Sanctions linked to drop in unemployment benefit but few return to work

The government’s imposition of sanctions on Jobseeker’s Allowance claimants has led to a significant rise in people leaving unemployment benefits, but they are not returning to work, according to researchers at the University of Oxford and the London School of Hygiene & Tropical Medicine. Sanctions are used to punish claimants who do not meet government conditions for actively seeking work and result in claimants having their benefit payments cut for a minimum of four weeks.

The senior author of the new working paper, Professor David Stuckler from Oxford, will appear as an expert witness before the Work and Pensions Committee today. He will brief MPs on the destinations of benefit claimants who receive sanctions.

Since 1996, successive governments have placed conditions on those receiving unemployment benefits. Starting in 2011, the UK Coalition Government introduced a series of reforms, increasing the conditions and penalties for failing to meet them. The study, based on official monthly and quarterly data from databases covering UK local authorities between 2005 and 2014, tracks the numbers claiming unemployment benefit, comparing them with rates of employment and the prevalence of sanctions.

Between June 2011 and March 2014, the official data shows over 1.9 million sanctions were imposed on people receiving Jobseeker’s Allowance. The researchers’ analysis found there was a 40% increase in the rate of people being sanctioned after June 2011 compared with the previous seven years (which also covers years before the reforms came in). The research also shows that after 2011, an estimated 43% of people who received sanctions went on to leave the JSA altogether. The researchers also looked at Job Centre Plus records of the reasons given by former JSA recipients for no longer claiming JSA. These responses were grouped into ‘finding employment’, ‘unknown destinations’ and ‘other reasons’. Fewer than 20% of this group of people who were no longer in receipt of JSA were recorded as finding employment. Strikingly, 80% of respondents left for other or unspecified reasons, says the study.

Study author Dr Rachel Loopstra, from the University of Oxford, said: ‘The data did not give us the full picture of why sanctioned people have stopped claiming unemployment benefit. We can say, however, that there was a large rise in the number of people leaving JSA for reasons that were not linked to employment in association with sanctioning. On this basis, it appears that the punitive use of sanctions is driving people away from social support.’

Professor Stuckler said: ‘Sanctions do not appear to help people return to work. There is a real concern that sanctioned persons are disappearing from view.’

Coauthor Professor Martin McKee, from the London School of Hygiene & Tropical Medicine, added: ‘ There is a need for a cost-benefit analysis of sanctioning, looking at it not just in narrow terms of unemployment benefit, but also the bigger picture, focusing on  employment, health, and other social costs. Such a review would look at whether those no longer in receipt of benefits now rely on other forms of welfare support, which could lead to potentially hidden, spill-over costs.’

He added: ‘The Coalition government has embarked upon an unprecedented experiment to reform social security. I hope policy makers will be informed by these findings and see the value of investigating the consequences.’ The study shows widespread variation in how local authorities used sanctions. In Derby, Preston, Chorley and Southampton, researchers found particularly high rates of people being referred for sanctions. In some months, over 10% of claimants living in these areas were sanctioned – the highest rates nationwide.

For more information, contact the University of Oxford News Office at [email protected] or telephone: 01865 280534.