Conditioned by Sanctions

by Ken Gibb

I have just read the new Joseph Rowntree Foundation Round-up ‘Welfare Sanctions and Conditionality in the UK’ by Beth Watts, Suzanne Fitzpatrick, Glen Bramley and David Watkins [1]. This draws on the ESRC Welfare Conditionality: Sanctions, Support and Behaviour Change research programme (based on a series of briefings related to that programme). This is an excellent summary of the breadth and depth of the issues, the evidence that exists on the perceived effects, impacts and mechanisms of different forms of conditionality and also includes a valuable discussion of the ethics of welfare sanctions and increased conditionality.

Welfare reform, broadly, has been a defining theme of the current UK Coalition Government’s programme. While much focus has been on the bedroom tax, the problematic introduction of the Universal Credit and the specific issues relating to disabled benefits, there has at the same time been an increasing use of conditionality and in particular a toughening of punitive sanctions regimes. This built on but also intensified the previous Government’s interest in conditionality and testing the water over sanctions (e.g. linking in theory if not practice the withdrawal of Housing Benefit following anti-social behaviour).

The briefings cover a range of topics: work-related benefits and job search, lone parents, work programme and associated incentives across a range of benefits, homelessness, social housing and anti-social behaviour orders.

While there are different forms of condition applied to welfare – the authors distinguish between conditions of category, circumstance and conduct (behaviour). It is the latter form of condition – expecting set behaviours from welfare recipients – that increasingly frames the changing nature of the welfare system. Sanctions can lead to the withdrawal of proportions of benefit (up to 100%) and for different periods of times, up to multiples of entire years.

What are the key trends? Sanctions are now much more widely used not just for out of work benefits (and widened to lone parents, the disabled and particularly the young), but also play a role in terms of social housing, the homeless and anti-social behaviour. Impacts appear to be particularly severe for under 25s and for the homeless. JSA claimant sanctions have grown from 2-2.5% per month during 2000-06, up to 3.5% in 2008, to 5% in 2010-11 and higher after 2011 to 6% in 2013, peaking at 7.3% in October of that year. Writers such as David Webster have pointed out that the uneven growth of the sanctions numbers has in part been due to the effects of the Work Programme on recipients. However, after 2012, sanctions associated with the WP also started to increase, too.

In the year following the introduction of the new tougher regime in October 2012, more than a million individual cases were referred for sanctions and more than half of these cases were penalised. Although much smaller in absolute terms, sanctions applied to ESA recipients have also grown rapidly in relative terms.

Statistical analysis, consistent with international evidence, suggests that the homeless especially those with complex needs, ethnic minorities, people with learning difficulties and particularly those under the age of 25 – were disproportionately affected by the new regime. There is also evidence of increased paperwork error and confusion and misunderstanding of recipients in terms of their exposure to the risk of sanctions as overall sanctions numbers have grown.

What is the evidence about behavioural mechanisms thought to be at the heart of the effects conditionality and sanctions have on recipients? US evidence suggests that such regimes do increase ‘exits’ from benefit receipt but do not lead to favourable long term outcomes in terms of income, children outcomes, quality of work (also found in Swiss research) or wider effects like crime rates. But importantly, there is not much in the way of convincing long term research and, moreover, UK evidence on sanctions and conditionality leading to sustainable employment is ‘sparse’. Dutch research also found that less severe sanctions could ease transition from welfare to work. Research from both sides of the Atlantic also suggested a low level of understanding of sanctions regimes on the part of those potentially affected by them. Several shorter term studies indicate significant levels of hardship, necessities foregone and even destitution concerning those affected. There is some international evidence suggesting that contracting models like the work programme can have positive employment effects but these are less effective the more difficult to reach and the further away from the labour market are recipients of such initiatives. Finally, UK evidence comparing JSA data with survey-based estimates of unemployment suggests that the sanctions regime may for some people be cutting benefits use without creating consequent employment in the UK.

What are the ethical issues underpinning this shift to tougher sanctions? The round-up includes a fascinating discussion of the different arguments for and against conditionality and sanctions. One contractualist school of thought is that it is about reciprocity and communitarianism – a perspective on social justice closely allied to minimising free riding. A different argument for the regime in principle connects to utilitarianism relating to economic notions of maximising welfare for finite resources and focusing on cost to society. There are also paternalistic arguments suggesting that short run pain is worth it for recipients in the long run by taking them off benefit dependence.

Those opposed to the sanctions turn often start from an unconditional model of social citizenship which is incompatible with the sanctions squeeze and contractual rights and responsibilities models. They also point to empirical arguments challenging assumptions about behavioural mechanisms and responses, as suggested by the evidence reported above. They point to the other forces and factors that contribute to benefit dependence and critically the blunt fact that jobs do not necessarily allow people to escape poverty – witness both the alarming evidence that post sanction some people are disconnecting from the labour market altogether but also the large growth of in-work poverty and continuing reliance for many low income workers on benefits.

What are the main things that strike me reading and reflecting on this research evidence round-up?

  • The moral tenor is unavoidable and it is hard to support the way sanctions impact on dependents (children but also other family members who are otherwise vulnerable and affected by the knock-on effects of benefit cuts). The idea that the long term effects of these policies are relatively un-evidenced is problematic in a context where effects seem to lead to higher levels of destitution for some and wider exclusion from both work and benefits for others.
  • Utilitarianism supports punishment via its deterrent effects and this can be cynical in its intention. It may be that its proponents do not mind that those caught up in the sanctions trap do not understand the risks they face provided they contribute to scaring other people to change their behaviour.
  • The numbers and their growth are frightening and one cannot but conclude that the fear and stresses created by this form of conditionality must further worsen mental health and related conditions for the poor as well as helping to encourage further the in work poverty of low wages.
  • The dysfunctional relationship between benefits and low wages, and the difficulty making progress in terms of work and pay over time, are fundamental drivers of the labour market context operating at this critical margin. We need more research to better understand this part of the jobs market and what makes it tick.
  • However, and maybe it is the economist in me but not all incentives or nudges are bad. We must not tar all innovative and creative policies in this space (e.g. pension opt-outs, etc. or, albeit paternalistic, policies to encourage better diet). Let’s not throw out the baby with the bathwater.
  • Read this synthesis and the individual briefing papers. This is really important stuff that we should all be aware of.