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)