Benefit sanctions slow down claimants’ progress into work and are likely to force them into taking lower-paying jobs that leave them hundreds of pounds a year worse off, according to an internal report that the government tried to suppress.
The findings of the Department for Work and Pensions (DWP) report echo a series of independent studies showing sanctions – in effect fines amounting to hundreds of pounds imposed on claimants for supposed infringements of benefit rules – are ineffective as a way of getting people into jobs or to work more hours.
The report is embarrassing for the government, which has aggressively promoted sanctions as part of its plans to force claimants to take a job or work more hours. Completed in August 2020, its release was blocked by the then work and pensions secretary, Thérèse Coffey, on the grounds it was “not in the public interest”.
Experts said it was shocking that the government had clear evidence of the negative effects of sanctions for more than two years and had actively sought to keep the findings under wraps while overseeing a huge rise in the numbers of sanctions on universal credit claimants.
“The DWP’s internal study shows that for the average claimant, sanctions damage both work prospects and earnings. You can see why ministers wanted to keep the report quiet,” said David Webster, a Glasgow University academic who successfully used freedom of information laws to force the DWP to release the report.
Rachel Casey, a policy adviser at the Joseph Rowntree Foundation, said the report showed sanctions were not effective. “It takes them [sanctioned claimants] longer to find a job, and those who do find a job after being sanctioned earn less than those who aren’t sanctioned,” she said.
The report said its findings suggested sanctions “do not lead to large shifts in job finding rates but may affect the type of job that people take up, shifting people towards lower-paying work that changes their universal credit work group without ending their universal credit spell”.
Sanctions punish claimants for not spending enough time searching for jobs, or failing to attend meetings with jobcentre work coaches. They have been a key plank of successive governments’ approach to benefits and work on the assumption that they “incentivise” claimants to engage with the jobs market. The average sanction is £660.
They have been widely criticised in recent years, however, with a series of studies showing that sanctions are ineffective while being likely to leave claimants impoverished, unwell and less likely to work. The DWP study released on Thursday did not look at the impact of sanctions on claimant health.
Last month, the chancellor, Jeremy Hunt, promised in his budget speech that sanctions would be “applied more rigorously” to get more people into the labour force. The Guardian subsequently revealed that parents on benefits with young children would face sanctions as part of radical plans to force them to work more hours.
The DWP’s research shows parents and lone parents who were sanctioned would not speed up their move into work, and would get, respectively, £38 a month and £34 a month less on average when they moved into a job.
The DWP has persistently defended the use of sanctions. Last week, Mel Stride, the current work and pensions secretary, told MPs he was “satisfied overall” with the way the sanctions system worked, insisting that sanctions had a “deterrent effect” that meant the majority of claimants complied with their benefit conditions.
In a “context note” attached to the study, the DWP said it had originally decided not to publish because the study did not address the deterrent effect and so “did not present a comprehensive evaluation of benefit sanctions”. The “relatively small” negative financial effect on claimants should be balanced against “the likely deterrent effect” of the regime, it said.
The Institute for Fiscal Studies said it “did not put much store” by the study, which it argued was not methodologically robust. “The bigger risk with sanctions, which generally remove a large fraction of household income (for a period) from people with already low incomes, is that they create a lot of hardship,” it said.
A DWP spokesperson said: “Sanctions – 97.6% of which are applied when claimants fail to attend mandatory appointments – are measured and proportionate. They ensure fairness runs through the system, both for claimants and the taxpayer, and it’s important to note this report does not assess sanctions’ deterrent effect.
“Conditionality is a cornerstone of our support with sanctions designed to encourage people to meet certain commitments, preparing them for workplace responsibilities. Most claimants agree this makes them more likely to look for work or take steps to prepare.”
