Benefit sanctions policy beyond the Oakley Review - Work and Pensions Contents

1  Introduction

In the text of this Report, our conclusions are set out in bold type and our recommendations, to which the Government is required to respond, are set out in bold italic type.

Benefit sanctions

1. Unemployment benefits have always been conditional. In order to receive financial support while unemployed, claimants have typically been required to demonstrate that: they are involuntarily unemployed; they have not been dismissed from a job through misconduct; and are both available for, and looking for, work. A system of disallowances, or disqualifications, where claimants fail to meet these types of underlying entitlement conditions has existed since the introduction of unemployment benefit in 1911.

2. The nature of unemployment benefit conditions—"conditionality"—has developed considerably over recent decades. Jobcentre Plus (JCP) Advisers (now known as Work Coaches) can now require claimants to demonstrate that they are taking many more steps towards finding work than was previously the case; and these steps can be more precisely defined. Claimants' participation in a number of externally contracted Back to Work schemes, including unpaid work placements, can also be mandatory.

3. A system of benefit sanctions—cessation of benefit payments for open-ended or fixed periods—has developed alongside more stringent benefit conditions over the last four decades. The application, or deterrent threat, of sanctions where claimants fail to meet the agreed, or prescribed, conditions is intended to influence claimants' behaviour positively: to encourage them to participate in activity aimed at getting them into work. This much more "active" system of employment support is now the norm in developed economies.

4. There has been an apparent mainstream political consensus for the development of benefit sanctions policy and the direction of travel has been maintained under successive governments since the 1980s. However, it is by nature a controversial policy area, as sanctions withhold subsistence-level unemployment benefits from people who may have little or no other income. Furthermore, the system is now applied to a wider range of unemployed claimants, including many with long-term health conditions and disabilities, and single parents with caring responsibilities for young children.[1]

Background to our inquiry

5. We considered conditionality and sanctions as part of a previous inquiry into Jobcentre Plus in the reformed welfare system. Our January 2014 Report set out serious concerns about: the extent to which benefit sanctions were being applied; whether the rules were always clear, and being fairly and proportionately applied by JCP and its parent department, the Department for Work and Pensions (DWP); and the wider social impacts on claimants, particularly whether sanctions were contributing to severe financial hardship and food poverty.[2]

6. During our previous inquiry the Government established an independent review of Jobseekers Allowance (JSA) sanctions "validated by the Jobseekers Act 2013". The review was carried out by Matthew Oakley, who is a member of the Social Security Advisory Committee (and was previously Head of Economics and Social Policy at Policy Exchange). The scope of the Oakley Review was limited to JSA sanctions in relation to externally contracted mandatory Back to Work schemes; it did not consider sanctions applied to claimants within the standard DWP/JCP system. The review was further limited in scope to consider issues concerned with DWP's communications with claimants and contracted providers of the schemes, and claimants' understanding of the sanctioning process, including their options in respect of challenging DWP's decisions and applying for hardship payments. The Oakley Review, together with the Government's response, was published in July 2014.[3] We recognise that the implementation of many of Mr Oakley's recommendations has been extended to claimants outside the original remit of the Oakley Review.

7. Given the concerns identified in our 2013-14 inquiry, and the tightly constrained scope of the Oakley Review, our Report recommended that DWP commission a second, broader independent review of the benefit sanctions system, including all sanctions applied within DWP/JCP. Despite the Minister for Employment (Rt Hon Esther McVey MP) appearing to indicate during oral evidence that such a review was planned, our recommendation was rejected by the Government in its formal response to our Report.[4]

8. We decided to conduct a further inquiry in order to follow up some of the issues set out in our January 2014 Report, and to consider areas of benefit sanctions policy which were outside the scope of the Oakley Review, including Employment and Support Allowance (ESA) sanctions, applied to unemployed people with health conditions and disabilities. We also wanted to explore the impacts of the new sanctions regime and alternatives to the financial sanctions being applied.

9. This Report does not rehearse at length all of the issues and concerns set out in our previous Report; however, similar concerns about how the conditionality and sanctions system is being applied in some Jobcentre Plus offices and districts were reiterated by a range of witnesses. We received new evidence from the Public and Commercial Services Union (PCS), representing DWP staff involved in the benefit sanctioning process, which raised further concerns about the approach adopted in a number of individual Jobcentres, and more broadly, including whether targets for sanctions exist. There was very widespread support from witnesses for our earlier call for a broader independent review. Our starting point in this Report is therefore a reiteration that:

We recommend that DWP commission a broad independent review of benefit conditionality and sanctions, to investigate whether sanctions are being applied appropriately, fairly and proportionately, in accordance with the relevant Regulations and guidance, across the Jobcentre Plus network. This review should be established and report as soon as is practicable in the next Parliament.

This inquiry and Report

10. We announced our terms of reference and issued a call for evidence in November 2014. We received around 160 written submissions from a range of organisations and individuals and held three oral evidence sessions, including a final session with the DWP Minister.[5] We are grateful to everyone who contributed to our inquiry, particularly the individual claimants who took the time to share their experiences with us.

1   Joseph Rowntree Foundation, Welfare Sanctions and Conditionality in the UK, September 2014 Back

2   Work and Pensions Committee, Second Report of Session 2013-14, The role of Jobcentre Plus in the reformed welfare system, HC 479 [hereafter, JCP Report] Back

3   Oakley, M, Independent review of the operation of Jobseeker's Allowance sanctions validated by the Jobseekers Act 2013, July 2014 [hereafter, Oakley Review]; DWP, Government's response to the Independent review of the operation of Jobseeker's Allowance sanctions validated by the Jobseekers Act 2013, Cm 8904, July 2014 [hereafter, Government response to the Oakley Review] Back

4   Work and Pensions Committee, Third Special Report of Session 2013-14, Role of Jobcentre Plus in the reformed welfare system: Government Response to the Committee's Second Report of Session 2013-14, HC 1210 Back

5   Lists of oral witnesses and written evidence are set out at the end of the report. Back

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Prepared 24 March 2015