Benefit Sanctions Don’t Work: National Audit Office.
“Sanctions on benefits have a high opportunity cost, not only for those who are dependent on those benefits if sanctions are applied, but for the efficient use of public resources. “We acknowledge the department’s effort to reduce its error rate on sanctions, but we think there is more to do in terms of reducing them further, and in reducing the notable differences in sanctions applications between comparable localities.”
Amyas Morse, head of the National Audit Office, 30 November 2016 *
The New Statesman has just tweeted on this report,
Damning proof that the government has no evidence benefits sanctions work ALISON GARNHAM
Anyone remember evidence-based policymaking? For the DWP, it appears from today’s National Audit Office (NAO) report on sanctions, it is at best a dim and distant memory.
When the Department made substantial changes to sanction rules in 2012 – marking a step-change in their scope and severity – it could not quantify the financial impact of the changes, and it said it could not predict whether the changes would create savings. Since then, it has made no attempt to track the actual costs and benefits of the changes.
As one reads through the NAO’s report, it becomes increasingly clear how their task – to assess the value for money of sanctions policy – is thwarted at every turn by lack of evidence. The words “the Department does not know”, and mentions of data that the Department does not analyse or collect, recur throughout. The government is evidently operating blind, on an issue that could scarcely be more important: the decision actively to remove from already-poor individuals and households the basic means of their subsistence.
Disturbingly, there are several indications that this ignorance is wilful. The DWP has administrative data on individual benefit histories, sanctions and employment, and data on local sanction rates and performance, but it chooses not to use this body of evidence to evaluate the impacts of sanctions. The government, via the Economic and Social Research Council, has funded a £2m research project from 2013 to 2018 to understand the role and impact of conditionality in social security. In 2015, the DWP advised its Work Programme providers not to take part in focus groups for the project. And, in March 2015, the Work and Pensions Committee called on the DWP to commission “a broad independent review of benefit conditionality and sanctions, to investigate whether sanctions are being applied appropriately, fairly and proportionately”. After taking seven months to respond, the Department refused.
What we do know beyond doubt is that sanctions cause immense hardship to those who are subjected to them. This is in a sense a question of simple logic – take away a person’s primary, meagre source of sustenance, and they will suffer. Indeed, that is the Department’s stated intention: its own guidance to decision makers acknowledges that ‘it would be usual for a normal healthy adult to suffer some deterioration in their health’ if left without income for two weeks (JSA sanctions start at twice this duration). Decision makers assessing potential hardship payments should be looking only at those who would “suffer a greater decline in health than a normal healthy adult” [original emphasis]. But it is also reflected in a range of direct evidence, not least of which is the link between sanctions and food bank use: research by Child Poverty Action Group and others found that between 19 and 29 per cent of visits to the food banks we studied were caused by sanctions.
If that’s bad enough, there’s this.
Meanwhile, for Work Programme providers, on average, higher use of sanctions is associated with lower performance in terms of employment outcomes. Though this does not prove causality – it could be, for example, that weak Work Programme providers may use sanctions more because they are ineffective with their other approaches – it may suggest that differences in deterrence effects of sanctions are weaker than other factors explaining performance. Again, no evidence in favour of sanctions here.
Read the full article at the New Statesman.
The Guardian says,
Sanctions on welfare payments which have allegedly caused thousands of claimants to fall into hardship and depression are being handed out without evidence that they actually work, Whitehall’s official spending watchdog has found.
The Department for Work and Pensions is also failing to monitor thousands of people whose benefits are being cut or withheld while many are being pushed outside the benefits system, said the National Audit Office.
Auditors concluded there has been a failure to measure whether the government is saving money while the application of the sanctions regime varies across the country and from job centre to job centre.
The report, issued on Wednesday, has been seized upon by critics of the government’s sanctions regime who say it is punitive, wasteful and not aimed at finding people work.
The findings could cause difficulties for Damian Green, the welfare secretary, who insisted this week that the sanctions contributed to a fairer society and were an important part of the benefits system.
Labour MP Meg Hillier, who chairs the public accounts committee, said: “Benefit sanctions punish some of the poorest people in the country. But despite the anxiety and misery they cause, it seems to be pot luck who gets sanctioned.
“While studies suggest sanctions do encourage some people back into work, other people stop claiming but do not start working and the Department for Work and Pensions has no record of them. If vulnerable people fall through the safety net, what happens to them?”
More than 1 million unemployed benefits claimants have to meet certain conditions, such as showing they are looking for work, to receive jobseeker’s allowance, employment and support allowance, universal credit and income support.
Almost a quarter of claimants (24%) between 2010 and 2015 received a sanction, the report said. A four-week penalty can mean a claimant over-25 losing £300.
In 2015, 800,000 claimants were referred to the DWP for possible sanctions, the report said. Of those, half were then sanctioned across at least one of four benefits.
The Department for Work & Pensions (DWP) is not doing enough to find out how sanctions affect people on benefits, according to today’s report from the National Audit Office.
A benefit sanction is a penalty imposed on a claimant meaning a loss of income when someone does not meet conditions like attending jobcentre appointments. Sanctions are not rare: 24% of Jobseeker’s Allowance claimants received at least one between 2010 and 2015. Use of sanctions varies substantially, with some Work Programme providers referring twice as many people for sanctions as other providers in the same area.
Today’s report finds that jobcentres’ monthly sanction referral rate for Jobseeker’s Allowance claimants rose to 11% in March 2011 then fell to 3% in December 2015. There are many reasons for this variation but it cannot be fully explained by changes in claimant behaviour. The NAO concludes it is likely that management focus and local work coach discretion have had a substantial influence on whether or not people are sanctioned.
Today’s report recommends that the Department for Work & Pensions carries out a wide-ranging review of benefit sanctions, particularly as it introduces further changes to labour market support such as Universal Credit. The DWP has commissioned independent reviews and taken steps to improve processes but rejected previous calls for a wider review. The NAO finds that the previous government increased the scope and severity of sanctions in 2012, and recognised that these changes would affect claimants’ behaviour in ways that were difficult to predict.
The NAO report finds that the Department is meeting target timescales for most sanction decisions but is missing its Universal Credit targets. In August 2016, 42% of decisions about Universal Credit sanctions took longer than 28 working days.
International studies show people who receive sanctions are more likely to get work, but the effect can be short-lived, lead to lower wages and increase the number of people moving off benefits into inactivity. The DWP has not used its own data to evaluate the impact of sanctions in the UK. The NAO undertook preliminary analysis of the impact of Work Programme sanctions on employment, inactivity and earnings. The results show the Department should do more to understand these sanctions outcomes.
Sanctions have costs, for people who receive them and for the government. The Department does not track the costs and benefits of sanctions, but estimates that it spends £30-50 million a year applying sanctions, and around £200 million monitoring the conditions it sets for claimants. The NAO estimates the Department withheld £132 million from claimants due to sanctions in 2015, and paid them £35 million in hardship payments. The overall impact of sanctions on wider public spending is unknown.
From, “Key Findings”:
10. Designing sanctions 10 How people respond to sanctions is uncertain. The Department expects most claimants will not be sanctioned and that the deterrence effect of sanctions will encourage them to comply with conditions. However, the Department has limited evidence on how people respond to the possibility of receiving a sanction, or how large this deterrent effect is in practice. Direct effects on people who receive sanctions will also be important; we found 24% of Jobseeker’s Allowance claimants receive a sanction at some point (paragraphs 1.8 to 1.10 and Figures 4 and 5).
11 The previous government increased the scope and severity of sanctions. The 2012 reforms expanded the range of claimants subject to conditions and increased the maximum length of Jobseeker’s Allowance sanctions from 26 to 156 weeks. When it made the changes the Department recognised that they would affect claimants’ behaviour in ways that were difficult to predict (paragraphs 1.11 to 1.13 and Figure 6.
12 The Department’s changes to employment support have introduced risks for its use of sanctions. The Department has changed its employment support and approach to sanctions in response to identified problems. For example it has put more emphasis on one-to-one relationships between staff and claimants to encourage more appropriate conditions. Changes introduce new risks. While greater flexibility for jobcentre staff to tailor conditions can make them more appropriate, it also increases the risk of inconsistency in how sanctions are used (paragraphs 1.14 to 1.18 and Figure 7).
21 The Department does not track the costs and benefits of sanctions. Potential benefits include increased and faster entry into employment leading to lower benefit spending and higher tax revenues. Possible wider costs include the direct impact on people who get sanctioned, such as financial hardship or depression. Supporting them may lead to higher public spending in areas such as local authority funded welfare support. The Department does not know these wider costs and benefits (paragraphs 3.14 to 3.20 and Figure 23).
Unfortunately the recommendations are far from satisfactory.
24 As the Department introduces further changes to labour market support, we recommend it carries out a wide-ranging review of sanctions.
In particular: a The Department should support better understanding of the impact of sanctions. It should use its data – including real time information on earnings – to track the direct and indirect impact of sanctions on the likelihood, duration and quality of employment, including for those with barriers to work. It should adopt an open and collaborative approach to working with academic researchers and third-party organisations.
b The Department should assess the wider cost of sanctions to central and local government. It should track how sanctions affect demand for publicly funded services.
c The Department should use information to continuously improve its approach to sanctions. The Department has mechanisms for learning and improvement. It should expand its use of feedback from each stage of the sanctions process to fix recurring problems that lead to unnecessary referrals and overturned decisions.
d The Department should improve both internal management information and published statistics about sanction processes, variation and trends. It should demonstrate that it has satisfied the UK Statistics Authority that it has met all recommendations on its published statistics.
e The Department should model future demand for Universal Credit decisions. A large decision backlog already exists. The Department needs to understand likely growth in demand and decision-makers’ capacity to meet it.
f The Department should explore ways to reduce variation in referrals from providers. The Department needs to better manage variation as it develops new programmes such as the Work and Health Programme.
Get Rid of the Sanctions Regime!