Benefit Sanctioning

Sheila Gilmore Excerpts

Tuesday 2nd December 2014 Westminster Hall

[Paul Blomfield]

I thank the hon. Gentleman for his intervention and I will come to that point; often a part of the communications breakdown is people’s lack of awareness of the hardship payments that they are entitled to. The Government have to deal with precisely that issue as part of the challenge.

In the time I have left, I want to stress the inhumane nature of some of the sanctioning I have referred to. It is clear that, if claimants do not understand agreements, they will not keep them and sanctioning will not have its desired effect as a deterrent against non-jobseeking.

[Sheila Gilmore (Edinburgh East) (Lab)]

On the point raised a moment ago, my experience is that some people without dependents or without other needs do not get hardship payments. In Scotland, we have the Scottish welfare fund—our equivalent of devolving responsibility for hardship payments to local authorities—but authorities were telling people, at least initially, that those who had been sanctioned could not apply for help from it.

[Paul Blomfield]

I thank my hon. Friend for that important clarification. Although hardship payments are available to some vulnerable groups—as I said in response to the hon. Member for Wycombe (Steve Baker), there is a problem even there, and communication is breaking down—there are many groups to whom payments are not available. One recommendation, which the Minister should address, is that access to hardship payments should be given to all householders, not just those in certain defined groups.

Sanctioning is not only ineffective in many circumstances, but deeply damaging. That is particularly the case when it has a knock-on effect on housing benefit and council tax support for those on the lowest incomes. A claimant and their family can soon find that they face rent arrears and that they are unable to pay basic bills. In the case of council tax, non-payment is punishable by imprisonment.

Often, people find themselves in that situation without adequate warning, so they have no time to plan for the shortfall. Emma, another Citizens Advice client mentioned in the report, came very close to losing her home as a result of the knock-on impact of a JSA sanction. Sadly, she is not alone. When margins are tight, the slightest change in income can trigger a downward spiral into deep money problems. The system is not designed for that, and rightly so—how would someone in such dire straits be able to find a job?

The DWP agreed to change its IT software and amend the notification sent to local authorities when a sanction has been applied to allow housing benefit to continue without interruption. Action on that was promised by the autumn, but it is now December. Can the Minister assure us today that that relatively minor change, with the potential to make a substantial difference to the lives of some of the poorest people in our communities, is happening or is imminent?

Will the Minister respond to the report’s proposal that all households, as I said a moment ago, have immediate access to hardship payments to avoid the situations I have talked about? Will financial redress be considered where a sanction is found to have been incorrectly applied, resulting in significant consequences and distress for those involved?

There is much more to be said on the issue, and I have asked the Minister a number of specific questions. I want to end with one point.

--- Later in debate ---

[Sheila Gilmore (Edinburgh East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this debate. I want to look at two particular groups affected by sanctioning and how changes could improve their situation. The first group is single parents.

Gingerbread, which supports and campaigns on behalf of single parents, published a report in November called “Single parents and benefit sanctions”, which looked at some of the issues. Its concern is that single parents appear to be more likely than other claimants to receive what is called a “non-adverse sanction decision”, where it is decided not to sanction. Single parents receive such decisions in 41% of cases compared with 32% of other claimants, which means that more inappropriate referrals are being made for single parents. Someone might say, “Okay, they don’t actually get sanctioned in the end,” or, “The sanction is overturned within the reconsideration period,” but it increases anxiety and the difficulty people face while they go through the process. A substantial minority of decisions are overturned not before the sanction is applied, but afterwards, during the initial reconsideration period. In that post-sanction period, 26% of low-level sanctions applied to single parents are overturned, 46% of intermediate-level sanctions—that is very high—and 17% of high-level sanctions. That suggests a relatively high proportion of wrong decisions, which is particularly important for departmental working.

The Gingerbread report also cites a previous piece of research done for the DWP and published in 2013, which looked at lone parent obligations in the period towards the end of the previous Government. That DWP study showed that in getting people back to work, the effects of voluntary and tailored back-to-work support were greater than the effects of programmes based on increasing conditionality. Tailored support had a higher success rate. That is important because it was the DWP that commissioned the report.

If single parents or any other group are to be involved, it is particularly important that the claimant commitment that people are expected to enter into is individually tailored. We are told by Ministers that it is individually tailored, but the experience of many constituents is that it does not appear to take their circumstances into account. There are single parent flexibilities in the system, which allow the conditionality applied to single parents to be tailored to their particular needs, but Gingerbread found that in a number of cases that was not happening. When universal credit is rolled out beyond the 17,000 people currently on it, to the whole of the UK, only one in 12 of the lone parent flexibilities will be carried over in its entirety. Gingerbread is concerned that universal credit makes it less likely, not more likely, that single parents will be protected by conditions that take into account such things as school holidays, school hours and the difficulties of working evenings and nights for lone parents responsible for their children.

Gingerbread makes some practical proposals—it has not just put out a report that says, “This is all awful.” It suggests that at the start of a claim there should be a thorough diagnostic interview with a specialist lone parent adviser—a jobcentre provision that seems to have become less common of late—to give appropriate conditionality; that similar processes should be applied if that particular person is later referred to the Work programme; that if claimants receive a sanction, they are given better information on hardship payments and how to appeal, as mentioned by other hon. Members; and, of course, that lone parent advisers be reinstated.

In a worrying trend, another group that appears to be increasingly affected by sanctions is those on employment and support allowance in the work-related activity group who have been through the work capability assessment and have been assessed as not fit for work at this stage. These people are not expected to be job-ready, but they can be referred to the Work programme if their prognosis is that they will be fit again within 12 months, and people are increasingly being referred. Most sanctions for this group appear to arise from the Work programme experience. The number of ESA sanctions in June 2014 was 5,132, up from 1,091 in December 2012. The rise over that period was steady and it is still going up. Of the sanctions, 431 were for failure to attend a mandatory interview, but 4,700 arose from a failure to participate in a work-related activity, which basically means the Work programme. Many of these people have mental health problems or learning disabilities, so we must ask why this group is being increasingly sanctioned and how effective that can be.

However much some deny it, there is a link between the increasing use of food banks and a decision that has been made about benefits. Some of those decisions involve delays, but a survey undertaken this year by the Child Poverty Action Group, Citizens Advice Scotland and other organisations found that 20% to 30% of food bank users said that their household’s benefit had recently been stopped or reduced because of a sanction. I do not deny that often there is a backdrop of other, wider problems, as shown by the report. Many people have a background of homelessness, recent marital separation, relationship problems, ill health or bereavement, but it is against that backdrop that sanctions have a particularly dramatic impact, because people in a more stable family situation can more often get help from family members.

Ministers in this Government sometimes give the impression that the growth of food banks is somehow a ploy by anti-Government campaigners to make them look bad, but I genuinely have not seen that before. Had it been a problem during, say, the Thatcher Government, I am sure that we would have known about it and would have been shouting about, so it is a relatively recent phenomenon.

We are not saying that there should not be any conditionality in the system. I was struck by a report by Paul Gregg that was prepared for the DWP before the last election. His fundamental recommendation was that sanctions must be linked with personalised support. In the foreword to the report, he states that there are

“a number of risks associated with conditionality that need be designed out as far as possible at inception”

of the system. The problem is that the risks have not been designed out properly, which is what causes severe hardship among some of those sanctioned; some people are then directed to inappropriate courses or jobs, which do not help them to move forward; and some are pushed outwith the system altogether.

Paul Gregg’s proposals are interesting when juxtaposed with what has actually happened. He recommended that for a first offence, if we want to call it that, there should be a formal warning built into the system. Interestingly, that there should be such a stage prior to sanctions being applied has also been recommended by Policy Exchange, which is far from left-wing. A second offence would result in the

“loss of one week’s JSA”

and a third offence would lead to the loss of two week’s worth. Interestingly, he recommended that after a fourth offence there should be

“be an investigation by Jobcentre Plus…to determine the underlying reason”

and to talk to those who gave the individual support in order to find out what was actually going on before applying “a non-financial sanction”. He thought it would be a small group, but one that had to be looked at in some detail. Those proposals, and the need for personalised support and a much less draconian system than the one applied by the Government, are worth considering.

In conclusion, perhaps the Minister will be good enough to cut out of her reply the usual generalisations about how good work is for people, with which we all agree, and how it is the route out of poverty. Yes, being employed is a necessary part of moving out of poverty, but it is insufficient in many cases. We can bypass that debate because we keep having it and we are not moving forward. No Labour Member and, indeed, few people that I meet in my constituency think that people should not work if they can, but we do have concerns about the system for deciding who is fit for work. Will the Minister concentrate instead on why sanctions referrals and sanctions have increased, particularly in relation to the ESA group? What is her response to the specific recommendations of organisations such as Gingerbread? What is she doing to evaluate whether sanctions actually work to increase the number of people entering employment, which is meant to be the answer? What research has she commissioned to find that out?

--- Later in debate ---

[Esther McVey]

The Labour party has already been brought to task by the UK Statistics Authority for talking about a significant increase in zero-hours contracts that did not happen. The contracts began in 2000 as the minimum wage was brought in. We know the number of people on them, and for the vast majority they work. When they do not work, we have not allowed exclusive contracts. We are doing something that the previous Government did not do. We want to ensure that people have a good job—not just any old job, but a job they want so that they have a career and progress. We know that three quarters of the jobs created since 2010 are full-time. I hope that answers the question.

The other key issue—for me, probably the most important thing the Government have done—is that fewer children are now growing up in workless households.

[Sheila Gilmore]

Will the Minister give way?

[Esther McVey]

I will not give way. I am setting the scene. I will answer the questions raised, and then I will take some more interventions, but not at the moment.

We know that the best route out of poverty is to have a job and that children born into a household where no one works are three times more likely to be in poverty. This year, we have reduced that number by 390,000. We are talking about poverty, and about support and help for people to get a job and to move forward. The Government have done significantly more than anybody else to support people on their way and into work. That is the background of sanctions and why they exist, and what we must do to meet and match and provide support.

We have introduced the youth contract for young people, with an extra 250,000 extra work experience places, and sector-based work academies. This year, we have seen the biggest fall in youth unemployment—by 250,000—since records began. We are fundamentally turning the lives of those people around, and sanctions are a tiny part of a massive system of support.