Prime Minister Andy Burnham is preparing to make closer co-operation between schools, employers and local government the first pillar of his attempt to reduce Britain’s welfare bill.

Drawing on programmes developed during his tenure as mayor of Greater Manchester, Burnham wants education from age 14 to provide clearer routes into locally available careers, apprenticeships and technical training before young people disengage from work altogether.

The initiative addresses an entrenched problem rather than promising an immediate fiscal saving.

About one million people aged 16 to 24 are outside employment, education or training, equivalent to roughly 13 per cent of that age group.

Unemployment among 18- to 24-year-olds has reached 14.8 per cent, its highest level in 12 years, while overall unemployment stands at 4.9 per cent.

Entry-level hiring has weakened as employers contend with higher wage, tax and operating costs.

Burnham’s central contention is that welfare dependency often begins with failures in education, health provision, transport and the transition from school to work.

He has rejected language that depicts claimants as the sole cause of rising expenditure, arguing that many young adults with mental-health difficulties entered the benefits system because appropriate support and credible employment opportunities were absent.

He nevertheless says welfare spending must fall and has indicated that continued support could become more explicitly conditional on accepting suitable training, treatment or employment opportunities.

The education model is based partly on the Greater Manchester Baccalaureate, known as the MBacc.

Unlike a separate examination qualification, it organises existing secondary-school subjects, technical courses, work experience and employer engagement into pathways connected to sectors with local demand.

These include engineering, construction, digital technology, health, financial services and the creative industries.

Its purpose is to give pupils a visible route from choices made at 14 to apprenticeships, further education or employment at 18. Burnham wants employers to help shape those pathways, offer meaningful workplace experience and identify the skills they expect to need.

The approach also seeks parity between academic education and technical routes, which successive governments have endorsed rhetorically without eliminating disparities in funding, availability or public esteem.

Transferring the Greater Manchester model across England would be considerably harder than running a regional programme.

Schools operate under different academy trusts and local arrangements, employers’ requirements vary sharply between regions, and high-quality technical teaching demands specialist staff and equipment.

Work placements and apprenticeships must also exist in sufficient numbers; redesigning a curriculum cannot create vacancies that businesses are unwilling or unable to provide.

Burnham is therefore considering a wider devolution of post-16 skills budgets and employment services.

Metro mayors and other regional authorities could receive greater control over training and jobcentres, allowing them to co-ordinate schools, colleges, transport and employers around local labour markets.

The proposal reflects his argument that centralised programmes often fail because officials in Whitehall cannot respond precisely to the industrial composition or practical barriers of individual communities.

Transport illustrates the point.

Young people in some northern and Midlands districts live within commuting distance of expanding urban labour markets but cannot reach jobs reliably or affordably.

Poor mental-health provision, persistent school absence and the decline of local youth services compound the problem.

Restoring England’s £2 bus-fare ceiling forms one part of Burnham’s response, although it does not resolve shortages of routes, evening services or accessible entry-level work.

Employers are being offered a more direct partnership with government.

Burnham has promised greater policy certainty, faster decisions and a stronger business voice, while asking companies to invest in training, communities and young recruits.

A parliamentary committee has separately proposed removing employer National Insurance contributions for all workers under 25. Existing relief generally covers employees below 21 and apprentices below 25, leaving most workers aged 21 to 24 subject to the tax.

That proposal carries a substantial price.

Extending the exemption could cost the Treasury about £5.1 billion while generating an estimated 38,000 additional jobs, an upfront public cost of approximately £132,000 for each extra worker.

Supporters argue that the calculation understates the lifetime economic and social damage prevented when a young person enters sustained employment.

Critics contend that a broad tax reduction would subsidise many appointments that employers would have made anyway.

The welfare pressures extend beyond unemployment benefits.

The number of people receiving Personal Independence Payment, a non-means-tested benefit covering the additional costs of disability, has doubled since the pandemic to about four million.

Spending is projected to rise from approximately £32 billion this financial year to £41.5 billion in current prices by 2031. Claims involving psychiatric, mental-health and neurodevelopmental conditions now constitute a substantial share of the caseload.

Personal Independence Payment is not an unemployment benefit and may be claimed by people who work or study.

Removing or restricting it does not automatically increase employment, because the payment can finance transport, care and other support that enables participation.

Ministers are nevertheless examining whether the existing cash-based structure sufficiently differentiates between claimants’ needs and whether treatment or employment assistance should play a larger role.

Any replacement of cash with services would depend on those services being available promptly and consistently.

Burnham’s predecessor, Keir Starmer, suffered a damaging parliamentary rebellion after presenting welfare reform primarily as a route to expenditure cuts.

The new prime minister is trying to avoid a repetition by placing employment opportunities, technical education and mental-health support before tougher benefit conditions.

The fiscal arithmetic remains unavoidable: programmes that improve skills, treatment and transport require money before they can produce lower welfare expenditure.

The policy challenge is accompanied by deliberate management of Labour’s large and ideologically divided parliamentary party.

Burnham has appointed 61 parliamentary private secretaries alongside 125 ministers and whips.

Parliamentary private secretaries receive no additional salary and are not ministers, but they assist departments, act as links with backbenchers and are expected to support the government in parliamentary votes.

A rebellion normally requires them to resign.

The unusually large group includes MPs from Labour’s left as well as Burnham allies and members first elected in 2024. Three members of the Socialist Campaign Group have accepted posts, bringing a faction traditionally wary of government discipline into the administration’s junior ranks.

The appointments broaden participation and provide inexperienced MPs with responsibility, but they also enlarge the informal payroll vote and may be interpreted as an attempt to contain dissent through patronage.

That tactic has limits.

Parliamentary private secretaries can resign, and a contentious welfare measure could convert a large intake of appointees into a conspicuous group of defectors.

Some MPs have also objected to the removal of experienced postholders during the reorganisation.

Burnham’s ability to preserve unity will therefore depend less on the number of appointments than on whether his reforms offer credible routes into work without withdrawing essential support from disabled or ill people.

A government-commissioned review led by former cabinet minister Alan Milburn is examining the causes of youth inactivity, employment incentives, mental-health support and the relationship between welfare and work.

Its final recommendations are due in the autumn, after which ministers are scheduled to bring forward the next stage of welfare reform.