Oral evidence: Benefit sanctions policy beyond the Oakley Review, HC 814Wednesday 21 January 2015

Oral evidence, 21 January 2015.

Witnesses

Ben Robinson, Head of Policy, Community Links, Steve Hughes, Head of Economic and Social Policy, Policy Exchange, Mark Serwotka, General Secretary, and Helen Flanagan, Vice-President DWP, Public and Commercial Services Union (PCS), and Professor David Stuckler, University of Oxford, gave evidence.

Chair

I think we will get started. We were doing very well on the time and then I blew it by asking an extra question at the end. Can I thank you very much for coming along this morning to help us in taking evidence on our sanctions work? Starting with you, Ben, can you perhaps introduce yourselves for the record, please.

Ben Robinson

Ben Robinson, Head of Policy at Community Links.

Mark Serwotka

Mark Serwotka, General Secretary at PCS.

Helen Flanagan

Helen Flanagan, a PCS NEC member and Vice‑President of the DWP group.

Professor Stuckler

David Stuckler, Oxford University.

Steve Hughes

Steve Hughes, Head of Economic and Social Policy at Policy Exchange.

Chair

Thank you very much and you are all very welcome. The first set of questions is from Sheila Gilmore.

Sheila Gilmore

Good morning. I wanted to ask Steve in particular about a statement in the 2014 report that suggested that, at times, the regime was too lenient on people who had repeatedly failed to keep to their regime, but sometimes too stringent on those who had made a single mistake. Could you perhaps explain a bit more about that?

Steve Hughes

Firstly taking the too stringent point, which was in relation to the evidence that you have heard and seen a lot of, those people receiving a sanction could be going through a system whereby it gets overturned. There is quite a high proportion of people getting their sanction overturned. Engagement in understanding the sanctions is very important for jobseekers and those people on Jobseeker’s Allowance. We suggested that, instead of having a financial sanction for a lower-tier first offence, we could test and pilot non‑financial sanctions. We obviously have a lot of evidence that people go to food banks because of sanctions. Hopefully, that financial impact would no longer occur, because instead the benefit would be paid in a different format to recognise that an offence had occurred, but it would still be paid. The second element of that was another part of the non‑financial conditionality, which would be engaging with the Jobcentre a bit more. We recommended daily sign‑on for a period of eight weeks, which would attempt to overcome the problems of people not engaging and just dropping out the system, being able to access a Jobcentre adviser, where they would be able to be told about hardship loans, for example, and the appeals process. That is the first part of it, and on the second part of it—making things more stringent—the argument essentially was that there is a very small proportion of people in the overall piece who are repeatedly flouting the sanctions system. We recognise within the reports that we do not know much about these people. Now, if it is repeated flouting for not good enough reasons, that might indicate that sanctions should increase proportionally for every sanction. If it was not for that and we found out that it was something different, or there were some other problems with that particular claimant, that might not be suitable. Ultimately, the idea was a more proportional system, starting with non‑financial sanctions, with increasing financial sanctions as offences increased.

Sheila Gilmore

Is there a risk that people who have long periods of sanction, who are obviously the smaller number—we know that—simply drop out of the system somewhere and therefore are not in contact with the Jobcentre?

Steve Hughes

That is certainly a risk, and it is one of the many areas of sanctions and conditionality policy that we simply do not know that much about. That is why we said, “Do not implement this system all in one go.” It is an idea to test and pilot, as we should do with all aspects of welfare policy, which is a test‑and‑learn approach.

Sheila Gilmore

If someone is sanctioned, say for three months, what is the incentive for them to seek help or go on trying? Did you look into that at all—whether people during that period disengage rather than re-engage?

Steve Hughes

My reading of the evidence is that some people can disengage and other people can engage and will come back into the system as well. Again, as I say, the evidence is pretty sketchy and we do not know much about it. One of the things the DWP should be looking into is what is happening to those people on longer periods of sanction, to see where they are going and what they are doing, because until we know that we cannot improve the system.

Sheila Gilmore

The stated aim of this, and I think your organisation would hold to this, is to encourage people to get employment, and that sanctions will be part of that role. Do you think we have sufficient knowledge as to whether that works?

Steve Hughes

No, in short. As I have said before, the evidence is patchy, and it is from all over the world with welfare systems that interact with each other in very different ways, depending on where you look at them. There is a strong case for a system of conditionality backed up by sanctions, but it is more about the fairness of the application of those sanctions, rather than necessarily whether they exist in the first place.

Sheila Gilmore

Do you think we should be having some sort of proper independent review of the system at this stage?

Steve Hughes

Yes, I do but, again, going back to my previous answer, I would be reluctant to look at the sanction system by blowing it up entirely, and would rather have Oakley‑style reviews of certain elements of the system where we know there is a problem. We know there is a problem with the number of cancellations of referral decisions, because we can see that simply by looking at a graph. We know there is a problem from looking at the number of successful appeals that go through, because it is quite a high proportion of those decisions that are made. There is a problem with the interaction of providers and Jobcentre Plus as well, and I would advocate independent reviews on those three aspects. If you look back at the impact assessment that came alongside the Welfare Reform Act, there are a lot of references in that to the fact that we simply do not know what the behavioural change will be from some of these changes. Therefore, that necessitates us looking into these kinds of things further down the line, after the policy has been implemented.

Sheila Gilmore

Surely part of the problem is that we implement the policy with a statement that it will work and then, in effect, we are experimenting on people a bit. Are we?

Steve Hughes

I am not entirely sure whether that is the case. If you look at the broad evidence, you can say that there is a system and there is a framework for a system within that system. We have problems further on down the line, and therefore we need to test what is wrong with those problems. The problem is that we have problems, but we do not really know what is causing them.

Sheila Gilmore

Those three areas that you have outlined are ones that you think are worth digging into, and that the Department should be doing it.

Steve Hughes

Absolutely, and there is probably pretty broad consensus on those three areas. Whether those three areas are the focus of a review is a different question, but I think there would be consensus that there are problems in those three areas, definitely.

Paul Maynard

Helen, you talk a bit about the Claimant Commitment, which has been presented by the Government as a step forward in the jobseeker and claimant understanding the nature of their conditionality. How do you think the Claimant Commitment has worked in practice, in capturing people’s different capacity for work and the different challenges that they may face in overcoming hurdles to get to work? How is it functioning as it has been rolled out, in your view?

Helen Flanagan

The Claimant Commitment itself is a lot more complicated than the jobseeker’s agreement. It is supposed to be much more tailored to the individual but, in reality, we find that it has many more steps that the claimant has to take each week. It was referred to before; people mentioned that you might have to apply for three jobs a week, whereas under the Claimant Commitment it lays out individual steps, for example looking on a website three times a week. That would become three steps. You could have a Claimant Commitment where there are over 40 steps that that individual has to do each week, and they may well be actively looking for work. For instance, if they look at the Reed website, which is an employer website, rather than Indeed, which is on their Claimant Commitment, they can be referred to the decision maker on that issue. We find in practice, although some advisers and claimants say that they welcome it, in other centres it is much more complicated for the individual to fully understand what they are required to do in order to meet the conditions.

Paul Maynard

Therefore, are you suggesting that a variability in individual Claimant Commitments is about the actions that they need to take, rather than their individual circumstances? That is not making them more complex.

Helen Flanagan

It is both. We find that some claimants do not fully understand, and that is down to their individual circumstances. Despite the fact that it is meant to be tailored, we still have anecdotal examples where our members have been told that they are not meeting the district standard for Claimant Commitments. If there is a standard, that gives the impression that it is a template. Therefore, they are not tailored. There are a number of steps they are being told have to be there for each person, so it is not tailored to the individual.

Paul Maynard

If someone arrives with a diagnosed mental health condition at the Jobcentre Plus, what steps are taken to ensure that the Claimant Commitment is tailored to their specific needs and, perhaps more importantly, that the individual claimant understands the ramifications of what they are signing? Do you have examples of where people will not sign because they are concerned that they will not be able to fulfil the commitment?

Helen Flanagan

Generally people do sign a Claimant Commitment, but they may not realise the full implications of what they are signing. In terms of people with mental health problems or other underlying conditions, there are relaxations and flexibilities that can be put into that Claimant Commitment, about looking for work or hours available, for example. The staff either do not know or are simply not encouraged to put those flexibilities in there for each claimant. There are specialist disability employment advisers, but they are very small in number and normally with quite large caseloads. By the time they are referred, if they are indeed referred to a disability employment adviser, those flexibilities will not have been put in there.

Paul Maynard

If you are suggesting that the system in some way militates against making the Claimant Commitment as flexible as it needs to be, is that a factor of the time available for individual advisers—that they simply do not have the time to do it—or is it more structural than that?

Helen Flanagan

I would say it is more structural because, as I said, it is more of a focus on what should be a standard Claimant Commitment. They are not encouraged to tailor according to individual needs, especially those with health needs or those who need to have some kind of part‑time working for childcare needs as well.

Paul Maynard

Do you think that perhaps quite a significant policy change has occurred without people noticing it, in that we now assume that to be a jobseeker is analogous to having a full‑time job, i.e. you are spending 35 hours a week searching for a job? Therefore, a jobseeker is now a job, if you like. If that has occurred, would you agree that it might therefore be sensible that, just as in any other job the employee can try to ensure that the job is flexible enough to meet their own personal needs, the same should apply to a jobseeker if they are doing something analogous to a full‑time job? Does that make sense?

Helen Flanagan

Not particularly.

Paul Maynard

It makes sense to me. I know what I mean. I apologise.

Chair

In other words, if you have a full‑time job and you have some health problems, there might be flexibilities in the job. I suppose he is asking if that same kind of flexibility should be reflected in the Claimant Commitment. Is that right?

Paul Maynard

That is exactly what I mean, yes.

Helen Flanagan

Yes, that should be there in terms of what you do in order to look for work, as well as what you would be expected to work for. I do not think it is a hidden policy change of looking for a job being seen as a full‑time job. That is the mantra that is repeated, and I am pretty sure the 35‑hour-a-week job search was in the Universal Credit legislation. Even though that has not transferred over to Jobseeker’s Allowance as yet, our experience is that staff are being told you have to include that anyway. There is no encouragement, as I said before, to tailor it to individual needs, especially for those with health problems.

Paul Maynard

I know, Mr Robinson, that Community Links have said that they have been hoping that the Claimant Commitment will see the claimant steering their journey towards work. Do you think that the Claimant Commitment is delivering on that aspiration, in your view?

Ben Robinson

These are still early days but, from our experience, that tailoring is still pretty patchy. We would say two things. We welcomed it because it should have given an opportunity for claimants to shape, not decide, what steps they would be taking, and have a greater input into where they wanted to go and what they could be expected to do. The other thing is, it should be a live document. It should regularly be updated and changed as claimant circumstances change. There is patchy evidence on both of those. We would urge much greater opportunities and guidance for advisers to allow people to shape it and to feed in to that process. At the moment, we are seeing, as Helen described, a greater burden being placed on people as a result of it.

Paul Maynard

Back to you, Helen: in the case of Jobseeker Directions in particular, obviously pre‑Claimant Commitment they had a clear and distinct role. If the Claimant Commitment is meant to be specific to the individual, what role do you see for Jobseeker Directions parallel to the Claimant Commitment? Should they exist now, or should they all be incorporated in the Claimant Commitment?

Helen Flanagan

They still exist. In fact, they are used more now than they were before as part of the SR13 conditionality measures.

Chair

Sorry, SR13?

Helen Flanagan

The Spending Review that came in, in April 2014, with the help-to-work measures as well. It introduced day‑one conditionality, where more Directions were issued. They could be parallel to the Claimant Commitment, for example the creation of a CV or attending a workshop in the Jobcentre, but they are used more ad hoc. There could be an argument that they are no longer needed, but they are used as a kind of immediate threat of sanctions: “If you don’t do this by this date, you will be referred to a decision maker.”

Paul Maynard

Do you think it is made sufficiently clear that, in addition to the obligations under the Claimant Commitment, Jobseeker Directions are as liable to incur a sanction if not followed as the contents of a Claimant Commitment? Do you think that is blurring the picture for the average claimant?

Helen Flanagan

In that first interview when you are hit with your Claimant Commitment and the Direction, or maybe one or two Directions, that is a lot to take in for an individual to understand the consequences if you slip up in these areas. If you slip up twice, you could face a four‑week or several‑month sanction. It is emphasised a lot. Conditionality is the main focus of all interviews, I would say, certainly the initial ones, but I do not think people have a fair opportunity to take that in.

Chair

Helen, you said that most people sign their Claimant Commitment. Is that because they have a fear that, if they do not sign it, even though they might think it is inappropriate, they will be sanctioned? Fear of sanctions is making them sign up for something that is inappropriate, and then the next stage is something that they cannot fulfil; therefore, they are going to be sanctioned anyway. They are being set up to fail almost.

Helen Flanagan

Yes, basically. If they do not sign that Claimant Commitment, that instance gets referred to a decision maker. If you have lost your job and you are desperate for money, you do not want to put that off any further, especially as you now have increased waiting days for the benefit. You do not want to wait for that any longer than necessary, so you are probably under quite a lot of pressure financially to think, “I’d best just sign it so that I can get my payments.”

Chair

The sanction is almost built in. It is just being delayed.

Ben Robinson

Can I add very quickly a case study that was in our submission? We worked with one gentleman who, in his first interview, asked for a sentence to be added to the Claimant Commitment that said, “I’ll attend all the training courses and interviews arranged for me, but only if such courses and activities will give me an advantage in finding work,” and the Jobcentre refused that additional sentence and consequently sanctioned him for not signing the Claimant Commitment.

Sheila Gilmore

It is this 35‑hour issue. Ever since we have been discussing this, I have wondered how that could be evidenced. My fear was that then itself becomes quite box‑ticking. How do you assess whether somebody has spent the requisite time, unless you are just making a judgment about being able to do so many things in that time? How do you judge whether somebody has spent 35 hours a week job seeking?

Ben Robinson

This goes back to the kind of point that Paul was asking about before. We believe that it should be an investment in the relationship between the adviser and the claimant. If they work together and they spend that time to really understand their situation and the kinds of activities they can be expected to do, they will be in a better position to be able to judge whether somebody is complying with them or not. At the moment, it is a much more transactional relationship, not because that is what Jobcentre staff necessarily want to do; it is the position they are put in. It is only through investing in the resources to give advisers time to work with people and understand their situation that they will be able to make better judgments about whether they are complying or not.

Helen Flanagan

Can I just make the point that it is not necessarily the same adviser who would refer them to a decision maker, if they had not met the Claimant Commitment conditionality as well? There is this assumption being made that they go back and see the same person each time. That is the aim, but on occasions they will go back in and there might be somebody in the Jobcentre who is on call at the DMA diary, so they would see all the people who had been referred to them that day by the band Bs, the people who do the signing. That relationship is not there. If they fail to attend, if they miss their appointment, it is a band B decision maker who makes that decision as well. There is not that relationship to understand what the person has done to look for work.

Anne Marie Morris

Graham and I are going to look at JCP sanctioning targets, so the questions are for Mark and Helen. If I can start perhaps with you, Mark, when Neil Couling did his report in 2013 for the Secretary of State, he noted that, when the sanction benchmarks were removed in 2011, it “suggested that conditionality was no longer being enforced appropriately by some individuals”. Clearly everybody has a different view about whether or not sanctions are right or wrong but, if you are employed in the system and that is the law, do you agree that your members, whatever their personal view is, and indeed whatever the unions’ views are, are obliged by law to enforce the law?

Mark Serwotka

Bear in mind that we are representing 67,000 people working for Jobcentre Plus. Our view is that staff are employed as civil servants and they are obliged to carry out the duties that the law stipulates. The issue for us here is not whether people are applying the law; it is whether the system that has now developed overly emphasises the pressure on staff to make sanctions referrals and adverse decisions, rather than emphasises most that their main key function should be to build up a relationship of trust and support, and help people back into work. We have supplied and can supply evidence from staff surveys, and indeed extracts from people’s performance improvement plans and their appraisal interviews, where the emphasis on making sanctions referrals and making 80% adverse decisions is astonishing. There is, for example, an effect on staff if they are not seen to be sanctioning enough. In fact, they cannot get part of their pay rise, but there is no facility for people to be told off if they are making too many sanction referrals. In other words, our members tell us that the big problem is that they came to this job to help people back into work, and now they feel that their job is to trip people up and to find reasons why you can sanction their benefit. That means that the relationship of trust that is so important is breaking down. Assaults on staff have increased dramatically in the two years since the regime was tightened up. What we now see is often that civil servants, many of whom are fantastically low paid and 40% of whom would be entitled to Universal Credit, are now the target, because people think they are there to blame. The pressure put on individual members of staff is therefore distorting the job that people should be doing. I would finally say that we think the reason for that is that there seems to be an obsession with designing a system for the tiny proportion who may be seeking to flout the rules, rather than a system that should be entirely geared to respect claimants and believe that they do want to get back into work. We should be helping them do it. That is where the service has changed so markedly, and all the evidence we have from our members is that that is why Jobcentre Plus is a worse place to work than it was previously. I should finally add that it is not the union, therefore, that does not agree with the sanctions policy because we have decided that. Our position on believing sanctions do not help but hinder is arrived at from the members themselves, who are delivering the service, and them saying to us that this is now essentially corrupting what they think they should be doing.

Anne Marie Morris

I hear what you say with regard to the views, but that flies in the face of your first answer, where you said that clearly employees need to apply the law as it is, and they do not have free rein to take on board their own views. The implications of Neil Couling’s comments were that individuals—clearly not all would necessarily be members of your union—were taking a view and looking at what they thought was right and fair, rather than what the current situation is. It seems to me, if you have a view about what is not working, you take that to your boss, the politicians, the unions. It is not something that you can unilaterally take on board in your decision making. Do you think that the drop in conditionality being applied appropriately is because individuals were making a judgment, rather than just following the rules? I hear your comments about the rules, but this is simply about the action of the members.

Helen Flanagan

In terms of Neil Couling’s report, in May 2013, it was very limited. It was meant to look at some press reports that had been leaked, showing that there were targets in some areas of the country around sanctions. His investigation basically looked at those press reports, a brief discussion that he had had with us and information that we had supplied, and some discussions with senior managers. I do not consider that, and I do not think anybody else would consider that, a full investigation into the situation. I am not sure how he came to the conclusion that people were choosing not to apply conditionality, given that the sanction referrals had increased so much since the change in the regime. His investigation and the outcome were flawed.

Anne Marie Morris

Fundamentally, what you are saying is that he did not have enough information, he was not looking in the right place and what he said was not true. Can I just ask you a supplementary? Clearly, you do not agree with what Mr Couling said. Let us, for the sake of argument, say that maybe he had a point and there were some people who inappropriately used their own judgment. Let’s say, for the sake of argument, that a manager recognised that was happening. Would you agree that it is right that a manager then takes disciplinary action? I am assuming of course that we have an example where a manager looks at an individual, looks at the case and says, “I think you’ve applied your own judgment, rather than applied the system. Therefore, there will be disciplinary action.” Do you think that is right? Should you be entitled to do that?

Mark Serwotka

Clearly a manager has to manage. If they believe that somebody is not applying something in the way it should be, it is right to take that up and discuss it with people. Our evidence is that the opposite problem is the one that we should worry about, which is the fact that the pressure, targets and all the move from the top are that more and more people should be sanctioned. If you are not doing enough you are penalised, but if anybody is doing too many nobody looks at it. All the internal documents and the performance appraisal targets that are set are focused on the 80% adverse decisions and say that more referrals should be made. This is why, from our point of view, we strongly support the call that was made for an independent inquiry, and we think it should be very far‑reaching. Certainly it should look at the effectiveness of sanctions; whether people who are sanctioned are going into work or not; what the equality impact is of sanctions on people with disabilities and mental health issues, and on single parents; and the link between sanctions and food bank referral; but also the key point you are taking up, which is the effect of sanctions on the staff, the pressure put upon them and the targets or expectations in the system. When we do that, something profound will emerge, and the question we think everybody should ask is, “What is our social security system for?” How do you deliver a safety net, and how do you treat people with respect, and help and support them, rather than our public servants—very low-paid people—now being seen as people who are out to trip you up? If you get called in, you often do not think you are being called in to be supported; you think you are being called in because somebody is trying to find you out to impose a sanction, which is extraordinary severe. There were 906,000 sanctions in 2013. There have been 1,700 sanctions that have been for three years. When a sanction is imposed, of course, even if you get hardship payments, you are not getting it for the first two weeks. The effect of a four‑week sanction is often that someone’s income is reduced by 70%, and we already have some of the lowest benefit levels of any European country. We think the system is fundamentally flawed, but we would welcome a full independent inquiry to scrutinise it properly and for us and others to give our evidence to. Helen’s point is that we do not feel that previous Select Committee reports or DWP management, whenever they are asked, have really looked into many of the issues we are raising today. It is therefore timely that that is done independently.

Kwasi Kwarteng

This is the first question I am asking in this session. We have heard over about an hour lots of complaints about the system and lots of individual stories suggesting that the system is not working. What I want to know from the panel is where the problem is. Is it the actual sanctions, the actual concept, the philosophy of it or the idea behind it? Is that the problem, or is it a question of the implementation and the operational side of things? I just want to get a sense, as individuals who know about this area and have experience in it, of what your thoughts are. Are you against sanctions in principle, or are you just worried about their application as we currently see today? I would like to go through each of the panel to get a sense of what your thoughts are.

Ben Robinson

We are not against the idea of conditions being placed in the system. The Oakley review had a lot of very good recommendations about how the process should be improved, and it dealt with a lot of those issues. We would urge the Government to implement them in full and the Select Committee to follow up later to review whether they are being implemented. What we need now, as Mark mentioned, is a look at whether the conditionality regime is working in what it intends to do. We need clarification of what its intention is, and we believe that should be about getting people into sustainable good-quality work. There is no evidence that it currently does so and, further, there has been no evidence that the stricter regime brought in in 2012 was necessary in itself and has had any positive effect, though we have heard quite a lot of evidence of the negative impact of it.

Kwasi Kwarteng

But you accept the principle that it is something that you do.

Ben Robinson

We are a Work Programme provider. We currently raise doubts ourselves. We see in a very small number of cases that it should be a tool for advisers to use but, as other people have said, it is a very small number of cases. The vast majority of people are very motivated to work, and at the moment it is pushing people further away from work. That is why, again, we would call for a full independent review looking at the effectiveness of it, not just in encouraging people to engage in job search activity, which the Select Committee called for last time, but in getting people into work. To do that, we would need DWP and HMRC to do that benefit and tax data‑matching exercise. We have lots of anecdotal evidence that people are coming off the system not because they are being encouraged into work but because they just cannot handle the system. It is only through that data‑matching exercise that we will ever know what the long‑term impact is on people.

Kwasi Kwarteng

Is that where most people on the panel broadly sit? Would you agree with Mr Robinson?

Mark Serwotka

As a union, based on the experience of our members, we do not think sanctions are the right approach. We think it is reasonable to have some expectations on what people should do in return for their benefit, but the problem with a sanctions approach, as we have already tried to say, is that it skews the system. Our view is that, if we accept that the overwhelming bulk of people want work, the role of Jobcentre Plus should be to help provide training and support to help people back into work. We think that that would bring about a far better situation than we currently have. However, if there was an independent inquiry and that was not what most people thought, we do also think that, if you are going to have them, you must ask yourself what they are for, how are they being done and whether they are helping the situation or making it worse. At the moment, we think the evidence is that they drive people into absolute poverty and do not help them find jobs, and we are not benefiting from that. We are making things worse.

Kwasi Kwarteng

The reason why I asked the question is that there is a big philosophical question about whether you think sanctions are a good thing broadly or not. You have been very up-front and said that you do not think that is the way we should be going or path we should be treading. Clearly, there is a fundamental difference from some of the approaches that the Government wants to push forward.

Mark Serwotka

There is a fundamental difference, but the point that we would make most strongly is that that fundamental difference probably arises because, we think, too much of the political approach has been about shirkers, scroungers and saying that people are work-shy. Our start point, from our experience, is that that is not where the overwhelming bulk of people are. Therefore, the system is designed to deal with this problem that everybody is worried about, rather than for the overwhelming majority, doing them a disservice—and the hardworking staff.

Kwasi Kwarteng

You have a clear position. People could disagree with you, but I commend you on the clarity of your position.

Helen Flanagan

To add to that, the system is based on an assumption that people are somehow trying to fiddle benefits and get away with claiming Jobseeker’s Allowance. It is this idea that people have the life of Riley on benefits. It breaks down, because it both demonises the unemployed and pits the advisers against the claimants, which does not help them get into work.

Kwasi Kwarteng

Do you share Mark’s view that you do not think that sanctions are the right way to go at all?

Helen Flanagan

Yes, we are from the same union.

Kwasi Kwarteng

I just want to get it all down on the public record.

Professor Stuckler

Let me jump in on this. I have not spoken so far. Sanctions are not a one‑size‑fits‑all policy. If you look across Europe, there is a great deal of difference in the extent of the conditionality and how harsh the penalties are. Taking where the UK system now sits, it has one of the toughest conditionality regimes and some of the harshest penalties for sanctions. Ultimately, this is a question of data, the stories behind those data and what works to get people back into jobs, reduce harm and save taxpayer money.

Kwasi Kwarteng

What about the principle of conditionality? Is that a useful thing? We have heard other panellists say that they do not think that makes sense in terms of trying to get good outcomes.

Professor Stuckler

Again, this is a question of data.

Kwasi Kwarteng

It is a conceptual one, I’m afraid. It is a conceptual one. The idea of punishment or sanctions is a concept.

Professor Stuckler

I am not opposed to the concept, but I am pragmatic about this working, so it is about data and what we have learned from looking at the UK.

Kwasi Kwarteng

Sure, but I am interested, as you have said you are not opposed to the concept, and that is what I wanted to learn.

Steve Hughes

I am not opposed to the concept either.

Chair

I am going to come back to the philosophical thing and go back to Anne Marie, because the key to this is whether they work.

Kwasi Kwarteng

We have had clear evidence that not many people think they do work.

Anne Marie Morris

Mark and Helen, you have both effectively said that, with regard to Neil Couling’s report, he got it wrong. Did you ever do your own investigation internally to find out, among your members, whether individuals had effectively been disciplined, because that is the only way you would have identified them, for taking a personal view rather than applying the rules strictly?

Mark Serwotka

Perhaps Helen will say more in a moment. We did a survey of our members who were advisers and decision makers. What came back was quite startling. The headlines were that 70% of the people answering the survey said that they did not think that sanctioning positively impacted on claimants finding work. We were told that 61% felt that there was pressure on them as individuals to refer claimants for sanctions, and that over 20% felt that that pressure was for inappropriate referral for sanctions. As a result of that, what came out was that there was an 80% referral target or adverse decision target from referrals, so the whole emphasis of what our members were saying to us was that this was where all the pressure was and they did not think that it was working. The knock‑on of that was that they felt, therefore, it introduced fundamental barriers in the relationship between them and the public, which was the most morale‑sapping part of what information was coming back.

Anne Marie Morris

There was clearly a lot of feeling that the system was not working, but to what extent did that impact on people’s judgment and therefore how they did their job? I suppose the question I was asking was less about the research about what they thought and more about whether anybody was disciplined because they were not applying the rules.

Helen Flanagan

The survey also found that 61.8% felt they had experienced pressure to refer claimants where they felt it was inappropriate to do so. Just to pick up on a point you made about whether advisers could be picked up and disciplined for using their judgment, advisers should be using their judgment. That is what part of that relationship is about. That is why they are graded at that level, because it is about discretion.

Anne Marie Morris

That is within a framework.

Helen Flanagan

Within a framework, and within this framework 60% felt they had been pressured to refer inappropriately. They then go on to have examples of where there had been “expectations”, which is another term for a target. 10% thought they had been given the lower appraisal marking—they do not go through disciplinary procedures; they are capability or performance procedures. As a result of that lower performance marking, they do not get part of their pay rise that year. Anecdotally, as a union rep, I have also represented quite a few members in my own Jobcentre who have been given that lower marking, and the reason either indirectly or sometimes directly given to that member is that they have not made enough referrals throughout the year. You might think that maybe they had not, but they had made some referrals. How can it be enough unless there is a figure set? They did not look at how many people had got into work and what they were doing as an adviser; they were looking at just the number of referrals.

Mark Serwotka

Could I just read you one small extract of what one of our decision-maker members has said? For obvious reasons, we would not want to say who that was or what office it was, because there is a climate of fear for any Jobcentre Plus employee. It says, “At our benefit centre, we are very closely monitored around sanction rates. Each week, everyone is given a printout of the percentage of sanctions decisions that are being made. This is clearly a bullying tool in order to bring people into line with senior management’s requirement for 80% of referrals to be a sanction. In one-to-one meetings, the managers then strongly focus on why we must achieve the 80% sanction rate. We are being forced to make adverse decisions and conduct perverse behaviours in order to achieve unachievable targets, all to get to the 80% rate of sanctioning.” That was not from a union rep; that was from a frontline decision maker, which we think, at least in that one case anecdotally, supports the general view we are trying to get across that the pressure is all in one direction. That is what people are so uncomfortable with.

Graham Evans

Helen, I hear you have spent a lot of time in Jobcentre Plus, and I personally have two Jobcentre Pluses in my constituency and pay tribute to your members and the staff, because the ones that I see and speak to work very hard and are dedicated to helping jobseekers get work. Indeed, something is working, because unemployment is down and more people are in jobs than there have ever been before. In my constituency, there is falling long‑term unemployment. On the targets that you were talking about, Mark, I see targets in Jobcentre Plus that are entirely positive, because the number of long‑term unemployed is coming down and the number of youth unemployed is coming down, so I see positive targets in Jobcentre Plus. Regarding the appraisals, do you have any evidence of inappropriate targets being set in recent times? My feeling of Jobcentre Plus is that—it might just be my constituency—I have outstanding Jobcentre Pluses in my constituency. They work very hard. I am particularly impressed with your members. They do not seem to share your rather sanguine view on life. They work very hard and they find their job enjoyable, helping people find work.

Helen Flanagan

We have given you some examples there.

Graham Evans

Yes, they are negative examples, but there is a lot of good practice out there, and we have not heard that in your evidence.

Helen Flanagan

I am not by any means putting down the work of our members in Jobcentres. We also think that they work extremely hard in difficult times to get people into work.

Graham Evans

They are effective and do a good job.

Helen Flanagan

We are saying that this does not help and is creating a negative situation. You cannot say that sanctioning has somehow created a boost in the labour market and helped those people into work. We are saying that our people do work hard, but this does not help. These are negative targets. You also have positive targets of trying to help people into work, but this 80% target on adverse decision rates is in the benefit centres, not in the Jobcentres. That means they are told that they must sanction 80% of the referrals that come on through. In the Jobcentres, they are being told, “You must refer more people for sanctioning.” How is that positive?

Graham Evans

My question was, I have seen no evidence of any targets for sanctions—if you have seen targets, then tell us.

Helen Flanagan

I am trying to tell you.

Graham Evans

Tell us where, what you are doing about it and what can be done about it.

Helen Flanagan

What we are doing or what you are doing about it?

Graham Evans

What you are doing about it.

Helen Flanagan

As a union, we have armed our members and our representatives with information and with tools to go out and challenge managers. Where this comes up, we have a good record of our representatives going to managers and saying, “This is inappropriate behaviour,” and managing to get that squashed to some extent. We are not here to police the Department to that extent either.

Chair

The 80% that you have quoted, Mark, is not a figure we recognise from anything we have. Can you provide us with the evidence?

Mark Serwotka

We can supply all of the stuff I have. We would just want to anonymise it. They are extracts from people’s appraisal discussions.

Graham Evans

One of the recommendations of our investigation into Jobcentre Plus was that, where there are examples of outstanding performance in Jobcentre Plus centres, they should be named and that should be used as an example of best practice, which could be duplicated throughout the centres.

Chair

Graham likes best practice, and he asks that of everybody.

Helen Flanagan

One of the problems is, where we raise it with senior management when there is evidence of this behaviour, and they do not stop and it is raised at a lower level, it is just marked down as rogue managers without any recognition that this is built into the system. This 80% target was on a letter from Jason Feeney and Neil Couling, who were head of the benefits and work services directorates at that point. That tells you that that is endemic within the system and is endorsed by those senior managers.

Graham Evans

We will see this evidence.

Chair

It would be useful to see that. We are going to move on, because we are now on other targets, but off‑flow targets. Debbie has the questions here.

Debbie Abrahams

I am going to start with Professor Stuckler, if I may. You are publishing a report today from the University of Oxford and the London School of Hygiene and Tropical Medicine, describing the impact of sanctions on unemployment and employment. I wonder if you could very briefly describe what you did and the headline findings of that. I am particularly interested in the pre‑2012 effects on JSA claimants and the post‑2012 effects with the introduction of the new sanctions regime.

Professor Stuckler

We took the Department for Work and Pensions sanction data, collected across 375 local authorities in the UK, and compared that with data on the labour market statistics, also from official sources, on unemployment benefits and employment rates. Then we compared the pre‑2011 and post‑2011 period, when the UK coalition Government began to reform the work and sanctions regime. We found that, over the entire period we looked at, 2005 to 2014, for every 100 sanctions, about 24 people were flowing off unemployment benefit. After the reforms came into effect, this heightened so that about 43 people for each 100 sanctioned were leaving the system. We then looked at those who were leaving in association with a sanction. We found that fewer than 20% were returning to work. The rest were, for other and sometimes unspecified reasons, ceasing to sign on. We also looked to see if we could find an effect on employment rates of sanctioning across local authorities and did not find it, so that led us to the conclusion that sanctions appeared to be driving people off benefit, but few returned to work.

Debbie Abrahams

Thank you. That is very clear. Since the 2012 regime came in, 43% of JSA claimants who are sanctioned leave JSA, and 80% do so for reasons other than employment. Those are quite significant figures. Today, the ONS will be publishing JSA claimant count figures, and if you estimate that in December 60,000 JSA claimants would have been sanctioned, that would suggest that the unemployment figures, based on the estimates that you have suggested, would be about 25,000 lower than they are. Do you agree with that?

Professor Stuckler

We have not made that specific calculation, which is difficult to do, in part because our data, which was the latest available from official sources, only went up to March 2014 at the time, so we would be extrapolating. Some people also received multiple sanctions. In the data we analysed, there could be some small degree of double counting, but if you extrapolate the 43% estimate, it could be as high as the number you suggest.

Debbie Abrahams

What do you think is happening to the people who leave?

Professor Stuckler

It is a very good question, and unfortunately not one that we are able to answer with the quantitative data that we have. We are following up with qualitative work in some of the regions of the UK that have some of the highest rates of sanctions being imposed, such as Derby. We are also looking at Oxford, Manchester and a few other sites.

Debbie Abrahams

What do you think should happen, then? What sort of investigation do you think needs to follow on from your work, in terms of a qualitative and longitudinal study as well?

Professor Stuckler

One concern we have is that if, as our data show, people are not receiving benefit but also not getting into work, this puts them in a highly precarious, vulnerable situation. There is evidence from other countries that, when people encounter this precarious situation, they interact with highly costly social institutions—hospitals, jails, homeless shelters, emergency food banks and shelters—which can cost more, net, to taxpayers. We look to perform a full cost-benefit analysis that looks not just narrowly at employment but at the wider and potentially hidden costs of sanctioning.

Nigel Mills

Just a quick question, Professor Stuckler: I was just trying to work through the numbers you were quoting and was looking at figure 3 in the report you have published today. It says that of 46 who receive an adverse decision, 20 move off JSA, 3.5 for work, 16.4 to unknown destinations and none for other reasons. When you say fewer than 20% find work of those 20 who leave, how many of those 16.4 to “unknown” do you know did not go into work?

Professor Stuckler

Jobcentres, when they close an unemployment benefit claim, record the reasons why.

Nigel Mills

Sometimes they do.

Professor Stuckler

In the majority of cases they do. Correct, it was made optional in 2009, but over the period we have looked at, it has hovered at about 55% were and are still recorded in the system. The Jobcentre staff would like to be able to code that person as having found work, so these data would overstate the extent to which people who leave are finding work. Our calculation was based on that.

Nigel Mills

If I have been sanctioned, I am not going to be desperately keen to ring up and tell the Jobcentre I have just found work, am I? There must be a little fear here that this “unknown” could be completely unknown. A decent chunk of those could have been going into work. You just do not know, I guess. It makes the finding a little shaky, does it not?

Professor Stuckler

It is covering 55% of those leaving. I do a lot of work in epidemiology and that is a good response rate, as would be used for many studies of diabetes, obesity, heart disease and breast cancer to name a few. I would just point to the need to collect data, ideally longitudinally and at the individual level, as has been done in other countries, that can give more definitive answers to these questions about where people are going.

Nigel Mills

There is no way in your study of looking at real‑time information feeds from PAYE data to check whether people who had been sanctioned and gone off benefits were having tax or NI recorded against them. That kind of study has not been done and that data was not available to you.

Professor Stuckler

Real‑time data with precise categorisation of destinations unfortunately are not available, but it would be possible to do; other countries have done it.

Chair

Can I just ask about the targets and where there is doubt? In the research you have done, were you able to see whether there was a difference in sanction rates across the country? Some areas have high sanctions rates; some areas do not. What were the characteristics of the ones that had high and the ones that had low sanction rates?

Professor Stuckler

That is a good point. There is a remarkable degree of variation in the extent to which sanctions are being imposed in different regions, which is as high as above 10% in Derby, Preston and a few other local authorities we cite in the paper, and below 3% in others. We have not got to investigating the reasons for those discrepancies. That is the next step we will take.

Chair

There is no correlation between areas of high unemployment that have high sanction rates. I have an area of fairly low unemployment, but I do not know whether sanction rates are therefore higher or lower because of that, because the cohort that is reporting to Jobcentre Plus are the ones who are much harder and further away from the labour market, otherwise they would be in a job in what was, until the oil price collapse, a very buoyant labour market—I am going to have to change what I say now.

Professor Stuckler

That is something we are looking into in the international literature. There has been a suggestion that sanctions work less well where jobs are scarce and unemployment is high, so we will get back to you when we have answers.

Debbie Abrahams

I am just going to finish off very quickly. One for you, Professor Stuckler, as a follow‑up: you have rightly included confidence intervals in the sensitivity analysis, so there is considerable confidence in the figures that you have produced. I appreciate that these statistical models are difficult to understand for a layperson, but is JCP not incentivised for follow‑up? You would expect that there would be a degree of confidence from that perspective. Thank you; Professor Stuckler is nodding to that. Can I just move on to Mark and Helen very briefly? Regarding off‑flow, the Minister has denied that there are any targets around sanctions, as you probably know. Although we have been pushing for an independent inquiry, the Government have not been forthcoming, although they initially said about 15 months ago that they would. From your experience, what proportion of sanctioned people will go off‑flow as a result of that?

Helen Flanagan

It is difficult for us to determine that, because it is not fully recorded by the Department, but off‑flow is a published target, and our experience is that there is a focus on getting claimants off the books, so to speak, by any means, with off‑flow being that primary target. If you cannot get people into work, there is only one other way that you can get people off the benefit counts for that week to meet those cohort targets that they have. As Mark said before, we fully agree that there should be a fully independent review that looks at the sanctions regime as a whole, rather than just individual areas of issues. The problem with having these individual areas is that they can sometimes lead to negative and perverse behaviours. If you look at the cancellation rates or the number of referrals that do not result in a sanction being applied, that is where you get this practice, which they have brought in, that 80% of referrals must now result in a sanction to try to even it out. That is obviously the wrong approach to take.

Chair

The last section before everybody disappears off is from Teresa, who was not here at the beginning, but she had a good excuse. She had a Westminster Hall debate.

Teresa Pearce

Thank you. Apologies for not being here earlier. On the subject of sanctions, obviously we have the discussion as to whether they are relevant and whether they work. If we are looking at whether they work and we think they do not—I am not saying we do think that, but if we think they do not—what other alternatives could there be? I would like to ask Steve Hughes, because your organisation, Policy Exchange, has looked at this and you have recommended that the DWP pilots a yellow card system, which could be that benefits are paid on a card rather than a financial sanction. Could you talk a little bit about how this would work?

Steve Hughes

Yes, sure. I outlined it a little at the start of the session, but the basic principle is that, for a lower-tier first sanction, there would not be a financial sanction—it would be a non‑financial sanction—and there would be a pilot of whether that non‑financial sanction would drive better engagement with the Jobcentre as well. There are two elements to it. The first is payment in a different method from the one that the claimant is used to, to recognise the fact that it is different and the claimant has gone through a sanction. That would be paid on a pre‑paid card, twinned with daily sign‑on, or more regular sign‑on, with the Jobcentre. Now there are problems with that, obviously. For example, it might cost the claimant a lot more to sign on with the Jobcentre on a daily basis. It might cost money to implement a pre‑paid card system as well. Pre‑paid card systems do exist in other countries, such as Australia and America, but not for the purpose of sanctions. The technology does exist, but not necessarily for this purpose.

Teresa Pearce

What would be the difference to somebody between getting their money in cash into their bank account, and getting the same amount of money on a card?

Steve Hughes

It would be the recognition that ultimately the claimant—

Teresa Pearce

It is just stigma; is that what you are saying?

Steve Hughes

It is recognition that you have done something different.

Teresa Pearce

What difference would it make to the individual?

Steve Hughes

It would be recognition to them that they have had a sanction applied to them and they are not receiving their benefit in the same way anymore.

Teresa Pearce

That is the only difference. It would be just that they could use the card exactly as they could with cash.

Steve Hughes

We did outline in the report that you could use these cards to apply different methods of sanction to it as well. For example, again in Australia and America, there are methods of controlling what can be purchased with the cards. The difficulty with that is that you require technology, on behalf of say the retailer, to develop that system. It is important to point out that we did not just say that that is what should be applied, but it is a potential method of non‑financial sanction. Really the point that we made was that it is about non‑financial sanctions.

Teresa Pearce

It is a discussion point looking at alternatives, rather than that you think it is the answer.

Steve Hughes

Yes, absolutely.

Teresa Pearce

Ben Robinson, your research has concluded that one of the things that is key to helping people back into work and building the potential for them to job-seek is a strong trusting relationship between the claimant and the adviser. That is a really key element. Do you think that the potential financial sanctions have an impact on that relationship? Do you think that the person you are meant to trust and engage with should be the person who can stop your money?

Ben Robinson

We did a survey with the Employment Related Services Association of a number of Work Programme providers, and the feedback from that was that 60% of advisers thought it did have a negative impact, but about the same proportion also thought that it should be part of the system. It does have that potential. I agree with Steve that we need an alternative for the first sanction, a non‑financial sanction, and we would agree with the previous witness who talked about a first‑warning system. That would give an opportunity to check whether the Claimant Commitment is appropriate to their current situation, as well as signifying that there has been an offence. That is a more appropriate way of doing it without causing confusion as well as a stigma being attached.

Teresa Pearce

Do you think there is any evidence that financial sanctions drive behaviour?

Ben Robinson

We would strongly urge a review to see whether they do improve job outcomes. Anecdotally from some of our work, as I said before, we believe they can do in a very small number of cases, but only where the primary barrier is attitudinal. As I said, the vast majority of people do want to find work. The severity of sanctions at the moment is out of proportion with the benefits that they could cause.

Teresa Pearce

What you would suggest is, as a first instance, some sort of marker, but not necessarily a financial sanction. Have you any thoughts on what that could be? Would it be just a verbal warning or something else happening? Would there be increased signing‑on?

Ben Robinson

It would not be dissimilar from the workplace, where you may have a formal official warning, whereby you would check whether the conditions placed on people are appropriate, but also whether the level of support that they are receiving is appropriate. This comes back to the idea that the Claimant Commitment is a reciprocal arrangement, where they can expect a certain level of support from the Jobcentre, as well as an appropriate assessment of their situation and the number of requirements on them, before the financial sanction kicks in. We would also say that, while that review is taking place, we would strongly urge the system to revert back to before 2012, before it became that much more stringent, because there is no evidence that that increased severity has had any positive impact on job outcomes at all.

Chair

Thank you very much. We have exhausted our time but probably not our questions. If we could have the extra evidence, we would be grateful. I would just point out that the reason for this inquiry is that we thought we had got the Minister to agree to the independent inquiry you mentioned in your evidence, but discovered that she had not. That is part of the reason for us holding this inquiry. We do not have, as a Select Committee of the House of Commons, the breadth of ability to do the full independent inquiry that the Government can commission, so that is part of the thinking that lies behind our looking at this. It is obviously an important issue and affects not just your members in the PCS but all of our constituents who are affected by the sanctions regime. Thank you very much for coming along this morning. Your evidence will be very useful to us when we come to write our report. Thank you very much. Oral evidence: Benefit sanctions policy beyond the Oakley Review, HC 814 40 [1] Clarification from Witness: after “whether you can apply for a hardship payment” delete “or whether you can appeal.” [2] Clarification from Witness: after “any kind of guidance” insert “in law”