Sanctions are going too far and causing destitution

Since 2010, the scope and severity of benefit sanctions has been at the centre of the politics of welfare reform. While they are an inevitable part of a system with conditions attached to receiving benefits, says Chris Goulden, sanctions should be used as a last resort, not designed to cause destitution. 

New research published by the University of York this week explores the effectiveness and impacts of sanctions on the lives of those who receive them. The centrepiece of the research is data from several waves of interviews over the last five years with nearly 500 people who were subject to welfare conditionality. It concludes that benefit sanctions do little to improve people’s motivation to seek employment and drive negative personal, financial and health impacts. 

The research forms part of a wider body of evidence showing that the design features of the social security system are locking people into poverty and destitution. This major new study is a big contribution to the debate about sanctions and their impacts. But there are still some unanswered questions. 

As well as providing actual financial penalties for failure to comply with the conditions attached to benefits, sanctions are meant to act as a deterrent and a signal to others in the welfare system. Some would say that the effect of actual financial penalties from sanctions is less important in terms of the ultimate ends of helping people into employment than the threat of their imposition. 

A review by JRF of world-wide research on sanctions identifies a short-term effect of increasing the likelihood of getting a job and therefore reducing the length of unemployment. However, one study from Switzerland suggested that the quality of jobs that people get in a system with sanctions are on average poorer – lower paid and more insecure – meaning people land back on benefits again more quickly. This means that longer-term costs might outweigh the advantages of any short-term effects. 

But what can be done immediately to ensure that sanctions do not create destitution by design? In our strategy to solve UK poverty, we recommend two broad changes:  

  • Introduce a phased approach with a series of steps before financial sanctions are imposed. This should include warnings when people are likely to breach conditions rather than going straight to a financial sanction, with non-financial sanctions tried first, such as more frequent signing-on. 
  • Reduce financial penalties so people are not left destitute. For claimants of JSA, sanctioning can result in the complete withdrawal of benefits for 13 weeks or even up to three years. Most poorer households have no savings to fall back on in such situations. Sanctions, and the level of benefits in the first place, risk leaving people destitute. That’s not right. 

Although the rate of sanctions in JSA has fallen back in recent years, levels under Universal Credit currently look higher than under JSA. This means we need to keep a close eye on what happens in UC as it’s rolled out fully across the country, including the financial impacts. DWP should set out their own evidence about the effectiveness of sanctions to show that they are meeting the goals they have set. As the NAO concluded in 2016, “the overall impact of sanctions on wider public spending is unknown". Implementing reforms to prevent the problems caused by the current sanctions regime should be a priority.