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

6  ESA sanctioning

113. Employment and Support Allowance (ESA) is a relatively new benefit; it was introduced in 2008 as a replacement for incapacity benefits (IB), for unemployed people with long-term health conditions and disabilities. ESA claimants considered to have "limited capability for work", but with the capability to undertake "work-related activity" and considered to have a reasonable prospect of being able to work in the future, can be placed in the ESA Work-related Activity Group (ESA WRAG). These claimants are subject to a more limited range of conditionality than JSA claimants—attendance at mandatory work-focused interviews at JCP and/or mandatory participation in the Work Programme.[122]

Welfare Reform Act 2012: increased financial penalties

114. The monetary value of financial sanctions which can be applied to ESA claimants increased significantly following the WRA 2012. The Act also introduced a system of fixed-period sanctions. Under the previous system ESA WRAG claimants who failed to attend a JCP appointment, or who failed to carry out mandatory work-related activity, could be subject to an open-ended sanction. The sanction amount was 50% of the work-related activity component of their benefit (i.e. around £14 per week), increasing to 100% (£28.15 per week) of the component after four weeks. Under this regime full benefit was reinstated when the claimant recommenced compliance with the conditions.

115. Under the new rules, ESA WRAG claimants who fail to comply can receive the same open-ended sanction of their work-related activity component while they fail to comply, followed by a fixed period sanction once they start to comply again. As in the new JSA regime, ESA sanctions are now escalated for repeat failures. The fixed period sanction is one week for a first failure, two weeks for a second failure and four weeks for third and subsequent failures within a 52 week period. The fixed period sanction applies to the claimant's entire ESA basic component (£71 per week).[123]

Safeguards to protect ESA claimants from inappropriate conditionality

116. There are extensive safeguards set out in the relevant DWP/JCP guidance to protect ESA claimants from inappropriate conditionality and sanctions. These are designed to ensure that JCP staff take proper account of claimants' needs and capabilities. The guidance is clear that staff "must take account of all the claimant's circumstances, including the claimant's physical or mental health condition." It also emphasises that staff must make efforts to identify claimants who may have had difficulty in understanding the requirements placed on them. It states that:

[…] it is particularly important to consider the welfare of claimants who have mental health conditions or learning disabilities, or conditions affecting communication/cognition, for example, stroke or autistic spectrum disorder.[124]

117. Where claimants fail to meet a condition, the guidance is that staff must establish whether the claimant had "good cause" for doing so before referring the claimant for a sanction decision. A list of circumstances in which claimants might be considered to have had good cause is set out, including where the claimant:

·  Has misunderstood any requirement given to them due to any learning, language or literacy difficulties;

·  Has been given misleading information by a member of staff;

·  Was attending a medical or dental appointment, or accompanying a person for whom the claimant has caring responsibilities to such an appointment, and it would have been unreasonable for them to rearrange that appointment;

·  Had difficulty with their normal mode of transport and there was no reasonable alternative;

·  Has established customs and practices of religion, which prevented them from attending at that particular time;

·  Was attending an interview for employment;

·  Was pursuing an employment opportunity as a self-employed earner;

·  Had an accident, sudden illness or relapse in the case of a chronic condition which prevented the claimant from attending on the day;

·  Is a person with caring responsibilities and the person for whom care is provided had an accident, sudden illness or relapse in the case of a chronic condition which prevented the claimant from attending on the day/undertaking the WRA [work-related activity];

·  Suffered from any disability or health condition, which prevented them from attending on the day / undertaking the WRA; or

·  Was attending the funeral of a relative or close friend.[125]


118. Additionally, the guidance states that, where an ESA claimant fails to meet a condition and good cause cannot be established, and where the claimant is considered to be particularly vulnerable as a consequence of their health condition (defined as having a mental health condition or learning disability), arrangements must be made for DWP staff to visit the claimant at their home.[126] These visits are known as Core Visits, the aim of which, in these circumstances, is to: "ensure the claimant fully understands the requirements placed on them by Jobcentre Plus in satisfying the conditions of entitlement to benefit [before a sanction referral is made]".[127]

119. Witnesses representing disability organisations acknowledged that the safeguards set out above were extensive. Paul Farmer, Chief Executive of the mental health charity, Mind, described them as "pretty good".[128] However, representative organisations were concerned that a) the safeguards were not always applied; and b) that they were set out in guidance only, rather than being defined in legislation. There were several examples given in evidence in which the guidance on good cause appeared not to have been followed.[129] Analysis of official sanctions data by Mind demonstrated that ESA claimants with a mental health condition were significantly more likely to receive a sanction than the general ESA claimant population.[130] Paul Farmer reported that he was "not aware of Core Visits being applied at all".[131]

120. DWP told us that it undertook around 40,000 Core Visits per year.[132] It was unable to tell us how many of these visits resulted in a sanction being applied.[133]

The extent of ESA sanctioning

121. Witnesses were very concerned about a notable increase in ESA sanctioning since 2013.[134] The number of sanctions applied per month has increased steadily from around 1,000 in early 2013, reaching a peak of 3,828 in September 2014, the latest month for which official statistics are available. In the year to September 2014 there were 38,755 ESA sanctions applied; up from 18,983 in the year to September 2013.[135] This is to some extent related to increasing ESA WRAG caseloads, as more claimants transfer from IB to ESA; however, ESA sanctioning rates (adverse sanction decisions as a percentage of the total ESA WRAG caseload) have also increased, for example from 0.3% in May 2013 to 0.75% (after reconsiderations and appeals) in September 2014.[136]

122. In oral evidence the Minister said that "ESA sanctions are less in 2014 than they were in 2010-11".[137] The Department later clarified that the Minister was referring to the average monthly ESA sanctioning rate in 2014 (0.6%) compared to that in 2010-11 (0.72%).[138] It should be noted that in 2010-11 ESA WRAG caseloads were much smaller, and there were almost no mandatory referrals to the Work Programme, which was launched in June 2011 to replace a range of existing programmes.[139] The 2010-11 period can therefore be considered atypical; it does not provide a meaningful comparator.

Work Programme related ESA sanctions

123. The increase since 2013 in the number and proportion of ESA claimants sanctioned is almost entirely related to claimants' "failure to participate in work-related activity"—i.e. predominantly non-attendance at mandatory Work Programme appointments:[140]



124. Kirsty McHugh of ERSA acknowledged that the increase was predominantly a consequence of increased ESA referrals to the Work Programme. She told us that because Work Programme performance in relation to ESA claimant groups had been very low in the early years in the Work Programme, there had recently been a renewed focus on ESA claimants, including more mandatory activity, which she believed "might be leading to more sanction doubts being raised."[141]

125. Other witnesses suggested that Work Programme providers were not sufficiently aware of ESA claimants' health-related needs, or were making "unreasonable demands" on them, and that this was leading to more sanctions.[142] A number of witnesses, including Kirsty McHugh, reported that information gathered from the ESA assessment process was not routinely shared with Work Programme providers.[143] This is an issue on which both we and the independent reviewers of the assessment have made recommendations for change.[144]

126. The Child Poverty Action Group (CPAG) was concerned that, while there was guidance setting out actions Work Programme providers should take to safeguard vulnerable claimants, appropriate protections were not defined in legislation and therefore:

Since the requirement to take safeguarding action is only in guidance and not a requirement of the law, even when such action has not been undertaken, this does not necessarily mean that a sanction can be overturned.[145]

Balance between ESA conditionality and support

127. Some witnesses were concerned that the relatively poor performance of the Work Programme in relation to ESA claimants indicated that the ESA conditionality regime was not always balanced by effective employment support.[146] We have previously concluded that the payment-by-results model of the Work Programme is not well-suited to providing effective support for people who are furthest from the labour market, including those with long-term health conditions, and therefore require more intensive support.[147] Kirsty McHugh alluded to this issue when she told us that "there is not enough money in the system to meet the needs of people on ESA."[148]

128. It should be noted that while concerns remain about the performance of the Work Programme in relation to ex-IB and other groups of ESA claimants, the Work Programme is now meeting its contractual minimum performance expectations for new ESA claimants.[149] However, Disability Rights UK (DRUK) reported that in general the support available to ESA claimants on the Work Programme was insufficiently specialised. Philip Connolly of DRUK described Work Programme support for claimants with health conditions and disabilities as:

[…] too small, too generic; it is about job-searching or CV writing. It is support that they have frequently had before that may not have made a difference to their prospects in the past, and then they are faced with sanctions.[150]

Efficacy and impacts of ESA sanctions

129. Some witnesses emphasised a lack of evidence for the efficacy of sanctions in relation to people who are some distance from the labour market and therefore not expected to enter employment in the shorter term.[151] Furthermore, there was strong anecdotal and qualitative evidence of adverse impacts, particularly on health (see chapter 7). Inclusion reported that:

Among ESA claimants, we have found nothing but negative experiences [of sanctions]—claimants with often complex needs, severe health conditions, poor awareness and understanding of the system, and very significant impacts on finances, wellbeing and health.[152]

Tony Wilson of Inclusion argued that "it has got to the point where we should suspend the application of sanctions for people on ESA", until more effective approaches to employment-related support for this group are developed.[153]

130. The Minister defended the Government's approach, noting that the ESA system was intended to encourage claimants' engagement with support designed to bring them closer to the labour market; she emphasised that ESA claimants were "not under any legal obligation to take a job, but they do have to take the steps to get into work."[154] The Department's view was that the very high level of compliance—evidenced by fewer than 1% of ESA WRAG claimants being sanctioned each month—indicated that the level of conditionality was appropriate.[155]

Alternative approaches

131. Some witnesses believed that alternative, voluntary, approaches were more appropriate, and likely to be more effective, particularly for some groups of ESA claimants. There is evidence that voluntary approaches have been relatively effective in the past, for example in the New Deal for Disabled People.[156]

132. Paul Farmer advocated approaches which employed an Individual Placement and Support (IPS) model for people with more severe mental health conditions, such as depression, bi-polar disorder and schizophrenia. IPS models integrate employment services with mental health treatment services. They operate on an entirely voluntary basis. Mr Farmer reported that IPS programmes had been jointly delivered by local authorities and Mental Health Trusts to good effect—employment rates were around 20-25%.[157]

133. In July 2013 the Department announced pilots of new approaches to employment support for ESA WRAG claimants, to evaluate the comparative effectiveness of support delivered via: healthcare professionals; JCP; and specialist Work Programme providers. These pilots are due to run until 2016.[158] The Minister for Disabled People recently said that DWP was piloting "a number of innovative approaches to employment support for those with mental health conditions."[159]

134. The very large majority of ESA sanctions relate to claimants' failures to attend or participate in the Work Programme. This reason accounts for almost all of the notable increase in ESA sanctioning which has occurred since 2013. While the performance of the Work Programme has improved significantly after a poor start, and is now meeting minimum contractual performance expectations for new ESA claimants, there remains widespread concern, including from contracted providers, that the Work Programme does not yet provide sufficiently specialised and effective support for ESA claimants who are some distance from the labour market. We therefore believe there is a risk that ESA conditionality is still not properly balanced by effective employment support. We recommend that DWP review ESA sanctioning in relation to the Work Programme, accelerating development of more effective support for this group, and prioritising the updating of regulations early in the next Parliament, to empower Work Programme providers to be able to accept "good cause". We call upon DWP also to review the programme of Core Visits as soon as possible, to clarify what changes to conditionality and the application of sanctions occur as a consequence of such Core Visits.

135. There is a lack of evidence for the efficacy of financial sanctions in moving claimants with long-term health conditions and disabilities closer to employment or into work. There is some evidence that voluntary approaches are more appropriate and effective. We welcome DWP's commitment to testing alternative approaches, particularly for ESA claimants with mental health conditions. We recommend that the Department include voluntary approaches in its pilots, including the Individual Placement with Support model. DWP should test and evaluate these new approaches, and publish its findings, prior to the re-letting of Work Programme contracts in 2017. DWP should also test alternative, non-financial models of conditionality for vulnerable groups. In particular, it should review the situation of claimants with co-morbidities, to ensure that there are no perverse unintended consequences in applying non-financial models to particular vulnerable groups of claimants.

122   For a full description of the ESA assessment process, see, for example, Work and Pensions Committee, First Report of Session 2014-15, Employment and Support Allowance and Work Capability Assessments, HC 302 Back

123   Employment and Support Allowance (Sanctions) (Amendment) Regulations 2012 Back

124   DWP, ESA Guidance for Jobcentres, chapter 8 [not published] Back

125   IbidBack

126   IbidBack

127   JCP Core Visit guidance [not published] Back

128   Q39 Back

129   See, for example, Sheffield Citizens Advice and Law Centre (SAN0126); North Staffordshire Advice Partnership (SAN0119); Salford Financial Inclusion Practitioner's Group (SAN0104) Back

130   Mind (SAN0106) Back

131   Q31 Back

132   Q253 Back

133   DWP (further supplementary evidence) (SAN0163) Back

134   See, for example, Disability Rights UK (SAN0099); Inclusion (SAN0143); Mind (SAN0106);  Back

135   DWP, Jobseekers Allowance and Employment and Support Allowance Sanctions: Decisions made to June 2014, table 2.1 Back

136   Ibid., and DWP tabulation tool [accessed 18 February 2015]; Webster, D., Briefing: DWP's JSA/ESA statistical release, 18 February 2015 Back

137   Q290 Back

138   DWP (further supplementary evidence) (SAN0163) Back

139   DWP tabulation tool; DWP, Work Programme Statistical Release, August 2012  Back

140   Dr David Webster (SAN0110), figure 4 (FTA=failure to attend; FTP=failure to participate) Back

141   Q35 Back

142   Catherine Hale (SAN0061); Dr David Webster (SAN0110) Back

143   Q20 [Kirsty McHugh and Philip Connolly]; CPAG (SAN0152) Back

144   See An Independent review of the Work Capability Assessment-year five, Dr Paul Litchfield, November 2014, Chapter 2, para 28 and Chapter 5 para 8; and Work and Pensions Committee, First Report of Session 2014-15, Employment and Support Allowance and Work Capability Assessments, HC 302, July 2014, para 136 Back

145   CPAG (SAN0152) Back

146   See, for example, Disability Rights UK (SAN0099); Inclusion (SAN0143) Back

147   Work and Pensions Committee, First Report of Session 2013-14, Can the Work Programme work for all user groups?, HC 162 Back

148   Q35 Back

149   Work Programme official statistics  Back

150   Q38 Back

151   See, for example, Mind (SAN0106); Inclusion (SAN0143) Back

152   Inclusion (SAN0143) Back

153   Q36 Back

154   Q327 Back

155   See, for example, Q207 [Chris Hayes] Back

156   Q40 (Paul Farmer]; Q46 [Dr Webster]; ERSA (SAN0145); See also, DWP, New Deal for Disabled People: Third synthesis report-key findings from the evaluation, Research Report No. 340, 2007 [available via University of York website, accessed 25 February 2015] Back

157   Q40 Back

158   "Help for people on sickness benefits to address barriers to work", DWP press release, 8 July 2013 Back

159   HC Deb, 26 January 2015, col. 547 Back

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Prepared 24 March 2015