Benefit sanctions aren’t working — but how did we get here?

On 6 April, the Department for Work and Pensions (DWP) released a previously withheld report on benefits sanctions. Most people who claim benefits are expected to take certain actions to find work or increase their earnings. If they don’t do what they’re asked, they can be sanctioned (e.g have money taken away from their benefits). The DWP’s report looks at how effective sanctions are in getting people into higher paid work.

The findings are damning.

The report states:

“the impact of a sanction is to decrease the rate of exit into higher paid work.”

This suggests that people who are sanctioned take longer to move into paid work and, when they do, they have lower earnings.

Not only have sanctions not been beneficial, they may have actually been harmful to the pay and progression of people who were sanctioned. It’s not surprising. The DWP found in 2018 that asking claimants to see their work coach more often, or risk a sanction, did little to boost their earnings or in-work progression.

So, if the data shows sanctions actually have a negative effect on employment, how did we end up with this complex system?

First, an explainer.

In the UK, all working age benefits claimants are subject to conditionality. This means they must meet a set of expectations or activities, such as meeting with a work coach. These conditions are set out in a claimant commitment.

Conditionality is in turn underpinned by sanctions. Under Universal Credit (UC), if you miss a meeting with your work coach you may be sanctioned by up to 100% of your standard allowance until you attend another. Or, if you turn down a job offer, you can be sanctioned for 13 weeks the first time, then 26 weeks after that.

Where it all began

Conditionality has been a feature of welfare in the UK since social security was first introduced. The Poor Relief Act of 1601 offered support on the condition that recipients took up work if they were able, while those who refused were put to work in a ‘house of correction’.

Fast forward to the 20th century, where unemployment support under the modern welfare state was offered on the condition that recipients look for work. In 1942, the Beveridge report proposed that unemployment benefits should be conditional on work or training.

However, it was from the 1980s that benefits conditions became much stricter. When the Conservative government introduced Jobseeker’s Allowance they also increased monitoring of unemployed claimants’ efforts to find work.

Welfare conditionality, including benefits sanctions, were then expanded under New Labour as part of the New Deal. The New Deal targeted young people unemployed for 6 months or more, but was later expanded to include the long-term unemployed, lone parents and disabled people. In 2008, the introduction of Employment and Support Allowance increased the conditionality and sanctions on disabled people and those with long-term health conditions assessed as capable of work.

Back to the Conservatives who, with their coalition partners, introduced Universal Credit (UC) in 2013. UC replaced a range of benefits and further extended requirements for claimants to seek work, including sanctions which can last indefinitely ‘until compliance’.

We’re now entering a period where conditionality feels turbocharged

In March, the government released the disability white paper which announced significant changes to disability benefits. Underneath the complexities, a key change is that now conditionality will be determined on a case-by-case basis by a person’s work coach. This means over 1 million disabled people or those with a long-term health condition could be subject to conditionality despite previously being exempt.

Meanwhile, the positive announcements on increased childcare support within UC have been accompanied by a ramping up of the expectations on parents of young children to prepare for and move into work. We have also recently seen a steady increase in the hours that those receiving UC are expected to work before exiting the conditionality regime.

If we could be confident that conditionality worked — that it did lead to better outcomes and a more efficient welfare state — then these changes might feel more positive. As it stands, conditionality as an approach remains very much unproven. After four centuries of trying, perhaps it’s time for something new?