Milburn Review: Local Fund to Replace PIP for Young Disabled 2026

The Milburn Review is set to recommend replacing Personal Independence Payment (PIP) for some young disabled people with a local fund, under sweeping welfare reforms for under-25s. The plan, reported by the Guardian, would see some young people with disabilities lose their ongoing PIP payments and instead apply to a local fund for short-term expenses and equipment.

While those with the most severe needs will have their entitlement protected, others will be asked to apply for money for specific purposes rather than receive an ongoing payment. The review, led by former health secretary Alan Milburn, aims to overhaul the benefits system for young people and promises almost half a million job and education opportunities within a decade.

What the Milburn Review Proposes for Young Disabled People

Under the plans, under-25s will be barred from claiming PIP and the health element of Universal Credit. Instead, they will receive a new youth allowance paid at the standard rate of Universal Credit. This represents a fundamental shift from ongoing cash payments to a system where support is targeted and often in-kind.

For young people with disabilities, a local fund will be established to provide money for equipment or short-term expenses such as travel to attend a training course. This means that instead of receiving a regular PIP payment to manage their own needs, some will have to apply for specific items or services.

Who Is Protected and Who Is Not

The review specifies that those with the most severe needs will have their entitlement protected. However, it does not detail exactly how “most severe” will be defined or how many young people will be affected. Those who do not meet this threshold will be moved onto the local fund system.

This raises questions about the assessment process and whether young people with fluctuating conditions or less visible disabilities might fall through the cracks. The government has not yet responded to these proposals.

Why the Government Is Considering These Changes

Alan Milburn argues that the current system is failing young people and that piecemeal reforms are insufficient. In a statement to the Guardian, he said: “We need to tear up the old approach and start again for under-25s. A tweak to the benefits system just won’t do.”

He added: “We need a new system built around a young person with schools, the NHS and employers all working together to make sure that everyone has the chance to earn or learn.” The review is expected to say that the benefits system for young people should be entirely replaced, with a focus on work and education.

How the Local Fund Would Work

Details of the local fund are still scarce, but the review suggests it would be administered locally and would provide money for specific purposes. This could include equipment, assistive technology, or travel costs to attend training or education.

Such a system would require local authorities or other bodies to assess applications and distribute funds. It is unclear whether the fund would be ring-fenced or how it would be funded. Critics may argue that this adds bureaucracy and delays support for those who need it.

Impact on Young Disabled People and Their Families

For young disabled people, the loss of PIP could mean a significant reduction in income and independence. PIP is currently paid to help with the extra costs of disability, and many young people use it to pay for care, transport, or equipment.

Moving to a local fund system could mean that support is no longer tailored to individual needs but rather to what the fund decides to cover. Families may face more paperwork and uncertainty. However, the review promises that those with the most severe needs will be protected, which may reassure some.

• Under-25s will no longer be able to claim PIP or the health element of Universal Credit.
• A new youth allowance will be paid at the standard rate of Universal Credit.
• A local fund will provide money for equipment and short-term expenses for some young disabled people.
• Those with the most severe needs will have their entitlement protected.
• The review promises almost half a million job and education opportunities within a decade.

Comparison of Current and Proposed Support

What to Watch Next

The Milburn Review is expected to be published soon, and the government may respond with its own proposals. Key questions include how “most severe needs” will be defined, how the local fund will be funded and administered, and whether the new youth allowance will be enough to live on.

Parliamentary scrutiny and consultation with disability groups will be crucial. The government has not yet commented on the plans, but any changes would require legislation.

As the debate unfolds, it’s worth considering how these reforms fit into the broader welfare landscape. The Milburn Review’s proposals for young people echo other recent changes, such as the Milburn Review jobs revolution for disabled young people, which aims to boost employment. Similarly, the review’s suggestion that young people should get fewer welfare benefits has sparked controversy, as covered in our analysis of the Milburn Review proposal for fewer welfare benefits for young people.

These changes come amid wider efforts to reform disability benefits, including the UK PIP benefit overhaul that could see disabled people swap cash for in-kind support. Such shifts raise important questions about independence and choice. For a deeper look at how these proposals compare, see our related articles on the Milburn Review’s jobs revolution and the controversial plan to reduce benefits for young people.