Benefit Sanctioning

Paul Blomfield Excerpts

Tuesday 2nd December 2014 Westminster Hall

[Paul Blomfield (Sheffield Central) (Lab)]

It is a pleasure to introduce this debate under your chairmanship, Mr Howarth.

During the September recess I organised a community consultation across my constituency. With 63 meetings over three weeks, the consultation raised a wide range of issues. A dominant theme from some of my most vulnerable constituents, and from those in the voluntary, community and faith sector who work with them, was the impact of benefit sanctions. I cite the example of the Cathedral Archer Project, which works with the homeless. The project has been visited by Ministers and is held up as a model of good practice in taking people off the streets and getting them back into society by giving them skills and a home. The project’s work has been fundamentally changed by the response that some of its clients receive when they start—

[The Minister for Employment (Esther McVey)]

I had the same cough.

[Paul Blomfield]

I didn’t catch it from you, Minister.

Some of the project’s clients, in their first home, will suddenly receive a letter that they either cannot read or do not understand, and they will therefore miss an appointment and find themselves sanctioned, out of their home and back on the streets. They go to the jobcentre and are told, “Go along to the Cathedral Archer Project. They will feed you.” That transforms the role of an important local charity from making a strategic intervention to help people off the streets, into homes and into work to just being a crisis centre.

I am pleased to have secured this debate to raise such concerns directly and to make some practical proposals on how the Government can address the issue. Much of what I have to say is based on the work of Sheffield Citizens Advice, which is a great organisation that provides vital support to people across our city, finds solutions and supports people in complex situations. In doing so, it saves public money by averting crisis further down the line. In May, the organisation’s social policy group produced a report on the experience of jobseeker’s allowance sanctions based on the previous 12 months. I am pleased that the report’s author is in Westminster for today’s debate. The Department for Work and Pensions received a copy of the report when it was published, and it has been in correspondence with Sheffield Citizens Advice. I sent a further copy to the Minister before today’s debate so that we can properly consider its recommendations.

I must stress how helpful it is for such evidence to be gathered and presented so clearly by those working directly with the people affected by Government policy, with concrete recommendations about what can be done to improve the system. I hope the Minister will treat that work by people on the front line as seriously as it deserves to be treated. I make it absolutely clear at the outset that neither the report nor my contribution opposes the principle of sanctioning within the benefit system. Applying sanctions to those who are deliberately not seeking work, who are unavailable for work or who have no intention of working can disincentivise such behaviour and, in combination with the right support and training, can help people on the road to getting a job that provides not only an income but self-esteem, purpose, socialisation and accomplishment, but—and it is a very big but—any sanctioning regime has to be humane. The Sheffield Citizens Advice report clearly shows that there is an increasing number of incidents where the system is neither humane nor—this is important—serving its stated purpose of getting more people into work. In fact, the system is having the opposite effect in many cases.

Some of the stories outlined in the report will be all too familiar to hon. Members. I will briefly share the experiences of a couple of my constituents that are not detailed in the report. One constituent prefers to remain anonymous, so I will call her Mary. She was made redundant from a job as a cleaner, so she had to sign on for the first time in her life. She was told by an officer at the jobcentre that her next appointment with a job adviser would be on her signing-on day. She was told that there was no need to come in and sign on in the morning because she could do it when she came in for her 3 pm appointment. That information was wrong: the job adviser appointment was two days before Mary’s signing-on day. We all make mistakes, but it is simply and clearly not right that Mary, who had gone to the jobcentre for help to find a job, was punished for the officer’s mistake. It was an honest mistake, but it was a mistake, and she faced the consequences. Mary had to borrow money to get by, and I am pleased to say that she is now back in work with a cleaning job, but she got there despite the system, not because of it.

Mary understood what she needed to do, but she was wrongly advised. There are plenty of examples in the Sheffield Citizens Advice report of people who are not clear about what is expected of them:

“Alan was given a 4 week sanction for not actively seeking work. Because of his limited literacy/numeracy skills he had been enrolled for an 8 week course in English and Maths. He thought that as he was taking this course he did not need to complete his work search book for that period.”

That was an honest mistake. The report continues:

“Tony is in his mid 50s and is vulnerable because of his learning disabilities and dyslexia. He can’t read or write. Despite the fact that he gets significant support with looking for work from a local Job Club, he was sanctioned for not doing ‘enough’ jobseeking.”

Another constituent, coincidentally also called Tony, thinks he was sanctioned because the activity on his Universal Jobmatch account was considered too low by the jobcentre. I say that he thinks that was the reason for his being sanctioned because he has not yet been notified of the reasons for the sanctioning. Tony is eager to find employment and has completed an IT course through the jobcentre to help him find work online. He does not have access to a computer at home, so he spends much of the day at the central library waiting for his turn on the computer to show activity on Universal Jobmatch. That is in addition to going to workplaces in Sheffield looking for work, but he has been sanctioned. As a result of that sanctioning, he has been referred to the Salvation Army food bank in my constituency.

The question is whether sanctions are the right response to such situations, and not only because of their impact on people. Will they actually bring about the behavioural change that they purport to seek? Might the sanctions hinder, rather than help, the people who are affected?

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on obtaining this debate. The emphasis should be on how we root out those who are abusing the system. If the sanctions are harder on some people than on others, how do we get a mechanism that will root out those who are abusing the system by not turning up for appointments? When I speak to benefits centres in Northern Ireland, they tell me that a large number of people are abusing the system. How do we get a system that provides a level playing field for all?

[Paul Blomfield]

I understand the hon. Gentleman’s point. There are people who take advantage of any system, there are people who avoid their tax obligations, and so on. The point I am seeking to make is that if we design a system with the stated objective that he describes—supporting people back into work and taking sanctions against those who deliberately avoid it—we have to measure the effectiveness of the system against its stated objectives. My contention is that the operation of the system is failing that objective, so I ask myself why these seemingly illogical sanctioning decisions are being made.

Coincidentally, last Thursday I was out knocking on doors and meeting constituents, and I knocked on the door of a jobcentre worker. She described to me a range of issues that she faced in her daily work. I happened to mention that we were having this debate this morning, and she immediately responded by talking about the pressure that she and her colleagues felt they were being put under to impose sanctions.

That is a serious point. Indeed, in a survey of staff within the Department for Work and Pensions that was conducted by the Public and Commercial Services Union, 23% of union members surveyed said they had been given explicit targets for referring claimants for sanctions; 36% stated that they had been placed on a performance improvement plan for not making enough sanctions referrals; and 10% said that they had gone through poor performance procedures for not making enough sanctions referrals.

I know that the Government will say that there is no pressure to sanction, but the DWP acknowledges that statistics on sanctions are collated centrally and that local jobcentre managers will be contacted if their performance is out of line with that of other jobcentres. If this is a matter of good management, and no league tables are being compiled and no targets are being set, why is a lower level of sanctions seen as a sign of poor performance by a jobcentre manager?

Turning to how the situation can be improved, I start on a positive note. The Government’s independent review of jobseeker’s allowance sanctions carried out by Matthew Oakley was certainly a welcome step. Although its remit was limited—I will come on to that point shortly— it made some important suggestions about how communications and processes within the JSA sanctioning system can be improved.

I will not go into details, but a key point to take from that review is the lack of understanding between the claimant and the jobcentre. That chimes exactly with what Sheffield Citizens Advice is saying: too many claimants are not being adequately or appropriately informed of what is expected from them in the first place. They are not being informed about what they have done wrong when they have been sanctioned, and how to avoid the situation happening again.

The Sheffield Citizens Advice report chimes with the points that Matthew Oakley made. It says:

“A common experience is that they realise that no money has been paid into the bank first and then later get a letter stating that their benefits have been stopped.”

Will the Minister say what school of behavioural economics that sort of approach comes from? If a jobseeker does not understand the agreement that they have entered into, how does sanctioning achieve its aim, and how can sanctioning serve as a disincentive if a jobseeker does not know what behaviour triggers a sanction?

Perhaps Tony, whom I mentioned earlier and is mentioned in the report, was told that he needed to do more jobsearching, or perhaps he was sent a letter to that effect. That might be the case; I am not clear on that point. However, I know from talking to other constituents that such letters have led to sanctioning when they have not been responded to properly. The problem is that Tony cannot read; he has learning disabilities. He wants to work, but in that context the letter is meaningless, so what is the Minister doing to ensure that jobcentre staff are sensitive to such barriers—the barriers that claimants face in engaging with them? As I have said, it is positive that the DWP has responded to the Oakley review by setting up a specialist team to look at communications, but I would be grateful if the Minister updated us on the work of that team and outlined exactly what has changed as a result of its work. Will she also address some of the other recommendations in the report when she responds to the debate?

Many claimants tell Citizens Advice that they were not aware that they had been sanctioned until they contacted the jobcentre after finding out that they had no money in their bank account. Subsequent decision letters are often poorly worded, and without a clear explanation as to the misconduct that led to the imposition of sanctions. I urge the Minister to respond to the following proposals to address this issue: the wording of decision letters should be reviewed, so as to provide more detailed information about what led to the sanction, and to give information about the possible knock-on consequences of not responding to the decision letter; a sanction should not be put into effect until the decision letter notifying the claimant has been sent and a reasonable time for it to be delivered has passed; and notification letters should clearly inform the claimant of their right to challenge the sanction, explaining how to do so and, where appropriate, how to access hardship payments.

I say that because the Sheffield Citizens Advice report details how sanctions are often imposed because claimants failed to carry out agreed steps or activities even though many of them face barriers—through language, caring responsibilities or health problems—that mean they could not reasonably have carried out the agreed steps. That is an important point: they could not reasonably have been expected to respond. Other claimants do not understand what has been agreed and, according to the report, jobcentre staff are not aware of the genuine barriers that some claimants face.

I urge the Minister to respond to the following proposals to address this situation. First, jobcentres should make claimants aware that they have a say in the content of jobseekers’ agreements, and that this is a two-way process that should have claimants’ full engagement. It is supposed to be a partnership leading people into work. Claimants should be made aware that they have a right to have the agreement reviewed if they are not happy with the content.

Secondly, jobcentres should take whatever steps are necessary to be certain that all relevant factors that could possibly act as a barrier to work have been taken fully into account when deciding on the content of a jobseeker’s agreement. I have already cited some of the barriers that exist. Thirdly, jobcentre staff should be invited to awareness training about the practical and specific difficulties faced by some claimants; those difficulties may be learning disabilities, mental health issues or language barriers. I make this proposal because the Minister will agree that without workable, reasonable and well-understood agreements between jobcentres and claimants, the process is bound to fail, and if it fails it will clearly cause extraordinary hardship. I visited a food bank that I helped to establish in the heart of my constituency. The increase in the demand for its services is in significant part due to the increase in benefits sanctioning—the same is reported by other food banks across the city.

[Yvonne Fovargue (Makerfield) (Lab)]

I congratulate my hon. Friend on securing this debate. In my constituency, Compassion in Action provides a food bank that covers the whole of Wigan. The charity’s statistics show that 37% of the people who go there do so as a result of being sanctioned. One individual who had gone to the food bank had actually received training for a month with a guaranteed job at the end of it; he had found that job himself. His employer was willing to say to jobcentre staff that he needed the individual there every day that month, but the individual was sanctioned for that month and Compassion in Action kept him fed.

[Paul Blomfield]

I thank my hon. Friend for that intervention, which echoes many reports I have received from the food banks in my constituency. The desperate level of hardship that we are talking about needs to be understood in the House. We understand that food banks provide a weekly food parcel, but when I recently spoke to colleagues at the S2 Food Bank in Sheffield, they pointed out that they were now receiving demand for food parcels containing cold food that would not require heating as people did not have enough money not only for food but for basic fuel supplies. People are living in houses or flats illuminated by candles and eating cold food provided by food banks. That is desperate hardship.

[Steve Baker (Wycombe) (Con)]

I am deeply troubled by some of the substance of this debate. The hon. Gentleman will know that the Government argue that nobody should go without essentials as a result of a sanction, and that they should receive hardship payments. Can he imagine why the evidence on the ground that he is presenting falls so far short of the Government’s obvious intent?

[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.

[Dame Anne Begg (Aberdeen South) (Lab)]

Before my hon. Friend finishes, will he tell us whether the research found evidence of people having to resort to payday lenders or loan sharks to get over the immediate problem of a lack of cash? Did that then create problems for them further down the road because they had lost a lot of their ability to pay back those loans, even when they had been wrongly sanctioned?

[Paul Blomfield]

I thank my hon. Friend for that intervention and for the great work she has done as Chair of the Work and Pensions Committee, along with the other members of the Committee. She is right to highlight the link between benefits sanctioning and payday lending. As she will know, payday lending is a concern to me. With colleagues from all parties in the House, I introduced a private Member’s Bill on high-cost credit.

I have subsequently worked with colleagues on the all-party group on debt and personal finance to push the Financial Conduct Authority to introduce effective regulation of payday lenders, and I am delighted that we have made some progress on that. However, that is only part of the solution. We are dealing with the consequences of poverty—people resorting to payday lenders—but not the causes, and one of the most significant causes is benefit sanctioning. I am therefore pleased that my hon. Friend raised that point.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I apologise to my hon. Friend for being a little late. Is he aware of the evidence from Oxford university, which shows that one in four JSA claimants who are sanctioned leave JSA and that more than half of them do not get into work? Using sanctions to get people into employment has therefore proved ineffective.

[Paul Blomfield]

I was not aware of that research, so I am doubly grateful to my hon. Friend for her intervention. That makes the point powerfully that the sanctioning regime is failing to achieve its stated intention. Even leaving aside the hardships and all the consequences of sanctioning, we still need to look carefully at the issues I have raised because of the failure of sanctioning to meet its stated objectives.

So far, the Government have resisted calls from the Work and Pensions Committee, Citizens Advice and others for a full review of the sanctioning system. I have commended the work of the Oakley review, but that focused only on the practicalities of the current system. I understand the Select Committee is conducting its own inquiry, which I strongly welcome, and I am sure Citizens Advice and many others will engage fully with it.

Why, however, are the Government refusing to address one fundamental question: is the sanctioning system proving effective at getting people into work, which is its stated intention? Why is there no performance evaluation of the system against that criterion? There is no shame in that, whatever the answer—even if it is that, no, the system is not proving effective. However, we need to know the answer as policy makers; if we do not even ask, we are showing enormous contempt for the people whose lives are being dramatically affected. I hope the Minister will give us a commitment on that today.

[Several hon. Members]

rose—

--- Later in debate ---

[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.

[Paul Blomfield]

The Minister is making a wide- ranging contribution, but I am conscious that she is— unintentionally, I am sure—leaving herself insufficient time to answer my specific questions. Will she meet me and Sheffield Citizens Advice to talk about them in more detail?

[Esther McVey]

What I will do first, so that I do not run out of time, is to answer the hon. Gentleman’s questions. He referred to various people who did not want their names given but had reasons why they thought they should not have been sanctioned. In many cases, there will have been good reasons for the sanction, but I would like to know what happened to those people.

The claimant commitment is being rolled out to 900,000 people so that the adviser understands what support people need, what journey they need to go on and their individual circumstances, which might mean that they are more vulnerable than other people and need more exemptions or time off because they can work or search for jobs only within certain time frames. That was the point of the claimant commitment and personalising the approach, which we are doing now.

Oakley rightly raised communications, what we were doing and how we could refine the system further. We know what we have done; we have helped people into work. We know what we have done with the sanctions regime, but how do we make it better, which we need to do constantly?

Oakley made 17 recommendations, all of which we have accepted. They include reviewing letters to claimants to ensure that they understand what is going on; work with experts to ensure that communication is better; and work with local authorities to improve communication on housing benefits, to ensure that people do not have their housing benefit stopped unnecessarily, which can make things worse for people. Those recommendations were implemented immediately unless they required substantial changes to the Work programme, in which case they will be introduced as that programme changes.