Written evidence submitted by the Kirklees Financial Inclusion Steering Group (SAN0065)

Summary

The Kirklees Financial Inclusion Steering Group is a multi-agency group with members from voluntary, public and private sector organisations, advice agencies, housing providers and tenant associations. The group coordinates and commission’s financial inclusion work in Kirklees West Yorkshire.

 

 

 

 

 


Contents

Summary

Sanction use in Kirklees

Who is sanctioned disproportionately?

The appeal process and hardship

Sanctions as part of the benefit system

The effect on the Individual and families of sanctions

Impact across the public sector

An Alternative Model

Recommendations from the Kirklees Financial Inclusion Steering Group


1.      Sanction use in Kirklees

  1. Since the more rigorous sanctioning regime was introduced in October 2012 there has been an increase in the number of JSA & ESA claimants being sanctioned. Nationally from Oct 12 to Dec 13 over 1 million people suffered an adverse sanction an increase of 60%. In Kirklees this meant 10,361 sanctions had been made.

 

  1. The sanctions in Kirklees often seem to be imposed for various reasons including:

 

 

  1. The chart below shows the number of sanctions that have been applied to JSA recipient by each of the job centres in the Kirklees area.

 

 


Source: Kirklees Job centres - Decision Making and Appeals System (DMAS), via Stat-Xplore & NOMIS Intel System


5.      Who is sanctioned disproportionately?

  1. There is evidence that sanctions are experienced disproportionately by the more disadvantaged and vulnerable claimants, those who are more socially deprived or isolated and longer-term benefit recipients. Claimants facing multiple barriers to work (lack of skills, low self-esteem and so on) are at higher risk of receiving sanctions. Young people have also been hit particularly hard; despite making up only 24% of all JSA claimants they have received 39% of all benefit sanctions.

 

  1. Local evidence suggests that many vulnerable claimants do not set out to be non-compliant but they often lead chaotic life-styles, have poor skills or do not understand the conditions they are supposed to fulfil.

 

  1. In terms of ESA sanctions we are seeing cases where individuals have conditions that fluctuate, they are “having a good day” when assessed and deemed work ready but it reality they might only have a good day once a week, or one good week in six, but they are forced into a commitment that does not reflect their individual needs. This has been seen locally with conditions such as Multiple sclerosis, chronic fatigue syndrome (ME) and depression.

10. The appeal process and hardship

  1. Sanction decisions can be challenged. However, even if a sanction decision is overturned, a claimant may not receive the money owed to them straight away or indeed in some cases for many months. Claimants therefore risk all the short-term disadvantages of being sanctioned, even when they are not at fault.

 

  1. Local data shows the proportion of actual sanctions and the total referral for a sanction decision; applying national trend data for 2013 from the national trend information we could assume that 1 in 5 sanctions decisions are incorrectly made. This does not take into account the impact or trends that “mandatory reconsideration” will have which came into effect in late 2013.

 

 

Local Sanctions appeals to March 2014

 

 

Total sanctions referrals to Decision Maker

10361

Overturned at stage 1

1914

Overturned at stage 2

48

Total sanctions overturned (19%)

1962

 

Source: Decision Making and Appeals System (DMAS), via Stat-Xplore

 

  1. A system of DWP funded hardship payments exist. In order to receive payments the claimant is required to prove they are at risk of hardship. In practice, very few claimants know that hardship payments are available, and they would not be payable to those who are suspected of a breach of commitment only those who have been to a decision maker and been officially sanctioned which is causing financial hardship to innocent claimants in 50% of cases.

 

 


15. Sanctions as part of the benefit system

  1. Conditionality has long been a part of the benefit system and is recognised as being important. However, the use of financial sanctions to enforce conditionality is not fair. It has created a culture of fear amongst those seeking work, and a fear of the very service that is supposed to be helping them, and sanctions have no place in the welfare system.

 

  1. Sanctions and the threat of sanctions further disengage people from searching for work; it becomes a matter of proving activity such as number of applications, whereas in the real world researching an organisation or the potential progression opportunities for a role, preparing for an interview would all be seen as acceptable precursors to work. In the JSA system it appears to be about applications submitted or proving that work has been sought; with the ever presence of a sanction should numerical targets not be hit by the job seeker.

 

  1. At a macro level what sanctions appear to be doing is forcing people into low paid work, a “take the first thing that comes” mentality seems to purvey in job centres, but it is better for the individual if the a role with good wages, conditions and potential will improve the wellbeing of the individual and the wider economy through increased tax receipts. It is probable that fewer people will bounce in and out of sickness and unemployment benefit if a job role they are seeking is appropriate for their needs. The work of Dame Carol Black has made this clear over a number of years and yet the job seeking system fails to adopt any aspect of it.

 

  1. There is also a the return on investment in policing sanctions, the cost of a “decision maker”, work required to prepare appeals on both sides and the court costs that higher appeals have. It has to be asked whether all this time, effort and money would be better spent on creating a highly valued job seeking and preparation for employment service.

 


21. The effect on the Individual and families of sanctions

  1. Many people experience food poverty because of sanctions or pending sanction decisions, often using food banks to meet their immediate needs. Sanctions also make people very anxious, and bring acute financial insecurity at the point when many are trying to move on with their lives. The financial hardship may also have implications for emotional well-being and relationships with family, especially if the family are supporting the sanctioned individual. In addition, for some claimants it makes it more difficult for them to search for work as they do not have money to pay for transport to interviews.

 

  1. The impact on younger claimants who live with their parents may be mitigated by financial support from them, but this simply spreads the impacts of the sanction onto the wider family.

 

  1. When sanctioned, claimants should continue to receive Housing Benefit, but rent arrears are common because claimants do not know to notify the local authority of their circumstances, and subsequently their Housing Benefit is stopped automatically via a DWP notification. This situation seems to arise therefore all too commonly, either through errors in Jobcentre Plus end of the process or in interpretation at the local authority revenue and benefits end of the process. This is a serious additional and unnecessary penalty for anyone who has been sanctioned as it can lead them into significant debt very quickly and may ultimately threaten their tenancy, leading to homelessness.

26. Impact across the public sector

  1. At times of extreme stress and desperation increases in alcohol, substance, self and domestic abuse are seen, attributing this explicitly to benefit sanctions is not easy but general assumptions could be made and the costs across the public sector and wider society could spiral exponentially.

 

  1. Emotional Ill health caused by stress and anxiety has damaging and long lasting consequences for the individual, their family, and the public purse. The costs of community and in patient mental health services are increasing and the accessibility in the community is patchy and requires engagement with another system of government.

 

  1. Data from the Huddersfield Welcome Centre food bank which receives referrals from a range of agencies shows that in the first 10 months of 2014 year sanctions have been the reason for over a third of food bank referrals, other food banks in the area have reported similar trends.

 

  1. The impact of sanctions across the public sector is potentially vast, in simple terms the administration of local welfare provision is funded out of a public pot, the Welcome Centre and other food banks have overheads and require funding to support their work, some of which comes from public sources. The administration of social landlords engaging with each individual to ascertain the reason a housing benefit claim has ceased is also effectively public funds.

 

  1. The costs of decision makers and the entire appeals process must cost the DWP a significant amount of money, in a system that is challenged to reduce the overall benefit bill.

33. An Alternative Model

  1. There needs to be a supportive job seeking system, a system that prepares people for work; a system that understands and support positive behaviour change.

 

  1. There is an alternative - for a first offence there should be a warning. If further failures are seen it has to be asked why the individual fails to engage with the employment system and additional support rather than sanctions should be given, However if all else fails and after persistent non-compliance or unreasonable refusal of work, training or additional support, there may be little option but to imposes a non-financial sanction this could take the form of work similar to that used under the restorative justice programme, this would be in addition to extra support and guidance for the individual.

 

  1. There also needs to be compassion in the system, when most people who are in work experience bereavement or short-term ill health an normal employer would act with compassion, giving people time to attend funerals get their health back on track, this would only mean a couple of days out of the system but would safeguard claimants wellbeing.

 

  1. The system needs to be understanding, ill-health and emotional wellbeing for some can come in peaks and troughs, the system needs to allow people to have fixed short term breaks so they can focus on getting well rather than struggling and failing to meet their commitment.

39. Recommendations from the Kirklees Financial Inclusion Steering Group

  1. There are some key flaws in the current sanction system; based on the evidence in this paper and discussions across the public and voluntary sector the following observations can be made:

 

  1. Fundamentally there needs to be a shift in policy from punitive to supportive conditionality and sanction use.

 

  1. Support – There needs to be a clear message about support that is available to those who have been sanctioned, this needs to be consistent across job centres, public and community support networks. This should include an explanation of the process and where people can go for assistance.

 

  1. Right of appeal – at the point of sanction individuals need to be aware of their right to appeal, this right of appeal must have a fixed time response period ideally within hours rather than days.

 

  1. Hardship payment - All sanctioned claimants should be told about the availability of hardship payments and offered support in applying for them when appropriate. It is essential that claimants have a good understanding of the sanction regime and their own responsibilities within it.

 

  1. Literacy – Literacy and the ability to understand communications from DWP is difficult for some individuals, they require clearer instructions about what is required and the implications if they do not fulfil their commitment. People should be encouraged to seek advice if they don’t understand.

 

  1. Housing benefit – the coding of housing benefit data must change from a simple stop instruction sent to payment systems to a sanctioned or stopped marker, so only those who are ineligible cease to get the benefit rather than the sanctioned claimant. Housing benefit does cease when people are no longer eligible or find work etc. however it must not be stopped automatically when people are sanctioned. This simple change would save the local authority and other support infrastructure organisations a great deal of time and money.

 

  1. Discretion - The system urgently needs to have a discretion element in applying a sanction so that minor errors or good reasons for breaking conditionality are not penalised by a sanction. This would also give scope to support those who are in chaotic lifestyles and situations.

 

  1. Role of the Decision Maker & Job centre – The balance from support to enforcement within Job centre seems to have shifted, fundamentally their role should be to encourage and support individuals into work which support those individuals and boosts society and the economy in general. There does need to be some form of conditionality, as there always has been but the apparent punitive system currently in operation will arguably only compound the problems of those on JSA or ESA and leave a very troubled, costly and dejected group who may never be able to find fulfilling work.

 

11 December 2014

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