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Select committee inquiry

Benefit sanctions policy beyond the Oakley review

Closed

Work and Pensions Committee · Opened 6 November 2014 · Closed 12 May 2016

19 recommendations · 7 conclusions
Inquiry on parliament.uk ↗

What the inquiry looked at

“Benefit sanctions involve the suspension of benefit payments for a set period, where claimants fail to meet certain conditions, such as attendance at Jobcentre appointments or participation in mandatory work schemes. The sanctions regimes for both Jobseekers Allowance (JSA) and Employment and Support Allowance (ESA) were strengthened by the Welfare Reform Act 2012 (external site) . Matthew Oakley conducted an independent review of JSA sanctions in relation to mandatory back to work schemes (i.e. principally sanctions affecting JSA claimants participating in the Work Programme). The Oakley Review (PDF 566KB) was limited; this inquiry is broader. It considers ESA sanctions, including whether the current ESA regime is appropriate and proportionate for jobseekers with ill health and disabilities. It also considers whether the JSA and ESA regimes are achieving their policy intentions; the wider impacts on claimants; and possible alternatives. Submissions should address the terms of reference issued by the Committee.”

The committee's words, from the inquiry page on parliament.uk ↗.

What it found

In the committee's words, from the summary of 5th Report - Benefit sanctions policy beyond the Oakley Review ↗

Unemployment benefits have always been conditional. A system of disallowances where claimants do not meet the underlying entitlement conditions, including being involuntarily unemployed, available for work, and actively seeking work, has existed with some variations since the introduction of Unemployment Benefit in 1911.

Benefit sanctions—cessation of payments for a period where claimants fail to meet a broader range of more precise conditions—have been part of the system for at least the last four decades. The stringency of the benefit sanctions regime has increased under successive governments since the 1980s, most recently in the Welfare Reform Act 2012; claimants can be required to undertake a greater number, and greater range, of actions to find work.

These more “active” benefit regimes are the norm in developed economies.

Despite the apparent mainstream political consensus, sanctions are controversial, because they withhold subsistence-level benefit payments from people who may have little or no other income. We agree that benefit conditionality is appropriate and necessary, but it is essential that any system draws on robust evidence on the efficacy and impacts of sanctions; has clear and coherent rules; has strong safeguards to protect the vulnerable; is fair and proportionate; and effectively mitigates the risks of severe financial hardship. The sanctions regime, as currently applied, does not always achieve this, despite the existence of hardship payments and efforts by Government to improve efficacy.

A broader independent review

Issues which were set out in our January 2014 Report, Jobcentre Plus in the reformed welfare system, are not rehearsed at length in this Report; however, in the light of additional evidence received, we reiterate our recommendation that:

The Department for Work and Pensions (DWP) establish 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 additionally examine the clarity and coherence of the legislative framework for benefit sanctions policy, to ensure that the basis for sanctioning is clearly defined, and safeguards to protect vulnerable groups clearly set out.

Full implementation of the Oakley Review

The Oakley Review of Jobseekers Allowance (JSA) sanctions in relation to Back to Work Schemes was welcome, and the steps the Government has so far taken, particularly in relation to improving the clarity of its information and communications, will go some way towards improving claimants’ understanding of their obligations and of the sanctioning process.

What the government said

The government responded on 22 October 2015.

Summary written by Accountability Index from the government's response.

The government gives a mixed response: it does not accept the call for a broad independent review of conditionality and sanctions, but it accepts, accepts in principle or accepts in part many of the report's other recommendations.

  • On the independent review, the response is "Not accepted", saying it is "important that we now focus on embedding those changes and improvements including within Universal Credit".
  • On pre-sanction warnings, accepted in principle: it will trial arrangements giving claimants "a warning of our intention to sanction, and a 14-day period to provide evidence of good reason before the decision to sanction is made".
  • On tracking sanctioned claimants' employment outcomes with RTI data, the response is "Not accepted": "There are currently no plans" to do so for sanctioned Universal Credit claimants.
  • On voluntary pilots, accepted: it intends to publish the Individual Placement and Voluntary Early Intervention pilot findings "in summer 2016".

Read the government's response ↗ Read the report ↗ Report an error

How the inquiry ran

Each dot is a dated item listed on this page, from the inquiry's opening on 6 November 2014 to its close on 12 May 2016.

  1. Oral evidence 3 sessions
  2. Report 24 Mar 2015
  3. Government response 22 Oct 2015
  4. Correspondence 2 letters

What it recommended 19 recommendations · 7 conclusions

1We recommend that DWP commission a broad independent review of benefit conditionality and sanctions, to...
Recommended (the committee's words)
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.
2We welcome DWP’s acceptance of the Oakley Review’s findings, and the steps that it has...
Concluded (the committee's words)
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.
3We accept that allowing contracted Work Programme providers formally to accept “good reason” for a...
Recommended (the committee's words)
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”.
4We note that the Department considers that piloting of pre-sanction written warnings and non-financial sanctions...
Concluded (the committee's words)
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 Benefit sanctions policy beyond the Oakley Review 57 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.
5We recommend that DWP clarify, in its response to this Report: the extent to which...
Recommended (the committee's words)
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.
6We agree that benefit conditionality is appropriate and necessary but reiterate our view that it...
Recommended (the committee's words)
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.
7We recommend that the Government does not proceed with in-work sanctions beyond the existing pilots...
Recommended (the committee's words)
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.
8There is evidence that active and conditional unemployment benefit regimes, in which financial sanctions play...
Concluded (the committee's words)
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.
9We recommend that DWP evaluate, by testing different approaches, the relative impacts on movements off...
Recommended (the committee's words)
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 58 Benefit sanctions policy beyond the Oakley Review 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.
10Recently published research emphasises the importance of developing more effective systems for monitoring the destinations...
Recommended (the committee's words)
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.
11We recommend that DWP’s evaluation of the Claimant Commitment includes an assessment of: whether claimants...
Recommended (the committee's words)
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.
12DWP’s new Vulnerability Guidance is a welcome step forward in trying to more routinely identify...
Concluded (the committee's words)
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”.
13We recommend that DWP, drawing on specialist advice from health experts, develop guidance on vulnerability...
Recommended (the committee's words)
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 Benefit sanctions policy beyond the Oakley Review 59 guidance, so that it becomes part of the routine process of developing appropriate and tailored JSA conditionality.
14We note the concern expressed by some witnesses that use of Jobseeker Directions has increased...
Recommended (the committee's words)
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.
15There is evidence that single parent JSA claimants are more likely to receive a non-...
Concluded (the committee's words)
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.
16We recommend that DWP increase training for JCP Work Coaches on the regulatory flexibilities which...
Recommended (the committee's words)
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.
17Employment services professionals believe that strict conditionality, backed up by financial sanctions, is necessary in...
Recommended (the committee's words)
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 60 Benefit sanctions policy beyond the Oakley Review 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.
18We recommend that DWP make a clear distinction—in its processes, its communications with claimants, and...
Recommended (the committee's words)
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.
19We recommend that the Government confirm the steps it has taken to ensure that suspensions...
Recommended (the committee's words)
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.
20Given the complexity of the existing legislation, there is a strong case for a review...
Recommended (the committee's words)
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.
21The very large majority of ESA sanctions relate to claimants’ failures to attend or participate...
Recommended (the committee's words)
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 Benefit sanctions policy beyond the Oakley Review 61 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.
22There is a lack of evidence for the efficacy of financial sanctions in moving claimants...
Recommended (the committee's words)
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.
23We note with concern claimants’ uncertainty over whether a sanction has been applied which, as...
Recommended (the committee's words)
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.
24The improvements DWP has made to its systems and communications should ensure that all claimants...
Concluded (the committee's words)
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 62 Benefit sanctions policy beyond the Oakley Review ensure that the risks of severe financial hardship are more comprehensively mitigated. There should also be signposting for, and access to, welfare advice support.
25We recommend that DWP make hardship payments available from day one of a sanction period...
Recommended (the committee's words)
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.
26It is right that the Department investigates all deaths of claimants resulting from suicide, and...
Concluded (the committee's words)
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.

Evidence

Oral evidence sessions 3

Correspondence 2 letters