The trip comes ahead of the publication of two major reviews by Alan Milburn and Sir Stephen Timms , which are expected to shape future reforms to government policy on youth unemployment and disability benefits .

Work over welfare McFadden told The i Paper that he was very interested in the Fleksjobs scheme for people of all ages, adding the Danish system focuses on what people “can do”, whereas Britain’s system “too often asks what you can’t do”. He said: “What we’re going to have to do is change the way the system works so that it gives people a future, not just an income. That is going to mean a much more active approach to getting people into work.”

The Milburn and Timms reviews will be a “really big moment”, McFadden said, adding he will absorb their recommendations and set policy that will be followed by legislation next year. The i Paper ‘s Vicky Spratt visiting a Fleksjobs scheme with Pat MacFadden in Copenhagen He has also said that he wants to support more people with disabilities – particularly younger people – into work and will soon be extending his Youth Jobs Guarantee, which offers taxpayer-funded work placements to young people not in employment, education or training (Neets).

Agreeing that Britain would need to “invest” in employment support and changes to the welfare system, he said: “I’ll do whatever I can in the forthcoming spending review to make the case for investment. But that will all become clearer later in time.” Asking people “what can you do?” As things stand, anyone in Britain who cannot work and has a ph.ysical or mental health condition goes through a Universal Credit Work Capability Assessment (WCA) which establishes which benefits they are eligible for.

This is regardless of whether they are young or old. Since he took over as Work and Pensions Secretary, McFadden has tried to remove ‘cliff edges’ in the system that disincentivise people with health conditions from trying work because they fear losing their financial support if the job doesn’t work out. The Danish Fleksjob model was introduced in 1998 with the explicit intention of creating a more active employment model as opposed to a focus on providing unemployment support.

It allows people with disabilities or health conditions to work as few as four hours a week and have their wages subsidised by the state. Denmark now has a low overall unemployment rate of 2.7 per cent. The UK’s is currently 4.7 per cent. The Danish employment rate for people with disabilities is 61 per cent – the highest in Europe. Milburn has said that he will recommend a Danish-style scheme for young people with lifelong disabilities.

A new system for young people However, when it comes to young people who do not have a severely limited capacity for work, McFadden said he was interested in creating an entirely “distinct” system. He said: “If you’re young, you have your whole life in front of you, so the choices that you’re able to make [and] the way you’re channelled by the state at a young age, have a longer-term impact on your life. “It’s not the same being age 20 and having certain conditions and being close to retirement with a very different set of conditions.”

Such changes would be a radical departure from Britain’s current system where hundreds of thousands of younger people in their late teens and twenties have been signed off from work with conditions such as anxiety, depression, ADHD and autism in recent years . However, McFadden said change will not simply be a case of picking a “level of cuts” and saying when they will happen. “It’s not going to work like that,” he said. “What we’re going to have to do is change the way the system works so that it gives people a future, not just an income.

That is going to mean a much more active approach to getting people into work. “It might not always be just work. It might be: could you do a training course? Could you do an education course? Could you do something productive?”