Long-suppressed DWP report shows benefits sanctions 'slow progress into work'

DWP forced to release 2020 report – after making more people subject to sanctions
Job centre. Photo: Shaun A Daley/Alamy

By Tevye Markson

11 Apr 2023

The Department for Work and Pensions has been forced to release a report which shows that sanctioned benefits claimants find work less quickly and are more likely to earn less.

Sanctions have a "negative impact of a sanction on claimant finances", according to the draft report, which was completed in August 2020 and has been published under Freedom of Information laws.

DWP has blocked the report's publication for the last few years, with then-work and pensions secretary Thérèse Coffey saying its release was not in the public interest despite previously committing to publish it.

But last month, the Information Commissioner's Office forced the department to release the study following a series of FoI requests. There is a “strong public interest in scrutiny and understanding of the information available to those deciding whether to continue with a controversial policy such as sanctioning benefit”, the ICO said.

The government has been tightening the requirements that people receiving Universal Credit must meet or risk having their benefits reduced or stopped entirely for a period of time.

Chancellor Jeremy Hunt announced in March’s Spring Budget that sanctions will now be applied “more rigorously” for people who do not meet work-search requirements or choose not to take up a “reasonable” job offer.

He also said the government would increase the number of people who are subject to the “intensive work search regime”, which requires claimants to attend weekly or fortnightly meetings and spend up to 35 hours job hunting a week. Those who fail to meet the requirements face sanctions.

Hunt's raising of the hourly working threshold for people subject to the intensive regime – from 15 to 18 hours a week – came just six months after his predecessor Kwasi Kwarteng raised it from nine to 15 hours.

The number of people being sanctioned by DWP for failing to meet job-search requirements has also risen considerably in the last seven years – apart from a huge dip during the pandemic – from an average of less than a thousand-per-month in 2016 to regularly reaching higher than 40,000-per-month in 2022.

With the use of sanctions rising, the department's refusal to release the report led to MPs last year accusing DWP of having an entrenched "culture of secrecy".

In a context note attached to the report, the department said it had decided not to publish the study as it felt it would "present a misleading picture” because it did not address the deterrent impact of sanctions and the limits of its evaluation methods. However, DWP admitted in the note that these limitations were outlined in the report.

The report said: “A sanction leads the average claimant to exit less quickly into PAYE earnings and to earn less upon exiting. In a narrow sense, this constitutes a negative impact of a sanction on claimant finances.

“However, this excludes the wider role of a sanction, which acts to incentivise compliance with a conditionality regime that encourages work search and earnings increases. The negative financial effect reported should therefore be balanced against the likely positive deterrent effect that the sanction regime has by incentivising claimant attendance."

David Webster, a Glasgow University academic who used FoI laws to force the department to release the report, said the 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,” he added.

However, the Institute for Fiscal studies questioned the study's validity, saying it is not surprising that it showed sanctions appear to reduce the likelihood of working as they are “often imposed precisely because the work coach believes that the claimant’s work search has been insufficient… and clearly, work-search efforts are going to influence one’s ability to get a job”.

It said the bigger risk with sanctions “is that they create a lot of hardship”.

Claimants can be docked hundreds or sometimes thousands of pounds from their benefit payments for as long as six months.

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.”

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