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

2  The Oakley Review

11. The Oakley Review was a requirement of the Jobseekers (Back to Work Schemes) Act 2013. This was emergency legislation introduced by the Government to validate retrospectively JSA sanctions in relation to a range of mandatory schemes, which had been introduced under the Jobseeker's Allowance (Employment, Skills and Enterprise Scheme) Regulations 2011. The Court of Appeal's judgment in Reilly and Wilson v Secretary of State for Work and Pensions had ruled that the 2011 Regulations were unlawful because they did not provide sufficient information about the schemes, and DWP's letters to claimants did not provide sufficient information on claimants' obligations under the schemes, or the circumstances in which sanctions could be applied.[6]

12. Matthew Oakley was asked by the Government to review the clarity of DWP's information and communications about sanctions in relation to the nine schemes covered by the 2013 Act. In practice, around 90% of the sanctions considered by the review were related to the Work Programme, the Government's mainstream contracted employment programme, which was introduced in June 2011.[7]

The JSA sanctioning process

13. Decisions on whether to sanction a claimant are not made by the JCP Work Coach (or the employment adviser working for a contracted scheme provider). Where the Work Coach/adviser believes that the claimant has not fulfilled a mandatory requirement, a "doubt" can be raised and referred to a Decision Maker (a "sanction referral"). The Decision Maker is another DWP employee, detached from the employment support process, who makes a decision on whether to apply the sanction, based on the evidence provided. Decision Makers attempt to obtain evidence from the claimant, as well as from the Work Coach/adviser, and make their decisions on the "balance of probabilities".

14. Decisions fall into one of four categories: adverse (the claimant is sanctioned); non-adverse (the claimant is not sanctioned); reserved (the claimant is no longer on benefit so cannot be sanctioned, but the sanction would have applied had they remained on benefit); or cancelled (no sanction is applied, as insufficient or incorrect information was provided, or was not provided in a timely manner, or the referral was made in error).

15. JSA sanctions should not be applied where the claimant can show "good reason" for not fulfilling the mandatory requirement in question. The relevant guidance for Decision Makers lists a number of circumstances, including illness and family bereavement, which can be considered to constitute good reason, but these are not defined in legislation.

16. If sanctioned claimants believe that they should not have been sanctioned, they can first ask the Department to review its decision. If the decision remains unchanged following a review, and the claimant remains dissatisfied with the decision, the claimant can request a formal reconsideration of the decision. If, once the Department has formally reconsidered its decision and decided not to overturn it, the claimant still believes the decision was wrong, the claimant has the right to appeal to a Tribunal.[8]

Overview of the Oakley Review findings

17. Matthew Oakley found that the JSA sanctioning system in relation to contracted Back to Work schemes was "not fundamentally broken"; however, he identified very significant flaws in the explanatory information about conditionality and sanctions provided to claimants by DWP, and in the Department's letters to claimants after a sanction referral has been made. He concluded that improvements were required in a number of areas, particularly in respect of "more vulnerable" claimants who might struggle to understand their obligations or engage with the process. He made 17 recommendations for change, all of which were accepted, or "accepted in principle", by the Government in its response to the review.[9]

18. Mr Oakley acknowledged in his report that some of his recommendations would be "relatively easy for the Department to implement", whereas others might take longer, as they were likely to require legislative change and/or contractual negotiations.[10]

Specific Oakley recommendations and Government action to date

Improving claimant letters and broader communication issues

19. The Oakley Review stated that:

[DWP's claimant] letters were, on the whole, found to be complex and difficult to understand. Partly as a result of the legal requirements the Department has to fulfil when it writes to claimants, regular concerns were that letters:

·  Were overly long and legalistic in their tone and content;

·  Lacked personalised explanations of the reason for sanction referrals;

·  Were not always clear around the possibility of, and process surrounding, appeals or application for hardship payments; and

·  Were particularly difficult for the most vulnerable claimants to understand—meaning that the people potentially most in need of the hardship system were the least likely to be able to access it.[11]

A number of Mr Oakley's recommendations were aimed at improving the clarity of DWP's letters to claimants at all stages of the process, and thereby increasing claimants' understanding. He recommended that the Department review its letters; in particular that they should "give a personalised description of exactly what the sanction referral or decision relates to and include clear information about reconsideration, appeals and hardship."[12] He further recommended that DWP "work with experts in communication and behavioural insights to test whether variations in the style and content of letters could boost the proportion of claimants who open and engage with the letters they have been sent."[13]

20. In relation to broader information about the JSA sanctions system, the Oakley Review recommended that the Department publish, online and in hard copy, an "accessible guide" to benefit sanctions, including information on the reconsideration, appeals and hardship payment processes.[14] It also recommended DWP take specific action to identify and engage with claimants "who might require third party support to understand letters" and to help "vulnerable groups" claim hardship payments.[15] It further recommended that claimants' preferred channel of communication be routinely established and used.[16]

21. The Department told us that it was in the process of improving all sanctions-related communications; where appropriate it was applying the Oakley Review's recommendations across JSA, ESA and Universal Credit.[17] A new DWP Claimant Communication Unit had already been established; the Department confirmed in December 2014 that this unit was working with both internal and external experts to consider how "behavioural insights" could be applied to maximise claimants' engagement with sanctions communications.[18] DWP had also already published new sanctions fact-sheets for each of the out-of-work benefits, which explain in plain English how claimants can: avoid being referred for a sanction; challenge a decision; and apply for hardship payments.[19]

22. We welcome DWP's acceptance of the Oakley Review's findings, and the steps that it has taken towards implementation of the Review's recommendations. In particular, we welcome changes made to improve the clarity of letters to claimants and to provide clearer information on the benefit sanctions system to claimants of all out-of-work benefits. We believe that a continued focus on the clarity of sanctions-related communications and information will go some way towards improving claimants' understanding of their obligations and the sanctioning process. But we recognise that communication and information is only one aspect of the sanctions regime that needs to be addressed, and does not address concerns about sanctions implementation and a target-driven culture.


23. The Oakley Review identified a particular difficulty which claimants had in understanding the requirements on which their benefit payments were conditional, because they had dual obligations to both JCP and their contracted provider while taking part in mandatory schemes. Mr Oakley reported that a "recurring theme" was that claimants "regularly receive conflicting information from the Jobcentre and the Work Programme provider." The review's recommendation was that:

The Department should work with providers to review procedures to ensure that claimants on mandatory back to work schemes have a clear understanding of their responsibilities to both the provider and Jobcentre Plus.[20]

24. Chris Hayes, DWP's Labour Market Strategy Director, told us that DWP had improved its general guidance on dual responsibilities and had published it on the GOV.UK website. There was now guidance to Work Coaches to ensure that it was explained to claimants, at the point of referral to a contracted provider, that they would have dual responsibilities to comply with both JCP conditionality and any "reasonable work-related activity that the provider asks them to undertake."[21]

25. The Employment Related Services Associated (ERSA), the main trade body for contracted employment services providers (including Work Programme providers), questioned the necessity for all work-related activity in the Work Programme to be mandatory. It reported that there was a "consensus view" amongst contracted providers that "there are circumstances when mandating a jobseeker either to a particular type of provision, or to an activity within a provision, is likely to be inappropriate." ERSA believed that this was particularly the case where the claimant had a long-term health condition. It believed that, in general, "the evidence base for the effectiveness of mandation is weak", and that the appropriateness of claimants' mandatory participation in the range of different activities involved in contracted employment programmes should be carefully considered in the design of future provision.[22] We note that the option remains for providers to exercise discretion in choosing when to make an appointment mandatory.


26. The Oakley Review emphasised that a large proportion of sanction referrals made by contracted providers were subsequently cancelled or resulted in a non-adverse decision. Only 30% of these referrals led to the claimant actually being sanctioned. The review concluded that a "key driver" of this was contracted providers' inability to accept claimants' good reasons for not fulfilling mandatory conditions, "even if the claimant has provided them with what would ordinarily count as good reason in Jobcentre Plus." The review concluded that this situation was a clear waste of administrative resources, and that it often left claimants confused and feeling a "sense of injustice". The review recommended that the situation be addressed through revised guidance and/or legislation to give providers the legal ability to accept good reason in certain circumstances.[23]

27. Some witnesses were concerned that the Department did not appear to have taken action to address this important issue.[24] Chris Hayes told us that DWP had taken some steps to avoid providers making inappropriate sanction referrals. It had issued a new form for providers to fill in each time they make a referral, in which they must tick a box to confirm that they have checked "whether the claimant is in a vulnerable condition and therefore whether they should have set the requirements they have set in the first place." Providers were also advised to use Provider Direct, a dedicated phone line to DWP, to check that they held the correct address and other details for claimants, to avoid referrals being made in error, for example where an appointment letter had been sent to an incorrect address.

28. However, Mr Hayes told us that addressing the central issue of providers' current inability to apply a greater level of discretion and accept good reason would require both amending Regulations and "contract renegotiation". The Department would consider making the necessary changes in conjunction with the renegotiation of Work Programme contracts.[25] We had understood that referrals under the current Work Programme contracts would be made until 2016, when the contracts would be re-let.[26] The DWP witnesses mentioned in oral evidence that the contracts had in fact already just been "renegotiated". DWP later confirmed that the Work Programme contracts had recently been extended for 12 months, from March 2016 to March 2017.[27]

29. We accept that allowing contracted Work Programme providers formally to accept "good reason" for a claimant not fulfilling a benefit condition will require both legislative change and contractual negotiations. However, we believe that DWP should take more urgent steps to ensure that a more common-sense approach is set out in guidance. We recommend that DWP's guidance to contracted providers makes clear that discretion can be applied where providers' staff are confident that a claimant's failure to meet a mandatory condition was due to extenuating circumstances beyond the claimant's control. We further recommend that negotiations with Work Programme prime providers, ahead of the re-letting of prime contracts in 2017, prioritise the development of a more flexible approach to "mandation".


30. Matthew Oakley noted that a consequence of ineffective communication, and confusion around dual responsibilities, was that some claimants had a poor understanding of their obligations when initially referred to the Work Programme. This sometimes resulted in claimants with a previously good record of compliance with benefit conditionality receiving a sanction. The review recommended that DWP pilot pre-sanction written warnings and non-financial sanctions, including more regular attendance at appointments at the Jobcentre or the contracted provider, for claimants' "first failures" in relation to the Work Programme, particularly where the claimant had a good record of compliance with JCP conditionality.[28]

31. This recommendation was accepted "in principle" only; it was another area in which the Government believed that legislative change was necessary. Its response to the review stated that it would "consider further the potential options and the likely timescales."[29]

32. In oral evidence, Matthew Oakley's view was that it would in fact be possible for the Government to move relatively quickly to pilot pre-sanction written warnings and non-financial sanctions in these limited circumstances, without the prior need for new legislation. He also believed that they would be "relatively easy" to pilot within Universal Credit, as the relevant Regulations allowed considerable flexibility.[30]

33. We note that the Department considers that piloting of pre-sanction written warnings and non-financial sanctions for first-time Work Programme failures where the claimant has a previously good record of compliance with benefit conditionality would require legislative change. We believe that there would be considerable value in piloting these approaches urgently; we therefore urge DWP either to reconsider its position, and conduct small scale pilots prior to making legislative changes, or to bring forward the necessary secondary legislation, and conduct the pilots, as soon as is practicable in the next Parliament. We also recommend that DWP pilot pre-sanction written warnings and non-financial sanctions in relation to claimants' first-time failures within the Jobcentre Plus conditionality system.


34. Benefit sanctions should only affect out-of-work benefits. The Oakley Review reported that there had been a number of instances of JSA sanctions resulting in local authorities incorrectly ending a claim for Housing Benefit. The report did not assess the scale of this problem.[31]

35. In its response to the review, the Government acknowledged that Housing Benefit should not be affected by JSA sanctions, and stated that it was "taking immediate action to ensure that this does not happen." It explained that the problem arose due to automatic IT notifications sent by DWP to local authorities whenever a JSA payment is stopped; the information is essential because in some cases where JSA payments have stopped, particularly where the claimant has entered work, the local authority will need to review the claimant's Housing Benefit entitlement. It was not always possible within the existing notification system to distinguish between JSA payments which had stopped due to a sanction, and those which had ended for other reasons.

36. The Government proposed a short-term and a long-term solution. In the short-term, it would "ensure that wherever necessary claimants will be advised to keep their Local Authority informed to stop them inadvertently closing their Housing Benefit claim."[32] Witnesses, including Matthew Oakley, believed that this short-term solution was "clearly not reliable". The longer-term response was to implement a more reliable IT solution. It was not clear to witnesses what progress had been made with this.[33]

37. In oral evidence the Minister told us that the problem had been addressed. The Department had investigated around 300 potential cases, but the issue had not been found to have occurred in any of them. She also reported that DWP was manually checking for the problem "constantly". There had only been one potential case recently. She assured us that the Department had taken the issue "very seriously indeed."[34]

38. We recommend that DWP clarify, in its response to this Report: the extent to which Housing Benefit payments have been incorrectly impacted by Jobseekers Allowance sanctions, as identified by the Oakley Review; the steps it has taken—beyond advising claimants themselves to inform their local authority when they are sanctioned—to address the issue; and whether robust systems are now in place to ensure that the issue no longer arises.

Witnesses' views on the Oakley Review

39. There was very widespread support for the Oakley Review; most witnesses felt that implementation of its recommendations would go a long way towards improving DWP's communications, and claimants' understanding, in relation to Back to Work scheme JSA sanctions.[35] Witnesses also recognised that many of the Oakley recommendations, particularly around more effective communications, were relevant to benefit sanctions policy more broadly and therefore had the potential to improve the wider system.[36]

40. Mr Oakley was satisfied that the changes already made by DWP to its claimant letters, and the publication of the new sanctions fact-sheets, were "a really positive step forward". However, he also emphasised that:

There is of course work to be done. Some of the recommendations clearly could not be implemented immediately. Some will take renegotiation of contracts […]. Others will take time in Parliament, either for primary or secondary legislation, and I think it is right that they take time to get those issues right […].[37]


41. Matthew Oakley emphasised in his report that, while issues about communication and claimants' understanding of the sanctioning process were clearly important, a range of organisations had raised much broader concerns, including "the effectiveness of the sanctioning system in improving movements into work, the proportionality of the current sanctions levels and the pace of change over the last ten years." His view was that there were "wider issues that should and could be considered."[38] We consider some of the broader issues in the remainder of this Report.

6   Jobseekers (Back to Work Schemes) Bill 2012-13, Standard Note SN06587, House of Commons Library, March 2013 Back

7   For full terms of reference, see Oakley Review, p 14 Back

8   For a full description of the process in relation to Back to Work schemes, see Oakley Review, pp 16-20. The DWP Decision Makers' guide is available here:  Back

9   Government response to the Oakley Review Back

10   Oakley Review, p 11 Back

11   Ibid., p 9 Back

12   Ibid., p 37 Back

13   Ibid., p 38 Back

14   Ibid., p 37 Back

15   Ibid., p 39; p 38 Back

16   Ibid., p 10 Back

17   DWP (SAN0142) Back

18   DWP, Independent review of Jobseeker's Allowance sanctions Government response: Update on improvements to communications, December 2014 Back

19   DWP (SAN0142) Back

20   Oakley Review, p 40 Back

21   Q277 Back

22   ERSA (SAN0145) Back

23   Oakley Review, pp 43- 44 Back

24   Citizens Advice Scotland (SAN0096); Dr David Webster (SAN0110); Shaw Trust (SAN0144) Back

25   Q274 Back

26   See National Audit Office, The Work Programme, HC 266, June 2014, Summary para 6 and para 1.11 Back

27   Q274 (see footnote 3) Back

28   Oakley Review, p 42 Back

29   Government response to the Oakley Review, p 14 Back

30   Q15 Back

31   Oakley Review, p 38 Back

32   Government response to the Oakley Review, pp 10-11 Back

33   Webster, D, JSA sanctions: A guide to the Oakley Report and the Government's response, September 2014; Qq7-10 [Matthew Oakley and Tony Wilson] Back

34   Q273 Back

35   See, for example, Co-chairs of the All-Party Parliamentary Inquiry into Hunger in the United Kingdom (SAN0113); Crisis (SAN0122); ERSA (SAN0145); CPAG (SAN0152) Back

36   See, for example, Co-Chairs of the All-Party Parliamentary Inquiry into Hunger in the United Kingdom (SAN0113); Crisis (SAN0122) Back

37   Q6 Back

38   Q4 Back

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Prepared 24 March 2015