Burnham admits a generation has been failed

There is little to quibble with in the prime minister’s latest statement of intent about the plight of young people not in education, training or employment — the million-plus so-called Neets, according to The Independent.

Andy Burnham is right to remind the nation of the sheer scale of the problem, which affects one in eight of those aged between 18 and 24, equivalent to the population of Birmingham. The loss of GDP that this represents, as well as the hit to tax revenues to support public services, and the drag on living standards in general, hardly bears contemplating. Many billions of pounds, in any case.

Instead, as Burnham complains, a costly welfare system “provides an assessment, a payment and, after that, a goodbye”. Indeed, this is an “economic catastrophe and a moral failure”, and he is honest enough to see where the blame lies: with the political classes, including himself.

A generation let down, then, by common consent, at a time when there is such a desperate need to get the economy growing and productivity rising in the age of rapid technological change. Like any other advanced industrial economy, the UK cannot afford to support a tier of underemployed talent. Even if it could, there is no moral justification for allowing our fellow citizens to languish in hopeless near-poverty.

Yet, even now that he is prime minister and firmly in control of his party and the national agenda, Burnham sounds too much as though he is still campaigning for his party leadership. His analysis of the situation is sound, and so is his basic approach to this issue, moving people who are desperate to make something of their lives off benefits and into training and jobs.

That’s the new principle. He puts it himself with admirable clarity, and it is worth quoting in full: “This will be our offer: a clear guarantee of support. But it will also be matched by an expectation that young people will take up the opportunities made available to them. This will mean big changes to the way our welfare system operates. Benefits will become the backstop, not the starting point. The system will no longer begin by establishing which benefits a young person is entitled to. It will begin with their ambitions and the help they need to achieve them.”

The body of research and statistical evidence to support this change in emphasis is growing. The recent review of young people’s mental health by Professor Peter Fonagy and the continuing detailed work by Alan Milburn on the lived reality of Neets confirm that the prime minister’s instincts are correct.

But there are at least three problems that Burnham will have to overcome if he is to succeed in the quiet revolution in social security that he seems to have in mind. The first is to persuade a sceptical public — and the investors on whom Britain relies to fund its welfare state — that, as Milburn puts it, some “upfront” investment is necessary to help young people make a secure start in courses, apprenticeships and their first jobs.

The new emphasis will be on individual needs and guidance, and this will cost money — perhaps hundreds of millions of pounds. This investment should be paid back over time in a lower welfare bill and higher tax revenues as these new recruits to the workforce gradually start to make their contribution. Billions will be saved — but the process will require patience. One model of success would be the New Deal for Young People launched by the then chancellor Gordon Brown in 1997; but even that took time to pay for itself, and enjoyed the context of an economy growing steadily with low inflation. Things will be harder this time around.

The second issue is timing. We know that nothing of substance will emerge before the Budget in a fortnight, and most likely not for many months after. Morally and economically, this demands a much less leisurely timetable for large-scale action.