Janis Bright considers the latest developments at the inquiry into benefit sanctions
Against the talk of public inquiries taking years to complete their circuit, the Commons select committee system is a proper Usain Bolt. The Work and Pensions Committee’s current inquiry into benefit sanctions, which began taking evidence only in December, is sprinting along with the general election coming up fast on the inside.
Not that they are they skimping on the detail to get there. The MPs have taken evidence from a long list of campaigners, academics, service providers, individuals and now government. Those in the hot seat, giving evidence in person, have included our own project leader Professor Peter Dwyer.
What do we know so far? Many of those giving evidence in the televised sessions have pointed to the system confusions and hardships for service users since benefit rules were tightened two years ago. Our own submission, based on a review of international evidence, calls for exploration of alternative models that might ease the effects of sanctions, and/or give incentives and support to help claimants into training and work.
The evidence reviewed by our project to date suggests that severe sanctions substantially raise exits from benefits, and may also increase short-term job entry; but the longer-term outcomes for earnings, job quality and keeping employment appear unfavourable. In fact, an as-yet unanswered question is where those leaving the benefits system end up.
Our research – in progress – should shed some light on that. In the meantime, a team from Oxford University, led by Professor David Stuckler who also gave evidence, has some statistical answers. Their study spans the period 2005 to 2014 and measured the ratio of benefit exits and sanctions imposed. They found that after the benefit reforms and tightening of sanctions, many more people exited from unemployment benefits. Yet only one in five of those exiting in association with an adverse sanction said they had found work.
Another aspect of the sanctions and support regime was explored in a session on 7 January. Professor Dwyer pointed to the Universal Credit regulations that could potentially see people in low paid work subjected to conditionality and sanctions for the first time. The government’s stated intention is to ‘make work pay’ with generous disregards and tapers in the UC system. But here’s the sting. Those in low paid work and receiving UC will have to ensure that their weekly gross earnings exceed a ‘conditionality threshold’. This is to be set at the equivalent of 35 hours’ work a week, paid at national minimum wage rates (about £11,500 a year currently). In-work claimants who earn below that amount may be expected to agree to reach the threshold by a combination of working more hours, increasing their pay rate, finding a second job, or getting a new job with better wages. Otherwise they could potentially be subject to tough work-related sanctions. Read the academic paper here.
On this front there was news later from the DWP’s director of labour market and international affairs Chris Hayes. He told the committee the department is to launch a major test of whether this type of conditionality (which includes support to progress in work) has a place, by means of a random controlled pilot. That sounds as if some people in work could indeed receive sanctions and support before long.
Does the government have another purpose in its sanctions and support regime? Setting out Conservative plans for the next parliament Prime Minister David Cameron bracketed cutting public spending with promoting ‘work pays’ attitudes when he announced further capping of total weekly benefits. Although the money saved is relatively small, he told his Radio 4 interviewer that capping families with several children was fair to other citizens. So the triple objective of incentives, budget savings and fairness remains in place. Read more on this from Channel 4.
Finally last week DWP employment minister Esther McVey took her seat before the MPs. She insisted that sanctions are not a punishment but a ‘deterrent’ to non-compliance with the regime. She strongly disputed the Oxford University figures, saying the DWP’s own survey (from 2012) showed that about 70 per cent of people leaving Jobseeker’s Allowance had found work.
The question of whether or not people leaving benefits end up in work should be addressed under Universal Credit by matching with income tax data. So, as with so much among the flurry of statistical data presented to the inquiry, it’s a case of watch and wait. The inquiry report will certainly generate debate.