New evidence suggests welfare sanctions don’t help people into work

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Job Centre Plus sign. © Photo by Richard McKeever

Back in 2018, the Work and Pensions Select Committee recommended that Government evaluate the relationship between welfare sanctions and the likelihood of moving in to work. That analysis was conducted at the time but only published externally last week – some five years later.

Drawing on data from 2016-2018, the report shows that people who have faced a sanction were more likely to stop claiming Universal Credit (UC) without moving in to work than if they hadn’t been sanctioned.

This paints a concerning picture about the pressures associated with meeting work search requirements. And it is particularly worrying as since the report was commissioned, the use of sanctions has been rising. The Government has expanded the group of people who can be sanctioned, with the latest statistics suggesting that 6.5% of people subject to Universal Credit requirements experienced a drop in their payments through a sanction in November 2022, more than double the rate in 2020.

People can feel pressured to meet job centre requirements, rather than taking steps they need to stay well and move towards work

To have been eligible for UC in the first place, individuals would have been on a very low household income with little to no savings. If people in these circumstances are then ending their UC claim without an increase in their household income, they may face extreme financial hardship. The Department for Work and Pensions (DWP) report suggests people opting out of Universal Credit may have ‘a high estimation of the costs of meeting conditionality requirements’, but a growing evidence base indicates that those costs are very real for many people getting UC.

Requirements can include attending appointments at a Jobcentre, applying for jobs or taking part in activities like CV or interview workshops. There are a wide range of reasons that some claimants may struggle to meet these requirements, from caring responsibilities or health challenges, to other difficulties in their day to day lives.

Spending time meeting requirements can prevent people taking steps that might otherwise help them to get ready for work, such as sorting out problems with housing or childcare, or getting care and support to manage their physical or mental health. Work Foundation research in 2022 found that the need to spend the equivalent of a full working week looking for a job means that unemployed people who want to build new skills are prevented from accessing training. The Welfare Conditionality project found that a concern about sanctions meant people on UC “prioritised compliance with meaningless activities that were ineffective for finding work”. The study found that the possibility of experiencing a sanction can have a significant negative effect on the mental wellbeing of people getting Universal Credit, even if no sanction is imposed.

This has led to a situation where some UC claimants feel under pressure to apply for any job, regardless of whether it aligns with their experience, skills, preferences, health or caring responsibilities. This can lead to employers receiving large volumes of applications from candidates with no intention of working for them, and to individuals cycling between stints of low paid and insecure work and periods of unemployment, rather than moving in to sustained employment.

This is particularly concerning given that decision-making on setting requirements and applying sanctions is inconsistent. Citizens Advice have reported an increase in the numbers of people they support who have been placed in the wrong conditionality group, or have been set a claimant commitment with inappropriate requirements. New analysis from IPPR finds substantial variation in decision-making on sanctions across the UK even when controlling for demographic factors, which would appear to be driven by differing practice between Jobcentres.

Ongoing monitoring of sanctions decisions is essential

There are, however, some limitations of the analysis in the DWP report which mean ongoing monitoring and evaluation of the impact of sanctions will be crucial. For example, it suggests that people who have faced a sanction move less quickly in to paid work, and earn less on average than those who aren’t sanctioned. It is harder to draw conclusions from these results in that, as this piece from the IFS explains, we would always expect that people who have been sanctioned for not applying for jobs to be less likely to enter work than those who have.

Likewise, this report reflects a period before the pandemic, the recent sharp increase in inflation, and successive changes in Government policy that have expanded groups of people subject to requirements. It was delivered at a time when the sanction rate was much lower, and had been falling, which is now out of step with the recent sharp increase in sanctions decisions.

But with the sanction rate increasing it is crucial we learn more about the relationships between requirements, sanctions and employment to understand if welfare reforms are delivering on their policy aims.

Instead of looking at sanctions in isolation, DWP should consider:

· Are requirements for work search and attending job centres effective in helping people on UC to get enter and stay in work for sustained periods of time?

· How can DWP guard against the risks of inconsistent decision-making in setting requirements and imposing sanctions?

· How might Government maintain a degree of commitment and responsibility within the social security system while protecting people on low incomes from experiencing mental distress or financial destitution?

Government has recently announced plans to develop voluntary offers of employment support for people who don’t have requirements to prepare or look for work in their claimant commitment. This presents a welcome opportunity to learn more about the potential role for employment support without welfare conditionality, and could shed new light on some of the questions listed above.


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