Ministerial misunderstanding on benefits sanctions.

It has become far too common to decry the UK welfare system, and those who utilise it. So much so, that it has become the norm to say that “we need to get people off benefits and into a job”.

The UK Conservative Party tapped into this mentality, and promised reform of the welfare system and an increased drive for policies to return citizens on benefits into the workplace. Starting from the Conservative-Liberal Democrat coalition Government from 2010 to 2015, and carried into the majority Conservative Government of 2015 onwards, there has been a marked push towards requiring those on benefits to engage jobseeking or skills training. Moreover, there were new rules implemented to ensure that those seeking social security benefits must be actively seeking employment. The consequence of breaking these rules? The now-infamous benefits sanction.

Benefits sanctions are incurred when social security clamants, who supposedly breach the aforementioned strict jobcentre rules, have their payments stopped for at least a month. They are, quite simply, a punishment, imposed for a variety of reasons. If a claimant has failed to turn up to a jobcentre appointment, or are deemed to not have applied for enough jobs (goodness knows what ‘enough’ means), then they are sanctioned. Officials punish these claimants by essentially fining them, stopping benefit payments for around four weeks (to an approximate cost of £300).

Between 2011 to 2015, almost one in four of all jobseeker’s allowance claimants were sanctioned. Monthly sanction rates almost doubled under the coalition Government, and reached a high point in 2013. This was the year that saw a tightening of the conditionality rules around claims for jobseeker’s allowance led to a record one million penalties being imposed on claimants. In 2015 alone, sanctions led to an estimated £132m of benefits being withheld from some of the UK’s poorest citizens.

The Guardian published an article which described the policy of benefits sanctions as being based on “zeal, not evidence” and frankly, it is not hard to see why. The article notes:

Anti-poverty campaigners, food banks, academics and MPs have warned for years that sanctions were dangerous: they can lead to debt and rent arrears, depression, hunger, food bank use, survival crime, destitution and worse. Sanctions, they have pointed out, can be handed out capriciously or cynically to meet jobcentre targets.

But, quelle surprise, the Department for Work and Pensions has stubbornly refused to listen to the collective call advocating an end to benefits sanctions. Instead, the Department has regularly insisted that sanctions do “work” by providing a deterrent effect to the not-so-keen job seeker. Sanctions, claimed the former work and pensions secretary Iain Duncan Smith in March 2016, were “the reason why we now have the highest employment levels ever in the UK”.

Which brings me to the main point of this post: ministers simply do not understand the impact or effectiveness of sanctions on benefits claimants.Moreover, this lack of ministerial understanding and knowledge was detailed in a report from the National Audit Office (NAO) in 2016. Yes, this rather daming report dismisses some five years’ worth of ministerial and Departmental bluster and misinformation about the cntroversial and ineffectual social policy.

The NAO called on the Department for Work and Pensions (DWP) to conduct a “wide-ranging review” of sanctions particularly in light of forthcoming changes to Universal Credit.

In a comprehensive report, auditors submitted that previous reviews carried out by the Department had not gone far enough in understanding the impact of sanctions, or their effectiveness in gaining employment. The NAO said it was likely that different approaches by managers and local jobcentre staff have had a “substantial” influence on whether or not people are sanctioned. Moreover, it also found that some employers on the “Work Programme” scheme were referring twice as many people for sanctions as other providers in the same area.

The report neatly cuts through the spurious ministerial claim that sanctions vitally assist getting people into work. This was a fragile claim to begin with: the DWP’s own advisers have pointed out that there is no evidence to support it. Employment companies running the DWP’s work programme warned last year that for most jobseekers, sanctions actually made getting a job harder. The NAO conducted its own preliminary analysis of DWP data and found that sanctioned claimants were as likely to stop claiming benefits altogether as they were to get a job. The effect on sick and disabled unemployed claimants was even more stark. So, instead of finding evidence to confirm the ministerial claim, the NAO actually found that sanctions were likely to have discouraged claimants from working.

The report also cites international studies which shows whilst people who receive sanctions are more likely to find work, the effect of the programme can be “short-lived, lead to lower wages and increase the number of people moving off benefits into inactivity”.

Auditors say the DWP does not track the costs and benefits of sanctions, but estimates that it spends £30-50m a year applying sanctions, and around £200m monitoring the conditions it sets for claimants. Moreover, it was estimated that due to the Department withholding the previously mentioned £132m from claimants due to sanctions in 2015, it had to pay out £35m in hardship payments.

Amyas Morse, Head of the National Audit Office, said of the report:

“Sanctions on benefits have a high opportunity cost, not only for those who are dependent on those benefits if sanctions are applied, but for the efficient use of public resources.

“We acknowledge the department’s effort to reduce its error rate on sanctions, but we think there is more to do in terms of reducing them further, and in reducing the notable differences in sanctions applications between comparable localities.”

Labour MP Meg Hillier, who chairs the Public Accounts Committee, said:

“Benefit sanctions punish some of the poorest people in the country. But despite the anxiety and misery they cause, it seems to be pot luck who gets sanctioned.”

Chris Goulden, Deputy Director of Policy and Research at the Joseph Rowntree Foundation said:

“Sanctions are pushing people into destitution and extreme financial hardship, with many people who rely on benefits living in fear of being sanctioned unfairly and unpredictably.

“A lack of evidence on the impact of sanctions means that it is impossible to say what long-term effect this has on public spending or employment rates, with some evidence showing that sanctions are as likely to force people out of the system as they are to encourage them to find work”.

The unspoken cost of benefit sanctions are surely great. The threat of the imposition of benefits sanctions, especially on tose claimants with mental ill-health must also be considered. Here again, there is a display of a lack of ministerial and Departmental understanding.

Through Freedom of Information requests, it was found there were 39,190 people with mental health or behavioural disorders in the Employment and Support Allowance Work-related activity group were referred – this is the first step towards sanctions being put in place -in 2014/15. Of those, only 10,000 resulted in an ‘adverse decision’, which see claimants have their benefits cut for a period of time.

That means 10,000 claimants with mental ill-health or a behavioural disorder suffered from a reduction of income. 29,190 claimants might not have been sanctioned, but had to endure the anxiety of being sanctioned, not ideal when one is already enduring mental ill-health. This provokes a vicious circle: mental ill-health prevents a citizen from being employed, the worry of benefits sanctions exacerbates this, and actually being sanctioned makes the citizen’s condition worse, and the reduces the likelihood of gaining employment.

Charity Mind said the Department for Work and Pensions was “too eager to assume the worst” of people.

“Despite having been found not well enough to work, these individuals are being threatened left, right and centre, often unjustifiably…

“In fact, pressurising people with mental health problems to engage in activities under the threat of losing their benefit is counterproductive, causing additional anxiety, often making people more unwell and less able to work.”

And guess what, it gets better. Per a study conducted by Oxford University academics, it was found that benefit sanctions are in fact a key driver of hunger, and food bank usage. B mapping official sanctions data against food bank usage, the study concluded a “robust link” existed between increases in the number of benefit sanctions, and the number of people receiving food parcels.

Ministers, however, have refused to accept that welfare reforms, including benefits sanctions, are connected to the sharp increase in food bank usage. This is despite a number of studies which link sanctions and benefit processing delays to financial crises at home, leaving individuals and families reliant on food bank assistance.

Speaking about the NAO report a DWP spokesman said:

“Sanctions are an important part of our benefits system and it is right that there is a system in place for tackling those few who do not fulfil their commitment to find work.

“This report fails to recognise the improvements we have made to sanctions, particularly to help those who are vulnerable. The number of sanctions has fallen, and they are only ever used as a last resort after people fail to do what is asked of them in return for benefits.”

Aye, sure. Using phrases like “tackling those who do not fulfil their commitment to find work” is really going to help reach out to those with mental ill-health, and struggling to find a job and make ends meet.

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