The West Midlands Combined Authority (WMCA) has secured £4.5 million of Government money through the region’s trailblazing deeper devolution deal to become the first area of the UK to test a new and simpler benefits system.

Under the scheme, young people aged 18 to 24 who live in commissioned supported accommodation will pay a proportion of their rent and eligible service charges through their earned income with the remainder topped up through a grant payment.

The pilot is intended to remove the need for young people to navigate two benefit systems and work, potentially risking the loss of their home or their job. It will test whether simplification encourages and enables young people to work whilst also feeling the benefit of their earned income.

Across the region 8.4 per cent of 18-24-year-olds - 24,000 - are claiming unemployment-related benefits, that’s almost double the 4.9 per cent UK average.

This particularly affects young people who live in supported housing, which is accommodation provided alongside care, support or supervision to help young people transition to live as independently as possible in the community.

This is because under existing benefits rules, when young tenants hit the income threshold the amount of Housing Benefit they can claim reduces, meaning they have to contribute more of their earnings towards rent.

Evidence shows this is a major barrier to young people who are thinking about seeking work, in addition to concerns over navigating the in-work benefits system, the risk of debt and the fear of losing their home as a result.

Andy Street, Mayor of the West Midlands and chair of the WMCA, said: “I want to see every young person in the West Midlands with a decent, secure job and a safe and stable place to live.

“It’s heartbreaking that nearly 24,000 young people across our region are either not earning their own money or even on the way to doing so. Evidence shows this can have a life-long scarring effect so we must continue to take urgent action to tackle it.

“Thanks to money we’ve secured from government as part of our devolution deal, we can now give young people valuable time and breathing space to settle into work and a new way of life, while still receiving the support they need. This will help remove  the threat of falling into debt or even, for some, a return to homelessness.

“By incentivising work in this way and combined with everything we are doing to ensure local people have the right skills, we can better tackle youth unemployment and improve the lives of young people right now and in the months and years ahead.”

Minister for Disabled People, Health and Work, Mims Davies MP, said: “All young people should be able to access the wide range of benefits that fulfilling work can provide.

“We are committed to giving all those who can work the support they need to do so, with our £2.5 billion Back to Work Plan set to help one million people find and stay in work through tailored and individualised support.

“This innovative DWP pilot will also ensure young people living in supported housing in the West Midlands can thrive professionally and personally. Without worrying about failing to meet their housing costs, they will be able to grab opportunities nearby to them.”

Cllr Kerrie Carmichael, WMCA portfolio lead for inclusive communities and leader of Sandwell Council, said: “Commissioned supported housing can provide a pathway for young people as they take those vital first steps into work and to becoming more financially independent.

“We want to do all we can to make that transition even easier and more straightforward. This is just one element of our wide-ranging work to improve the life chances of many thousands more young people across our region, whether that’s getting them into employment, education or training.”

Cllr David Welsh, chair of the WMCA Homelessness Taskforce Members’ Advisory Group and Coventry City Council’s cabinet member for housing and communities, said: “This pilot is all about providing the additional help young people in supported accommodation need to overcome barriers to work so they can benefit from the vital opportunities and confidence employment will have on ensuring they fulfil their full potential.

“It’s vital that we do all we can to ease the many pressures and challenges that young people face today, and removing the stress of navigating the often complex benefits system, hopefully means more young people will be able to feel secure in a job and in their home.”