Benefit Sanctions Contents

Conclusions and recommendations

Evidence on the effectiveness of sanctions

1.At best, evidence on the effectiveness of sanctions is mixed, and at worst, it shows them to be counterproductive. The Coalition Government had little or no understanding of the likely impact of a tougher sanctions regime when it was introduced in 2012. It said the policy would be reviewed on an ongoing basis to understand its impact and the extent to which it was achieving its objectives. But six years later, it is none the wiser. The lack of any such evaluation is unacceptable. Furthermore, without evidence to support the significantly longer sanctions introduced, or data to understand the behavioural impact of escalated sanctions for repeated failures, the policy appears to be nothing other than arbitrarily punitive. The high rate of sanctions under Universal Credit only increases the urgency with which the Government must understand fully the effect of the 2012 reforms. Crucially, if such research suggests changes are required, the Government must be prepared to respond accordingly. (Paragraph 23)

2.We recommend that the Department urgently evaluate the effectiveness of reforms to welfare conditionality and sanctions introduced since 2012 in achieving their stated policy aims. The Department should commission an independent review of its methodology for this work. We further recommend that higher level sanctions should be reduced to two, four and six months for first, second and subsequent failures to comply, until the Department can present robust evidence that longer sanctions would be more effective at moving people into work. (Paragraph 24)

3.It is one thing for a sanction to result in short-term hardship as a consequence of breaching an agreed work-related requirement. It is something else entirely for a sanction to affect someone’s physical and mental well-being, drive them into debt and leave them on the brink of destitution. We agree that research to understand the impact of sanctions would be complicated, but we do not agree that this is a reason for the DWP not to try. There is too much at stake not to. (Paragraph 30)

4.We recommend that the Department include in the evaluation we have recommended an assessment—to whatever extent is feasible—of the impact sanctions have on claimants’ financial and personal well-being, as well as on wider public services. It should take expert advice on how to achieve this and consider commissioning external research if necessary. (Paragraph 31)

Vulnerable claimants

5.Children play no part in a failure to comply with conditionality, yet when a sanction is imposed they feel the effects just as acutely. Any positive effect a sanction might have is outweighed by the risk that children’s welfare becomes the collateral damage. This risk is all the more real for children in single parent families. While it is welcome that a record proportion of single parents are in work, we are concerned about the devastating impact sanctions can have on this vulnerable group of claimants and their children. In the absence of more robust evidence that sanctions themselves are driving the positive trend in single parents’ employment outcomes, it is hard to justify the risks they pose. (Paragraph 36)

6.The evaluation we have recommended must include an assessment of the role played by conditionality and sanctions in improving employment outcomes for lone parents. If a robust causal relationship is not found, there would be a strong case for the Department to end conditionality and sanctions for this group. In the meantime, the Government should amend regulations to ensure that a sanction rate of 20% applies to any claimant who is the responsible carer for a child under the age of five, or a child with demonstrable additional needs and care costs. (Paragraph 37)

7.Care leavers acknowledge their responsibilities associated with receiving benefits. In return, the Government should acknowledge care leavers’ challenging circumstances and consequent vulnerability. But care leavers are currently being let down by the system, with often devastating consequences. What is worse, the inability to identify care leavers under Universal Credit risks the Department losing sight of them altogether. ‘Pinning’ information—which is like sticking an electronic post-it note on someone’s file—sounds like a good way for work coaches to communicate better the circumstances surrounding someone’s claim. But it is not the same as having to identify routinely, through a simple tick box, whether someone is a care leaver. The Government has a duty to monitor the impact of its policies on all benefit claimants, but as a corporate parent, it has a unique and particular duty to promote the wellbeing of care leavers. (Paragraph 45)

8.We recommend that the Department review any guidance or restrictions on working practices, including information sharing, between personal advisers and work coaches for care leavers. It should follow successful examples of joint protocols already in place and, in particular, should consider:

a)requiring work coaches never to apply a sanction until they have made contact with the claimant’s personal adviser and taken into consideration the information they receive; and

b)enabling care leavers to give consent for their work coach to discuss any matter regarding their benefit claim with their personal adviser for a specified period of time. (Paragraph 46)

9.We further recommend that:

10.As with care leavers, the Department risks losing sight of disabled people if it does not introduce a specific marker under Universal Credit. It cannot rely on work coaches ‘pinning’ information. (Paragraph 51)

11.We recommend that the Department introduce a marker for disability under Universal Credit. (Paragraph 52)

12.The Government should be commended for its commitment to improving employment outcomes for disabled people and those with health conditions. But it presented no evidence that conditionality and sanctions are helping achieve this. We are not convinced by the Government’s argument that exempting disabled claimants from conditionality would be doing them a “great disservice”. Conditionality and sanctions neither work for disabled claimants, nor further the Government’s objectives. We are convinced of the urgent need for change. (Paragraph 62)

13.We recommend that the Department immediately exempt the following groups from conditionality and sanctions:

We further recommend that the Government bring together experts and third sector representatives to consider how voluntary employment support could best be provided to these groups of claimants. (Paragraph 63)

Universal Credit and sanctions

14.We stand by our predecessor committee’s conclusion in 2016 that in-work progression has the potential to be revolutionary in its ability to break the cycle of people getting stuck in low paid, low prospects employment. But this great opportunity could quickly be undermined if it is coupled with conditionality and sanctions, particularly if work coaches—the key agent here—have even greater and greater workloads. The Government’s own research shows that the effect of sanctions is not conclusive. Any evidence that the threat of a sanction motivates claimants to comply is outweighed by the possible unintended consequences of a sanction, once imposed. The risks are even greater given that work coaches are not yet sufficiently trained or equipped to implement this policy consistently. In light of this, the Department would be unwise to press ahead with in-work conditionality. (Paragraph 76)

15.We recommend that the Department does not proceed with its policy of applying conditionality and sanctions to in-work claimants until Universal Credit has been fully rolled out. Even then, the policy should only be introduced on the basis of robust evidence that it will be effective at driving progress in work. In the meantime, it should focus its efforts on understanding better:

16.The objective of a sanction is to incentivise people to move into work. But if someone is no longer able, or required, to look for work, the sanction serves no purpose. Worse, it imposes hardship upon people who are particularly vulnerable according to the Department’s own assessment. Any message the DWP sends through the continued application of a sanction will be interpreted as unfair and punitive, and risks eroding the relationship between claimants and the Department. (Paragraph 81)

17.We recommend that sanctions are cancelled when a claimant’s change in circumstance means they are no longer subject to the requirement that led to their sanction in the first place. (Paragraph 82)

18.In theory, sanctions should only ever withdraw a maximum of 100% of the UC standard allowance. Other elements, such as for housing and children should therefore be unaffected. But in reality, this is not always the case: when someone is already receiving less than 100% of their standard allowance, for example because of deductions as result of rent arrears, the sanction imposed is still for the full amount. When there is no more standard allowance to be withdrawn, the sanction necessarily eats into other elements, putting housing and the welfare of children at risk. This is clearly not the Government’s intention and it requires urgent resolution. (Paragraph 84)

19.We recommend that any deductions from a claimant’s standard allowance are postponed when a sanction is applied, for the duration of that sanction, to ensure other elements are protected. (Paragraph 85)

Setting conditionality requirements

20.The Claimant Commitment is the bedrock of the sanctions regime and, if done well, it can be a powerful tool for driving positive engagement and minimising inappropriate sanctions. But if done badly, it becomes the root of ineffective, inappropriate and potentially deeply harmful sanctions. We do not doubt that work coaches are doing their best, but the model in which they currently operate makes it near-impossible for them to get it right every time, for every claimant. The system cannot rely on claimants knowing all available easements and pouring forth all the details of their personal lives to their work coach, who has neither the time nor the expertise to explore every potential avenue of a claimant’s situation to understand if, and how, their conditionality should be flexed. (Paragraph 97)

21.We recommend that the Department:

Imposing a sanction - referrals and decisions

22.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. (Paragraph 109)

23.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. (Paragraph 110)

24.We recommend that:

in relation to failure to accept an offer of work:

ix)availability and cost of:

25.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. (Paragraph 112)

26.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. (Paragraph 113)

27.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. (Paragraph 116)

28.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:

29.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. (Paragraph 122)

30.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. (Paragraph 123)

31.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:

32.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. (Paragraph 125)

The figure below shows the process with our recommendations incorporated.

Hardship payments

33.Hardship payments are made to those who would otherwise be left with nothing. A claimant who has lost 100% of their standard allowance because of a sanction can receive 60% of that allowance as a hardship payment. In effect, this is a reduced rate sanction of 40%. We understand the Government’s rationale for recovering this money. But as this is apparently not financially motivated, and the people repaying hardship payments are necessarily on the brink of poverty, we struggle to see how a repayment cap as high as 40% is justified. (Paragraph 131)

34.We recommend that the Government issue revised guidance to all work coaches, and if necessary amend regulations, to ensure recovery of hardship payments is only ever at a rate that is affordable for the claimant, no matter how low, with the default being 5% of the claimant’s standard allowance. This action is needed in addition to, not instead of, the longer-term review of recovery caps recommended in our report on Universal Support. (Paragraph 132)





Published: 06 November 2018