On Monday 12 December, Bridget Phillipson, Member of Parliament for Houghton and Sunderland South, led the questioning of senior civil servants at the Department for Work and Pensions (DWP) during an inquiry by the Public Accounts Committee (PAC) into benefit sanctions.
A benefit sanction is a penalty, such as the temporary suspension of benefit payments, that is imposed when claimants of benefits such as Jobseeker’s Allowance or Universal Credit fail to undertake work-related activities aimed at helping them move into work. As the PAC is not a policy committee, the focus of the inquiry was not to question whether benefit sanctions were right or wrong, but to determine whether they work, are good for the economy and efficient for the taxpayer.
The inquiry was launched following the publication of a report in November this year by the National Audit Office (NAO) that examined whether the DWP is achieving value for money from its administration of benefit sanctions by considering how benefit sanctions fit with the intended aims and outcomes of DWP’s wider working age employment policy, whether sanctions are being implemented in line with policy, and whether the use of sanctions is leading to the intended outcomes for claimants.
The NAO report found that the DWP is not doing enough to find out how sanctions affect people on benefits, or how effective they are at getting people back into work. The report also found that the use of sanctions varies substantially by region, and the DWP could be doing more to reduce its error rate. It recommended the Department to carry out a wide-ranging review of its sanctions regime ahead of further changes to labour market support such as Universal Credit.
During the inquiry, Bridget questioned Sir Robert Devereux, Permanent Secretary at DWP, the senior civil servant responsible for the implementation of government policy on this issue.
She began by pressing Sir Robert to outline the work that the DWP was doing to understand the effect of benefit sanctions in getting people back into work, before suggesting that the Department should track people through the system in order to make a better judgement about the long-term impact of sanctions on their earnings and job security. International studies show people who receive sanctions are more likely to get work, but the effect can be short-lived, lead to lower wages, and increase the number of people moving off benefits into inactivity.
In response, Sir Robert promised that the Department intended to track with earnings in the near future, but said that the data to do so was not yet available. He defended his Department’s lack of focus on this issue as the result of prioritising the restructuring of the welfare system in recent years, and denied that his Department had anything to learn from international comparators.
Bridget then asked Sir Robert if understanding the impact of sanctions on claimants was not being treated as a priority by the DWP because it only affected a relatively small number of people. Sir Robert refuted this, but confessed that it would be useful for his Department to have better information on this matter than what was currently available.
Bridget also highlighted that little was known about the costs and benefits of the sanctions regime run by the DWP and asked Sir Robert whether his Department would seek to clarify the data on this soon. Sir Robert agreed that some elements will become clearer with the use of new data sets, but when Bridget challenged him to do more to understand the costs associated with the use of sanctions to the DWP and other areas of government, he said it would be very difficult for his Department to discover the full costs of the sanctions regime across government.
Commenting at the end of the session on 12 December, Bridget said:
“It’s clear from today’s inquiry that Department for Work and Pensions needs to do more to measure the effectiveness of benefit sanctions in getting claimants back into work and to understand better the devastating impact that they can have on people.
“At the moment, the DWP has no way of knowing whether the sanctions regime that it is running is effective, economical or efficient, both as a means to help people find employment and to ensure that taxpayer money on social security programmes such as JSA and Universal Credit is well spent.
“I was particularly concerned during today’s session that the witnesses did not appear prepared to learn from the international studies that show sanctions can have a long-term detrimental effect on wages and economic activity, even if they do initially make those who are sanctioned more likely to find work.
“There is simply not enough information on this to justify the DWP’s confidence in the performance of benefit sanctions as an effective means to help people find a job. It also doesn’t appear that the Department is taking seriously the severe and often catastrophic impacts they can have on peoples’ lives.
“If the government is really serious about developing a social security system that supports those in need whilst making sure that people who can work are supported back into employment, it must do more to understand the current system and what can be done to make it work more effectively for everyone.
To watch the inquiry in full, click here.
To read a transcript, click here.