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

Conclusions and recommendations

In this list, conclusions are set out in plain type and recommendations, to which the Government is required to respond, are set out in italic type.

Call for an independent review

1.  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. (Paragraph 9)

Information and communications

2.  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. (Paragraph 22)

Providers' ability to accept "good reason"

3.  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". (Paragraph 29)

Pre-sanction written warnings and non-financial sanctions

4.  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. (Paragraph 33)

Impact of sanctions on Housing Benefit

5.  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. (Paragraph 38)

Helping claimants to comply

6.  We agree that benefit conditionality is appropriate and necessary but reiterate our view that it is important that conditionality is balanced by effective employment advice and support for claimants. We recommend that DWP ensure that the relevant guidance to JCP Work Coaches includes that sanctioned claimants should be offered additional, tailored support, to help them meet their benefit conditions and improve their employment prospects, including attending a specific meeting after a sanction has been applied to discuss how to improve compliance and ensure that the Claimant Commitment fairly reflects the individual's needs and abilities. (Paragraph 51)

In-work conditionality

7.  We recommend that the Government does not proceed with in-work sanctions beyond the existing pilots until robust evidence is available from the pilots to demonstrate that in-work conditionality can be effectively applied. (Paragraph 56)

Evaluating the Welfare Reform Act 2012 changes

8.  There is evidence that active and conditional unemployment benefit regimes, in which financial sanctions play a part, are relatively effective, but there is very limited evidence, from the UK or overseas, on the relative impacts of the three parts of the overall approach: the benefit conditions themselves; the accompanying employment support; and the application, or deterrent threat, of financial sanctions. We accept that any sanctions regime must be "credible" if it is to influence claimant behaviour; however, it is not possible from the available evidence to come to a view on the relative efficacy and impacts of longer minimum sanction periods compared to shorter ones. We believe that it is important that the Government conduct evaluations to enhance the evidence base in this policy area, to demonstrate that the use of sanctions is not purely punitive. (Paragraph 59)

9.  We recommend that DWP evaluate, by testing different approaches, the relative impacts on movements off out-of-work benefits and into work of: benefit conditions themselves; the level of accompanying employment support; and the application, or deterrent threat, of financial sanctions. We further recommend that DWP evaluate the efficacy and impacts of four-week minimum sanction periods, as introduced following the Welfare Reform Act 2012, compared to minimum sanction periods of one week. (Paragraph 60)

Monitoring the destinations of sanctioned claimants

10.  Recently published research emphasises the importance of developing more effective systems for monitoring the destinations of claimants leaving benefit in general and, in particular, the destinations of claimants leaving benefit following a sanction. The introduction of Universal Credit affords the Department considerable opportunities to develop new and more effective systems. We recommend that DWP develop systems, using RTI data, to track shorter and longer term employment outcomes and earnings progress for sanctioned benefit claimants within Universal Credit, as part of its ongoing evaluation of the efficacy and impacts of benefit sanctions policy. (Paragraph 66)

Setting appropriate JSA job-searching conditions

11.  We recommend that DWP's evaluation of the Claimant Commitment includes an assessment of: whether claimants are fully involved in the process of developing a suitable job-searching strategy and in setting realistic and achievable targets; and whether reasonable conditions are being set for all groups of JSA claimants, including those with physical and mental health conditions, learning disabilities and caring responsibilities. We also believe that more than another year before the findings of this evaluation are published is too long a wait for an assessment of new benefit conditions affecting so many claimants. We therefore further recommend that DWP expedite its evaluation and publish initial findings as early as possible in the next Parliament, and certainly before the end of 2015. We believe that there is a specific need to review whether the conditionality applied to those claiming JSA while a decision on ESA eligibility is being reconsidered or appealed should be altered to reflect this, and the individual's specific circumstances. (Paragraph 74)

12.  DWP's new Vulnerability Guidance is a welcome step forward in trying to more routinely identify claimants who are vulnerable and require support to "enable them to access DWP benefits and services". However, we are concerned that, while the guidance we have seen is a good, general purpose document, which includes helpful definitions of what might constitute vulnerability, it does not give clear guidance on the level of support vulnerable groups would need in order to fulfil their benefit conditionality. There remains a danger that some vulnerable individuals are being "set up to fail". (Paragraph 79)

13.  We recommend that DWP, drawing on specialist advice from health experts, develop guidance on vulnerability which is specifically intended to assist JCP staff in identifying vulnerable JSA claimants, including those with mental health problems and learning disabilities, who may face difficulties in understanding and/or complying with benefit conditionality. This guidance should include examples or case studies to illustrate how conditionality can be tailored in a range of circumstances. We further recommend that the Department amalgamate this guidance into the broader Claimant Commitment guidance, so that it becomes part of the routine process of developing appropriate and tailored JSA conditionality. (Paragraph 80)

Use of Jobseeker Directions

14.  We note the concern expressed by some witnesses that use of Jobseeker Directions has increased in some JCP offices in recent years. While we appreciate that there may be circumstances in which it might be appropriate for JCP staff to mandate a JSA claimant to undertake a very specific type of work-related activity, such as particular skills training, it is not immediately clear why such activities could not invariably be included in Claimant Commitments. Intuitively we would expect there to be minimal, if any, use made of Jobseeker Directions, as the Claimant Commitment becomes more firmly established. We recommend that DWP's evaluation of the Claimant Commitment include an assessment of the appropriate use of Jobseeker Directions and their interaction with the Claimant Commitment process. (Paragraph 84)

Single parent conditionality

15.  There is evidence that single parent JSA claimants are more likely to receive a non-adverse JSA sanction decision than the general JSA claimant population. Whilst not necessarily causing individual financial hardship, it should be recognised that the raising of a "doubt" in itself can cause distress. Notwithstanding the fact that many do successfully offer "good reason", there may still be some claimants who experience an adverse decision if they are not enabled and encouraged to offer "good reason". We also note concern from those representing single parents that claimants and JCP Work Coaches may be insufficiently aware of the statutory flexibilities designed to protect single parents from inappropriate conditionality, and that this may be leading to unnecessary sanction referrals which are subsequently overturned by Decision Makers. (Paragraph 87)

16.  We recommend that DWP increase training for JCP Work Coaches on the regulatory flexibilities which should be applied to the benefit conditions of single parent JSA claimants. We also recommend that DWP produce a straightforward, plain English guide to the flexibilities, which should be given to all single parent JSA claimants. We further recommend that DWP review the regulatory flexibilities afforded to single parent Universal Credit claimants, with a view to ensuring that they are offered the same level of protection from inappropriate conditionality and sanctioning as JSA claimants. (Paragraph 88)

Testing a more targeted approach to conditionality and sanctioning

17.  Employment services professionals believe that strict conditionality, backed up by financial sanctions, is necessary in only a small minority of circumstances, in particular where claimants have a history of poor engagement with employment support, and where their lack of engagement is "motivational or attitudinal". If the intention of sanctioning is to change behaviour, we believe that it is important to identify and focus on those claimants whose attitudes towards job-seeking and work the Department seeks to change. We believe that an effective targeted approach to strict conditionality, which focuses on this group of claimants, would have the benefit of protecting more determined jobseekers, and the vulnerable, from inappropriate, and potentially counter-productive, sanctions. We recommend that DWP draw on its 2011 research into the attitudes of unemployed people towards job-seeking and work, and consider whether its insights could inform a more targeted approach to benefit conditionality and sanctioning. We recommend that DWP establish a small-scale pilot to test the efficacy of a targeted approach based on segmentation of claimants by their attitudes and motivations. (Paragraph 93)

Categories of JSA "sanction"

18.  We recommend that DWP make a clear distinction—in its processes, its communications with claimants, and in the official data—between claimants who are not meeting the underlying conditions of entitlement, in particular those who are genuinely "not actively seeking employment" and may therefore be abusing the system, and those who have not fully complied with the precise terms of a Claimant Commitment. At the moment, both receive the same penalty. (Paragraph 101)

19.  We recommend that the Government confirm the steps it has taken to ensure that suspensions of JSA payments where the JCP Work Coach believes that the claimant has not been "actively seeking employment" do not occur before good reason can be considered, and a decision made, by a Decision Maker detached from the employment support process. DWP should set out the steps it has taken to address this issue, to provide assurance that the newly instituted procedure of making decisions in these circumstances within two days of referral is sufficiently robust to ensure that the decision has in fact been made, and the claimant notified, before the JSA payment is suspended. We also believe that notification should be by either written or telephone communication, depending on the claimant's preferences as previously expressed to JCP staff when signing the Claimant Commitment, or subsequent to this. (Paragraph 108)

Review of the legislative framework for sanctioning

20.  Given the complexity of the existing legislation, there is a strong case for a review of the underpinning legislative framework for conditionality and sanctions, to ensure that the basis for sanctioning is clearly defined, and safeguards to protect vulnerable groups clearly set out. We recommend that the clarity and coherence of the legislative framework for benefit sanctions policy be included in the terms of reference of the full independent review which we have recommended. (Paragraph 112)

ESA sanctioning

21.  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. (Paragraph 134)

22.  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. (Paragraph 135)

Further improving communication with claimants

23.  We note with concern claimants' uncertainty over whether a sanction has been applied which, as the Oakley Review highlighted, has arisen in large part because of poor communication from DWP. Such confusion can often feed through to self-reported statistics about the role benefit sanctions may play in the requirement for emergency food aid, potentially leading to false conclusions being drawn. We recommend that DWP carry out further work with the Behavioural Insights Unit to ensure that claimants understand their position within the benefits system, their underlying entitlements and, when changes to their benefit payments occur, what the reasons are for this. (Paragraph 141)

Hardship payments

24.  The improvements DWP has made to its systems and communications should ensure that all claimants are aware of the potential availability of hardship payments, and have sped up the hardship payment application and decision-making process. Despite this some people who would qualify are still not applying for a variety of reasons. Furthermore, there is widespread concern that DWP's system of discretionary hardship payments does not prevent severe financial hardship in all cases, often because JSA hardship payments are not typically available until the 15th day of a sanction period. We believe that changes to the system are required to ensure that the risks of severe financial hardship are more comprehensively mitigated. There should also be signposting for, and access to, welfare advice support. (Paragraph 149)

25.  We recommend that DWP make hardship payments available from day one of a sanction period in all cases, including JSA. We further recommend that, where the claimant has dependent children or is a member of a vulnerable group, the hardship payment decision-making process be instigated by DWP Decision Makers, and coordinated with the decision on the sanction referral itself, regardless of whether the claimant has proactively applied for a hardship payment. The fact that in January 2015 the most recent data on hardship payments were from 2010-11, and those data were only made available in response to a Parliamentary Question, is highly regrettable, particularly given that this has been a period of significant change in the sanctions regime. It should not take four years to gather and validate such data. We therefore also recommend that DWP publish, on at least an annual basis, official data on the number of applications for hardship payments made by sanctioned claimants; the number of hardship payments made; and the number which were made on day one of a sanction period. (Paragraph 150)

Investigating deaths of benefit claimants

26.  It is right that the Department investigates all deaths of claimants resulting from suicide, and other deaths of vulnerable claimants with complex needs, through a system of "peer reviews". We fully appreciate that in such cases there are likely to be multiple and complex factors involved. We understand that DWP has undertaken 49 peer reviews since February 2012, and that in 33 cases these resulted in recommendations for consideration at either national or local level. We ask that the Department set out the number of peer review cases where the claimant was subject to a benefit sanction at the time of death and the results of any such reviews in terms of policy changes. In addition, DWP should seek to establish a body modelled on the Independent Police Complaints Commission, to conduct reviews, at the request of relatives, or automatically where no living relative remains, in all instances where an individual on an out-of-work working-age benefit dies whilst in receipt of that benefit. Such a model, operated within the purview of the Parliamentary and Health Service Ombudsman, should ensure that the role of all publicly-funded agencies involved in the provision of services or benefits to the individual is scrutinised, so that a learning document can be produced setting out how policy, and the service delivery pathway, can be improved at every stage. (Paragraph 154)

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Prepared 24 March 2015