The National Audit Office has just produced a critical report on Benefit Sanctions. Of course they were only looking at sanctions within the official dialogue of getting people into work – where we all know they score very badly. But sanctions were never really about this. After all, there aren’t enough jobs. What the NAO doesn’t discuss is the unspoken agenda, where sanctions have proved very effective in disciplining people on benefits and in helping to create workers who dare not protest about their pay and conditions for fear of ending up unemployed and potentially destitute. You don’t even need to keep sanctioning people at such a high rate to achieve this – just enough to maintain a fear of being sanctioned.

Nevertheless, the NAO’s criticism provides an important tool with which to attack the credibility of this pernicious system – and DAVID WEBSTER has provided a summary of the KEY POINTS:

*  The report is generally critical. It uses a ‘traffic light’ scoring system. On sanctions, DWP scores:  red 2, red/amber 1, amber 3, amber/green 3, green 0. (Figure 1, p.11, Figure 8 p.21 and Figure 20, p.38)

*  A recurring theme is the lack of evidence to support the sanctions regime, and the DWP’s unwillingness to make use of its own data to evaluate it or to collaborate with outside researchers. The report is particularly critical of the DWP’s reliance on ‘international evidence suggesting that broadly some form of sanction has an effect’. (para.23)  It repeats the call for a wide review of sanctions made repeatedly by the House of Commons Work and Pensions Committee. (para.24)

*  Using Work Programme data, the NAO did its own analysis of sanctions’ employment effects. This found that JSA sanctions had a large effect in getting claimants off benefit, but they were as likely not to find work as they were to find it. There was no positive effect on earnings for those who found work.

*  The report finds that ESA sanctions actually reduced claimants’ likelihood of working. This bears out the findings of the important report by Catherine Hale, Fulfilling Potential? ESA and the fate of the Work-Related Activity Group (2014).

* The report finds that the rise and fall in referrals over the period 2010 to 2016 cannot be explained by changes in claimant behaviour. (para.13, p.8) This supports the conclusions of my analysis published at www.cpag.org.uk/david-webster, although in other respects the conclusions are different.

* The report comments that sanctions are not rare. It finds that of all people who claimed JSA at any point between 2010 and 2015, 24% were sanctioned, before challenges. (Figure 5, p.16) The only previous published figure of this type (in FoI response 2014-4972) showed that 22.3% of the 8,232,560 individuals who claimed JSA over the five year period 2009/10 to 2013/14 inclusive, were sanctioned, after challenges. After allowing for the pre-/post- challenge difference, these figures are similar (about 10% of sanctions were overturned over these periods). DWP ministers and officials have deliberately and persistently misled politicians and the public by quoting the monthly sanctions rate of around 5% as if it meant that only 5% of claimants are ever sanctioned.

* The NAO report explains why the DWP hasn’t been publishing statistics on Universal Credit sanctions: it hasn’t been collecting them. Only from Sept 2016 has the DWP been recording whether UC decisions relate to sanctions or to other matters. (Note 4, Figure 2 p.13)

* The NAO report does not give statistics on Universal Credit sanctions, but it does show that the sanction referral rate for UC, at 11.7% of claimants per month, is approaching twice what it is for JSA (6.5%) (Figure 2, p.13) This implies that the UC sanction rate is also likely to be double that for JSA. The report also says that decision making for UC sanctions is understaffed, with 42% of UC sanction decisions in August 2016 taking more than 4 weeks while 90% of sanction referrals for other benefits are decided within 5 working days.

*  In August 2015 the UK Statistics Authority made recommendations to DWP for improvement of its sanctions statistics and removal of misleading aspects including the misrepresentation of the proportion of JSA claimants who are sanctioned. Very little has happened since and the NAO report urges DWP to get on with implementing the UKSA’s 5 recommendations, which are listed in para.3.5.

* The NAO finds that some Work Programme providers make more than twice as many sanction referrals as other providers within the same geographical area, even though claimants are randomly allocated so that the caseload characteristics are identical for each provider. (para.2.12) It finds that where providers referred more people for sanctions, they had a worse employment performance. On average, the best provider in an area achieved 6% more employment outcomes and its participants received 20% fewer sanctions. (Figure 22, p.42)

* A particularly embarrassing finding for DWP is that it applies sanctions to a similar proportion of referrals from every Work Programme provider, whether they have a high or a low referral rate – in other words, while some providers are making an assessment of whether they should make a referral, DWP is not making genuine assessments of whether claimants should be sanctioned. (para.2.12 and Figure 13, p.29) Not surprisingly therefore, the report also finds that 26% of Work Programme sanctions are overturned compared to 11% of those imposed directly by Jobcentres.

* The NAO estimates that the amount of money not paid to claimants as a result of sanctions (sanction value minus hardship payments made) was about £97m in 2015. On the basis of a straightforward pro rata calculation, this supports the estimate of £332m which I previously made for 2013/14. The difference is due to the big fall in sanctions between 2013/14 and 2015.

*  DWP has made no overall assessment of the costs and benefits of the sanctions regime including on other public services and should do so. (para. 3.20)

 

Triage seem to be keeping up their exemplary level of abuse. On Monday we met Steve who couldn’t understand why his ESA had been stopped. He is on the assessment phase: he has submitted his detailed medical form (ESA50) and is still waiting for a Work Capability Assessment. He had already had problems with his form getting lost in the system and miraculously found again, but all had seemed OK and his doctor’s lines were up to date. Only, his money never appeared in his bank account. With no credit in his phone, he went to his mother’s work-place, and after an hour-long phone call with the DWP was again told that they didn’t have his form, and advised to go to the jobcentre. I went with him into the building, and a remarkably helpful, if slightly puzzled, advisor looked up his case and told us that his claim had actually been shut down as the Work Programme Provider, Triage, had reported that he had failed to do something. Steve explained that last time he had been in the jobcentre his advisor had told him that since he was now getting ESA and had a doctor’s line he no longer had to go to Triage, and that she would inform Triage of this fact. So either she never passed on this message, or, as has happened so often in the past, Triage took the message and ignored it. He would now have to appeal against the stopped claim, but the woman who was helping us suggested that it might still be possible to get Triage to rescind their complaint. So off we went down the road to Triage. On reflection, it would have been better for someone else to have gone with Steve. As soon as they saw me they panicked and refused to let us in on the grounds that I was going to occupy the building again. I told them that I would go so they could see Steve without me, but even with me gone, they refused to let him in, and then laughed at his predicament.

We have made contact with Welfare Rights who should be able to get this resolved, and we were able to sort out immediate help in the form of a food parcel and an application for a Scottish Welfare Fund Grant. Although Steve was understandably angry, he was not surprised, as this had not been his first experience of Triage’s interpretation of ‘supporting’ people into work.

 

The best thing about the Autumn Statement was not having to listen to Osborne’s uber-smug tones. The section on welfare was very short, but then there is not much left to cut.

After all the talk about Just About Managing families, there had been some hopes raised that the government might reverse the effective cuts for people moving from Tax Credits onto Universal Credit, but those hopes were soon crushed (cue headlines about ‘no JAM today’). Remember all the excitement about Tax Credit cuts being rejected by the House of Lords? Well, it was only ever a delay, as the move from Tax Credits to Universal Credit is bringing the cuts in by the back door. The one positive change is a very small drop in the taper rate for people earning and on Universal Credit. Instead of losing 65p in benefits for every pound earned, they will lose only 63p – which is still an incredibly high effective tax rate. Even IDS has protested that this change is not enough. For the people who will be losing thousands of pounds through the move from Working Tax Credits to Universal Credit, the change in the taper will restore only a few hundred. Meanwhile, the rise in the minimum wage is actually less than would have been expected if it is to reach £9 by 2020, as Osborne had previously promised.

And though pensioners retain the triple lock for now (i.e. the manifesto promise to increase the state pension annually by 2.5 per cent, or in line with inflation or wage growth – whichever is highest), there were clear indications that this is in the government’s sights for after 2020.

Even within its own terms the government yet again failed to meet its fiscal targets – which it solved by moving the goal posts. This move is fraught with potential danger, as Richard Murphy explains:

‘…we learned fiscal rules can be abandoned with impunity as Osborne’s were rejected without a backward glance. That which replaced it was worse though in many ways. First the books will be balanced, but we don’t know when. So that’s austerity forever. Second, debt as a proportion of GDP will shrink. That’s a licence for privatisation. Third, benefits [i.e. total benefit spending] will be capped. This is a plan for continued shrinking of the state at cost to ordinary people, and the social safety net.’ And Murphy describes the proposed investment in infrastructure as ‘peanuts’.

 

Just a short posting from last week’s stall as it was mercifully quiet. However we did speak to one woman whose ‘job coach’ seems to have taken on board the DWP mission so thoroughly that she is never off duty. So enthusiastic was she about the benefits of unpaid ‘work experience’ that she stopped the woman when she saw her in the street to try and persuade her to take up a ‘work experience’ opportunity. Even if well-intended, this seems to us far from professional and akin to harassment. The woman has recent experience in retail and was far from enthusiastic about working for nothing in Tesco’s café. We were able to reassure her that ‘work experience’ is not compulsory and that it should be made clear if any activity is mandatory and sanctionable (if in doubt ask). And we agreed that anyone working for Tesco should be paid by Tesco. (The picture is from an Edinburgh Coalition Against Poverty protest in 2012.)

We also talked with someone who had had a temporary job at The Range and told us that reading our posts about the extensive use of ‘work experience’ there made her realise why they had had no need to take her on permanently. In fact, she said they were clearly doing their best to get rid of all long-term employees. She described the strange atmosphere on paydays, when some of the staff received their brown envelopes but the people on benefits who had been working alongside them got nothing.

And talking of over-diligent job-coaches – we received this account from a friend in Glasgow:

‘Was threatened with a sanction for being 3 mins late the other week by my new advisor. The next-time I signed on I was asked why I never turned up for my last signing as she had failed to put through my details!! Lucky I had brought the letter threatening my sanction which was proof of my attendance. No apology just more stress.’