Government must review the use and impacts of benefit sanctions

21 February 2017

The Public Accounts Committee report say that unexplained variations in the use of benefit sanctions are unacceptable and must be addressed.

Sanctions "have increased in severity in recent years"

In the report, the Committee urges the Department for Work & Pensions to review the use of sanctions, which it finds "have increased in severity in recent years and can have serious consequences".

The Committee acknowledges sanctions—a reduction or suspension of payments because a claimant has not met conditions for receiving benefit—do encourage some people into work.

However, it concludes the Department has poor data with which to evaluate what works and is unable to estimate the wider impact of sanctions—including their overall cost or benefit to the public purse.

Sanctions imposed inconsistent by different jobcentres and providers

The Committee highlights the inconsistent imposition of sanctions by different jobcentres and providers, with some Work Programme providers referring twice as many people for sanctions as other providers in the same area.

It is also concerned that the Department does not know whether vulnerable claimants, some of whom can be excused from having to meet benefit conditions, receive the protection to which they are entitled.

Among its recommendations to Government, the Committee adds its voice to calls for the Department to undertake a trial of warnings, rather than sanctions, for first sanctionable offences.

Significant gaps in Department's understanding of sanctions

The Department should monitor variations in sanction referrals and assess reasons for the differences across jobcentres; report back on the take-up of protections for vulnerable groups, and "set out what more it will do to assure itself that Housing Benefit is not being stopped in error due to sanctions".

The Committee concludes there are significant gaps in the Department's understanding of sanctions and urges it to make and report progress in improving data systems, including on linking earnings outcomes to sanctions data.

The Department should also collaborate on work to estimate the impacts of sanctions on claimants and their wider costs to government.

Chair's comments

Meg Hillier MP, Chair of the PAC, said:

"Benefit sanctions have been used as a blunt instrument by Government.
It is an article of faith for the Department for Work & Pensions that sanctions encourage people into work. The reality is far more complex and the potential consequences severe.
Sanctions and exemptions are being applied inconsistently, with little understanding of why.
Some people who receive sanctions stop claiming without finding work, adding to pressures on other services.
Suspending people's benefit payments can lead them into debt, rent arrears and homelessness, which can undermine their efforts to find work.
A third of people surveyed by the charity Crisis who were claiming Housing Benefit had this stopped in error because of a sanction – an appalling situation to be faced with.
All of this highlights the need for a far more nuanced approach to sanctioning claimants, with meaningful measures in place to monitor its effectiveness.
As a priority the Government must make better use of data and evidence from the frontline to improve its understanding of what best supports both claimants and the interests of taxpayers in general."

Report summary

The Department for Work & Pensions uses sanctions to encourage people to meet conditions for receiving benefits.

We know that sanctions encourage some people into work but sanctions have increased in severity in recent years and can have serious consequences, such as debt, rent arrears, and homelessness.

It is therefore important that the Department uses sanctions carefully and protects vulnerable people from unnecessary hardship.

Unexplained variation in use of sanctions

Yet there is an unacceptable amount of unexplained variation in the Department's use of sanctions, so claimants are being treated differently depending on where they live.

The Department has poor data and therefore cannot be confident about what approaches work best and why, and what is not working.

It does not know whether vulnerable people are protected as they are meant to be. Nor can it estimate the wider effects of sanctions on people, and their overall cost or benefit to government.

Further information

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