Benefit Sanctions Contents

6Imposing a sanction - referrals and decisions

The quality of decision-making

99.Work coaches decide whether to refer someone for a sanction, then an independent decision-maker considers whether to impose one. The Minister told us “there is a very clear process of quality assurance to make sure that we are getting these decisions right”, which were explained further in his letter of 4 September.218 But throughout our inquiry we heard examples of many decisions that were at best ill-informed, and, at worst, wholly inappropriate. This included personal testimonies from Jen Fidai and Luke O’Donnell, as well as anecdotal evidence from third party stakeholders such as Gingerbread, Crisis and CPAG.219

Box 5: Luke’s story

Luke has epilepsy and was in the “all work-related requirements” conditionality group while claiming Universal Credit. He was sanctioned for 21 days when he failed to attend a work-focused interview. But three days before this appointment he was hospitalised owing to multiple seizures. Despite providing evidence of his illness and time in hospital, the decision to sanction him was upheld at Mandatory Reconsideration, concluding “Mr Luke O’Donnell has not shown good reason for missing his appointment”. Luke tweeted about his experience, which “went viral” and was reported in the press.220 Not long after, Luke received a second letter from the DWP saying he did in fact have good reason for failing to attend his appointment and the decision to impose a sanction had been overturned.

Source: Qq54, 80, 81220

100.Claimants can challenge the decision to impose a sanction, first via Mandatory Reconsideration (MR) and then by appealing to the First-tier Tribunal. UC statistics published in February 2018 showed that 81% of original and MR decisions were not upheld when taken to appeal.221 Inclusion London said “the large numbers of sanctions that are reversed or over-turned at appeal indicate that many sanctions are being applied unfairly”.222 It noted that even when the decision was reversed, claimants had already had their benefit withdrawn and, as Coventry Citizens Advice said, “the damage [had been] done”.223

Box 6: Jen’s story

Jen was claiming JSA when she was sanctioned for failing to attend a jobcentre appointment. She had phoned in advance and visited in person to tell the jobcentre she would not be able to attend because her appointment clashed with an A level exam (it was later revealed that Jen had been put on the wrong benefit in the first place and should not have been claiming JSA because she was still in full-time education). Although she was told “okay, that’s fine. We’ll put that on your record”, she was still sanctioned. With the help of “an amazing advocate” she successfully challenged the sanction, received a backdated payment and was moved onto the correct benefit. But this did not take away from the fact that Jen had gone without benefits for almost a year. She had had to leave her temporary accommodation and sofa-surfed, stayed with friends, or slept in the school library through the rest of her A levels.

Source: Qq67—77

101.The Shaw Trust stressed the urgency to improve the “accuracy, consistency, proportionality and fairness of decision-making”224 to end “inappropriate sanctioning practice”.225 NHS Health Scotland suggested that the problem went beyond “addressing individual cases that have gone wrong”. Rather it was a “systemic issue that require[d] a systemic response”.226

Causes of systemic failings

102.Evidence to our inquiry suggested several issues at the heart of the failings described above. These are addressed below.


Work coaches and decision-makers

103.Written evidence from CPAG explained that while work coaches could exercise judgement over what was a ‘good reason’ for failing to comply, they had no discretion over whether or not to refer someone for a sanction; once they decided that the claimant did not have good reason they had to impose a sanction “as a result of the law”.227 Similarly, decision-makers could make a range of judgement about what was reasonable based on the claimant’s circumstances, but they had no discretion over the imposition of a sanction if they concluded that the claimant’s actions were not reasonable.228

104.The NAO’s 2016 report recognised the challenge of ensuring fairness and consistency—through stricter rules and fewer judgement—without restricting flexibility to account for individual circumstances—through fewer rules and greater exercise of judgment.229 While the Minister told us he thought the current system had found the right balance,230 witnesses were less convinced.

Accepting ‘good reason’

105.We heard some examples of work coaches making sensible judgement on what counted as ‘good reason’.231 But, as Luke and Jen’s stories show, we also heard examples where they got it horribly wrong, resulting in inconsistent treatment of claimants and wholly inappropriate referrals.232 Some witnesses said this was the risk in a system that relied on work coaches making judgment calls, which stemmed from the fact that the definition of ‘good reason’ was set out in guidance, rather than regulations.233 Several witnesses suggested that the process would be improved by a stricter, regulatory approach. For example, CPAG recommended:

A more stringent rules-based system which limits the need for judgement as to what is ‘reasonable’. Rules ought to set out those situations which constitute good reason, rather than requiring [work coaches and] decision makers to make judgement on a case by case basis … The risk that a particular case may have a good reason but not come within one of the explicit rules can be catered for by having a residual category for other situations, allowing for a reasonableness test in these cases.234

It argued that this would improve consistency and make decision making easier, as it could “(largely) be reduced to a set of factual questions”.235

106.Contracted providers of mandatory work-related programmes are also able to refer people for sanctions, such as providers of the Work and Health Programme, which was introduced in Wales and North West England in November 2017 and rolled out across the rest of England in early 2018.236 Under this programme, providers are not able to accept good reason and must refer claimants for a sanction automatically whenever someone fails to comply with their conditionality. Dr David Webster told us that automatic referrals were “a source of injustice and damage to claimants”.237 Matthew Oakley criticised this approach under the Work Programme, which concluded in 2017. His 2014 review of the operation of sanctions under JSA recommended that contracted providers should be able to accept good reason in the same way that work coaches could.238 The Government argued that this would require legislative change and did not accept the recommendation.239

Discretion to refer for, or impose, a sanction

107.If a work coach decides someone did not have good reason for failing to comply with their Claimant Commitment, they must refer them for a sanction. We heard mixed views on this. On the one hand, Mind called for work coaches to be empowered “not to make a referral when they do not feel it would be appropriate”;240 while Dr David Webster said work coaches should not be given more discretion.241 He argued instead that discretion should “come through a review process that involves increasingly specialised and experienced people”.242 Others suggested that decision-makers should have discretion not to impose a sanction if they think that doing so would have an inappropriate or disproportionate effect on the claimant or their household.243 The DWP were concerned that discretion, whether that of a work coach or decision-maker, would create inconsistent treatment of claimants.244

Process for challenging a decision

108.If someone thinks they were sanctioned unfairly they can challenge the decision by way of Mandatory Reconsideration (MR) followed by a right of appeal to the First-tier Tribunal. The Law Society of Scotland said, however, that the process was neither “sufficiently effective nor speedy enough to be regarded as satisfactory means of redress”.245 It noted that there were no time limits for MR to be carried out, most appeals took over six months to be heard and, if successful, people then “faced a further delay of four weeks or more until their benefit [was] reinstated and any arrears paid”.246 As a result, people often suffered a potentially incorrectly imposed sanction, and consequent unnecessary hardship, for “weeks or months” before their challenge was even heard.247 The Minister confirmed that the Department did not make “any specific commitments to claimants” about how long it takes for a decision at MR or appeal.248

109.We appreciate that the Government has a difficult job in weighing up the competing aims of allowing discretion to ensure flexibility and implementing rules to ensure consistency. A key decision is whether a claimant had ‘good reason’ for failing to comply with their conditionality. As it stands, this is a judgment call for work coaches. We do not doubt that most work coaches will consider this decision carefully, but getting it wrong can trigger unnecessary hardship for the claimant and unwanted bureaucracy for the Department. What is more, it inevitably leads to inconsistent treatment of claimants. This is an unnecessary and significant responsibility for work coaches and we heard too many examples of inappropriate and inconsistent sanctions to be convinced that this approach is working. Carefully drafted regulations on what constitutes ‘good reason’ would ensure work coaches make fairer and more consistent referrals.

110.Once a work coach decides a claimant did not have good reason, they must refer them for a sanction. Similarly, once a decision-maker concludes the claimant’s actions were not reasonable, they must impose a sanction. In this respect, there is no flexibility. We recognise the arguments for there to be discretion not to impose a sanction, either with work coaches or decision-makers. But this would risk reintroducing the very inconsistency we wish to eradicate. What is more, we are confident that if the recommendations in this report are fully implemented, decision-makers would not find themselves even considering sanctions that would be inappropriate or disproportionate.

111.We recommend that:

in relation to failure to accept an offer of work:

ix)availability and cost of:

112.It is not acceptable that claimants must endure a sanction for weeks on end while they await the outcome of a challenge, which may prove that the sanction was incorrectly applied in the first instance.

113.We recommend that the Department commit to a timeframe for making decisions at mandatory reconsideration and appeal. It should monitor success against this target and publish the data collected in the its annual report.

A ‘yellow card’ system

114.Prior to this inquiry, several commentators including our predecessor committee, the Public Accounts Committee and Matthew Oakley recommended that work coaches should be able to issue a warning instead of a sanction for the first time someone fails to comply with a conditionality requirement.249 This is commonly referred to as ‘a yellow card’. In its latest response, the Government said that such a policy would require legislative change that could not be introduced because of “competing priorities in the Parliamentary timetable”.250 But we have good reason to believe that under Universal Credit this change could be made via secondary legislation, which takes up very little parliamentary time. For example, under sections 26(8)(a) and 27(9)(a) of the Welfare Reform Act 2012, the Secretary of State could make provision in regulations for no reduction in benefits to be made for a first sanctionable offence and the claimant to get a warning instead.251

115.On 21 May 2018, the Minister announced that the Department had identified a trial they could introduce without requiring legislative changes. It was therefore “exploring the feasibility” of issuing written warnings instead of sanctions for a first sanctionable failure to attend a Work-Search Review.252 But in the evidence we received there was still strong agreement that this policy should be rolled out more widely.253 Some witnesses highlighted factors that would be key to the success of any ‘yellow card’ system. For example:

116.We constantly hear that the benefits system is being reformed to reflect the world of work. But in what workplace would a first mistake be met with the harshest penalty? In the workplace, we would reasonably expect to receive a warning in the first instance. This should also be true of the benefits system. We therefore welcome the Government’s announcement to trial warnings instead of sanctions for the first time a claimant fails to attend a Work Search Review; but the scope of this trial is limited. The Department must therefore treat it as an opportunity to learn lessons while working towards rolling out this policy to all claimants subject to conditionality. We are not convinced by the Department’s assertion that this change requires primary legislation. We believe it could be introduced via secondary legislation, in which case the issue of Parliamentary time is irrelevant.

117.We recommend that the Department explore all options for allowing a warning, instead of a sanction, to be issued in response to any claimant’s first sanctionable failure. It should set out these options in its response to our report, identify the simplest approach, and commit to introducing the necessary legislation by May 2019. The policy should be based on lessons learnt from the recently announced pilot. The Department must ensure that under both the pilot and subsequent policy reforms:

Decision-making and the burden of proof

118.As already explained, decision-makers must judge whether a claimant’s failure to comply with their conditionality was reasonable.258 The DWP explained that this should be based on information provided by the work coach about the claimant’s individual circumstances, including any complex need or vulnerability, and any explanation provided by the claimant for why they failed to comply.259 Evidence to our inquiry highlighted two main flaws with this process.

119.First, witnesses noted that, unlike work coaches, decision-makers did not know the claimant and lacked insight into their circumstances gained through a personal relationship. In written evidence, Dr David Webster described consideration of sanction referrals by decision-makers as “perfunctory” and “bound to be ill-informed” because they had no contact with the claimant.260 He said this “virtual rubber stamp” was demonstrated by the fact that 96% of JSA referrals for ‘not actively seeking work’ resulted in a sanction.261 Luke O’Donnell felt decision-makers were “far removed” and had “no idea what is going on”. He said:

[Decision-makers] need to communicate more with your work coach because you do build a relationship with your work coach. Your work coach knows you and knows your case … They understand what is going on and can advise. They can say, “Come on. Don’t be ridiculous. Applying a sanction in this case is silly”.262

120.Second, it is up to the claimant to prove why they should not be sanctioned rather than for the decision-maker to prove why they should be sanctioned. Furthermore, claimants can only challenge a sanction once the decision to impose it has been made. Tony Wilson argued that this did not “observe the rules of natural justice”.263 He explained:

You sanction first and then you require the individual to submit evidence to prove that they didn’t cheat, rather than requiring the accuser to prove that they did. The burden of proof is the wrong way [around].264

121.The Public Law Project agreed, stating “it is a system of imposing a punishment immediately, without adequate opportunity for claimants to provide explanations or objections until after a sanction has already been imposed”.265 The Law Society of Scotland suggested that claimants should be presented with the evidence for why a sanction is being imposed and should be able to challenge it before the sanction takes effect.266 It said that another “compelling incentive” to get decisions right in the first place was:

The not insignificant cost to the taxpayer of dealing with the consequential appeals to the First-tier Tribunal, which in 2016–17 amounted to £103 million (which does not include the cost to the DWP of undertaking MR reviews).267

122.Universal Credit is built on a personal relationship between work coach and claimant. Yet the decision to impose a sanction is made by someone who has never met the claimant and who cannot be expected to understand fully the circumstances that led to them to fail to comply. While we understand the importance of an independent decision-maker, we believe the process would benefit from the insight of the claimant’s work coach.

123.Sanctions must be a last resort and claimants should be able to challenge the decision before it is imposed. It is in the Government’s interest to get the decision right first time. Not only would it minimise the administrative burden of challenges but, more importantly, it would mitigate the potential harm caused by an incorrectly imposed sanction.

124.We recommend that when a work coach refers a claimant for a sanction, they are required to include, in the information they send to the decision-maker, a recommendation on whether a sanction should be imposed. This should be based on their knowledge of:

125.Based on this recommendation and the other information provided, the decision-maker should make a “provisional decision”. This decision must be communicated clearly to the claimant, together with the evidence on which it is based. The claimant should then have 30 days either to challenge this evidence or actively opt not to provide further evidence. If the claimant has not confirmed receipt the decision-maker must make further efforts to contact them.

The figure below shows the process with our recommendations incorporated.

218 Q269

219 Gingerbread (ANC 0080), Crisis (ANC 0065), Child Poverty Action Group (ANC 0056)

221 55% of original Universal Credit decisions resulted in a sanction being applied; when escalated 72% of UC mandatory reconsiderations resulted in a sanction being applied; but at appeal only 19% of UC sanction decisions were upheld.

222 Inclusion London (ANC 0026)

223 Coventry Citizens Advice (ANC 0049)

224 Shaw Trust (ANC 0086)

225 Welfare conditionality Project (ANC 0079)

226 NHS Health Scotland (ANC 0045)

227 Child Poverty Action Group (ANC 0056)

228 Child Poverty Action Group (ANC 0056)

229 National Audit Office, “Benefit sanctions”, November 2016

230 Q300

231 Sanctions, support and service leavers: welfare conditionality and transitions from military to civilian life project (ANC 0036), Luke O’Donnell (ANC 0095)

232 Q154 [Luke O’Donnell], Q65, Q67 [Jen Fidai]

233 Child Poverty Action Group (ANC 0056), Q188

234 Child Poverty Action Group (ANC 0056)

235 Child Poverty Action Group (ANC 0056)

236 House of Commons Library, “Work and Health Programme”, January 2018

237 Dr David Webster (ANC 0019)

239 Department for Work and Pensions, “Government’s response to the Independent review of the operation of Jobseeker’s Allowance sanctions validated by the Jobseeker’s Act 2013”, Cm 8904, July 2014

241 Q40

242 Q40

243 Feeding Britain (ANC 0072), Employment Related Services Association (ANC 0066)

244 Department for Work and Pensions (ANC 0083)

245 The Law Society of Scotland (ANC 0073)

246 The Law Society of Scotland (ANC 0073)

247 Child Poverty Action Group (ANC 0056)

249 Committee of Public Accounts, Forty-second Report of Session 2016–17, Benefit sanctions, HC 775, Matthew Oakley, “Independent review of the operation of Jobseeker’s Allowance sanctions validated by the Jobseeker’s Act 2013”, July 2014

250 HM Treasury, “Treasury Minutes Progress Report”, Cm 9566, January 2018

251 Welfare Reform Act 2012, section 26 and section 27

252 HC Deb, 21 May 2018, col 32WS

253 See for example, Gingerbread (ANC 0080), The Law Society of Scotland (ANC 0073), Citizens Advice (ANC 0067), Employment Related Service Association (ANC 0066), Centrepoint (ANC 0060), Child Poverty Action Group (ANC 0056), Feeding Britain (ANC 0072), Joseph Rowntree Foundation (ANC 0068), The Shaw Trust (ANC 0086), Waltham Forest Stand Up for Your Rights (ANC 0082)

254 Citizens Advice Newcastle (ANC 0051)

255 The Shaw Trust (ANC 0086)

256 Gingerbread (ANC 0080)

257 Child Poverty Action Group (ANC 0056)

258 Department for Work and Pensions (ANC 0083)

259 Department for Work and Pensions (ANC 0083)

260 Dr David Webster (ANC 0019)

261 Dr David Webster (ANC 0019)

262 Q122

263 Q32

264 Q32

265 The Public Law Project (ANC 0037)

266 The Law Society of Scotland (ANC 0073)

267 The Law Society of Scotland (ANC 0073)

Published: 06 November 2018