The government has been urged to reform universal borrowing sanctions after a long-awaited report found they prevent people from finding jobs and making more money.
The Department of Labor and Pensions was forced to release an internal study on how effective sweeping sanctions on borrowing are in getting people to work after ministers initially refused to release them.
The assessment was carried out in response to a warning from a group of MPs that the sanctions had a dubious effect on improving performance while at the same time affecting the health and well-being of the plaintiffs and driving them into impoverishment.
The results showed that sanctions that reduce unemployment benefits if a person does not meet job search requirements do not actually improve their employment outcomes.
The Government argued that it had not taken into account the deterrent effect of the existing system.
The Institute for Fiscal Studies (IFS) warned that the survey “needs to be treated with caution” and warned that the government did not have enough data to draw a firm conclusion.
But Labor said the results “show how the Tories are failing to find decent, well-paid jobs for people.”
And the Joseph Rowntree Charitable Foundation (JRF) said the government should pass sanctions “inefficiently” and push people “into misery.”
“No excuse can change the fact that sanctions are ineffective. The persistence of the UK government in trying to deduce and deduce this fact is a show of disrespect for the people trapped in this penitentiary system,” said Rachel Casey, political adviser to JRF:
“Today’s report, which the government hasn’t released for five years, shows that when people face sanctions, it has a negative financial impact – it leads to poverty. They take longer to find work, and those who find work after the sanctions earn less than those who are not.
“How many more people will have to endure the emotional and physical damage from this policy before the government admits that it doesn’t work?”
This report was prepared in 2019 in response to questions from the Operations and Preparedness Committee about whether sanctions are actually having a positive effect.
In a 2018 report by the Commission on Labor and Pensions, deputies warned that “sanctions can have a very negative impact on people’s physical and mental health.” The commission asked the government to review their effectiveness, saying: “At best, the evidence on the effectiveness of the sanctions is mixed, and at worst, they seem counterproductive.”
The commission stated at the time: “It is a completely different matter when a sanction affects the physical and mental well-being of a person, drives him into debt and pushes him to the brink of poverty. We agree that research to understand the impact of sanctions will be difficult, but we disagree that this is a reason for the DWP not to try.”
The DWP initially said it would make the study public, but this was later blocked by former Labor and Pensions Minister Teresa Coffey, who said it was being withheld from the public because it contained “sensitive” details. This was rejected by the Information Commissioner, who ordered the government to make the assessment public.
The report examined the impact of sanctions on how long a candidate stays in a universal credit or intensive job search program, as well as the impact on their subsequent earnings.
He concluded that the sanctions are slowing down the rate at which people are turning away from universal credit in favor of higher-paying jobs. People with children suffer the most from sanctions because they are slower to find work.
And sanctioned candidates earn an average of £34 a month less over a six-month period than non-sanctioned applicants because they move into lower paying jobs.
Sanctioned applicants under the age of 26 fared even worse, earning £43 less per month than non-sanctioned applicants, the report said.
“Essentially, the sanction reduces the likelihood that the average applicant will exit PAYE and earn less when they exit,” the report says. “In a narrower sense, this is the negative impact of the sanction on the plaintiff’s finances.
“However, this precludes a wider role for the sanction, which is meant to incentivize compliance with a conditionality regime that encourages job seeking and income growth.
“Therefore, the reported negative financial effect must be weighed against the likely positive deterrent effect that the sanctions regime would have in encouraging applicants to participate, an effect that all applicants would experience under the conditions, whether they were sanctioned or not. .
“This is particularly relevant given the decline in sanctions levels, which were above 6 percent in August 2017 but have fallen below 3 percent since August 2018, meaning that the percentage of applicants who are affected by the impacts outlined in this report is relatively low. . .
“Indeed, the political goal of sanctions policy is not to punish plaintiffs, but to encourage plaintiffs to comply with their demands by holding them accountable when they don’t.”
Tom Waters, Deputy Director of IFS, said: “The DWP has been reluctant to release an internal review of the sanctions regime. Analysis shows that sanctions reduce the likelihood that beneficiaries will return to work.
However, this result should be treated with caution. The data and methods available to the DWP were probably insufficient to answer this question.”
He added: “It’s good that the DWP is trying to evaluate its policies, but it’s important to make a real effort to make such assessments reliable. In fact, the publication of this report told us little about the effectiveness of the sanctions regime.”
Shadow Secretary of State for Labor and Pensions Jonathan Ashworth said: “While it is true that job-search benefits are conditional, it is not surprising that the Tories oppose the publication of this analysis. This shows how the Tories cannot find decent, well-paid jobs for people.
“Labor’s welfare reforms will give people a stepping stone to quality work, not leave people out of work.”
JRF’s Ms Casey said: “This work was done before the cost of living crisis, so it’s worrying to think how severe the impact of the sanctions will be as the prices of food and other welfare assets soar.
“The government should spend less time defending the status quo and more time thinking deeply about how to make the necessary changes to the sanctions regime, in addition to improving the adequacy of universal credit.”
Source: I News
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