Citizens Advice response to Work and Pensions Select Committee inquiry into benefit sanctions
Executive Summary
There have been a number of recent developments in sanctions policy following the Public Accounts Committee report on benefits sanctions which we welcome.
There is however growing evidence from both our own research and that of others, that questions the efficiency and effectiveness of the current sanctions system. Despite recent and ongoing trials in specific areas it is still unclear whether sanctions would be more or less effective if they were less severe.
The current sanctions regime can impose serious hardship which may shift people’s focus away from their job search or reduce work incentives. Repeated or severe sanctions may lead jobseekers to disengage with the employment support system entirely.
As Universal Credit (UC) rolls out and new groups of claimants are brought into the conditionality system there is a need to rigorously test and evaluate how the current system is working.
The current model of sanctions risks undermining the positive intention to help people into secure and suitable work.
Many of the issues highlighted in our response to this inquiry reflect issues we have raised previously in our response to the Public Accounts Committee (PAC) Benefit Sanctions Inquiry (December 2016).
Recommendations
To ensure that the conditionality system leads to the best outcomes in terms of labour market re-entry and engagement with support, the Department for Work and Pensions (DWP) should build on the In Work Progression trial and pilot a series of further randomised control trials (RCTs) to test lower severity levels and a system without financial sanctions against current arrangements including varying sanction amounts and time periods across different groups of claimants.
We do not believe that sanctions are appropriate for disabled people and those with health conditions. Before further consideration of conditionality for this group, the DWP must test the effectiveness of the wider health and work policy programme in getting people closer to the labour market where appropriate. In order to test the effectiveness of support before sanctions DWP should pause conditionality for the ESA work related activity group (WRAG).
DWP should grant an automatic hardship payment to everyone who receives a sanction, so that they can afford essential bills and are not left facing unnecessary hardship. As well as mitigating some of the financial shock, it may help prevent disengagement with employment support services in the longer term.
The need for claimants to repay hardship payments under UC - unlike arrangements for JSA and ESA - should be reconsidered. Repayments create additional financial pressure for jobseekers, which may distract them from looking for work or prevent them from regaining financial stability after a sanction.
Conditionality and sanctions policy cannot be assessed in isolation and should be combined with reviews on what works in employment support. The DWP should review how the process for drawing up more personalised claimant commitments is working under UC - in light of the effectiveness of an individualised approach to conditionality - and the resources currently available to deliver such a system. Expanding the scope of Universal Support, including help to make and complete a UC claim, would enable work coaches to focus more on the provision of employment support.
DWP should also routinely assess the levels of sanction recommendations by individual Jobcentres and Work and Health Programme providers to ensure greater consistency in the application of conditionality and sanctions.
A formal yellow card system should be introduced which provides claimants with a genuine warning in the first instance, rather than an immediate sanction. We look forward to seeing the outcome of the recently announced feasibility study which will test this concept over the coming months.