Okay, folks. The convener has sent a message to say that unfortunately he is not going to be able to make it to the meeting at all, so you are stuck with me for the entire session today.
We come to agenda item 3, which is evidence on benefit sanctions from the Department for Work and Pensions. In February, the committee issued an invitation to the Minister of State for Employment to provide formal evidence on benefit sanctions at today’s meeting. I speak for almost all the committee when I say that we are very disappointed that Esther McVey has declined that invitation. The committee hopes, however, to confirm arrangements for an informal meeting with the minister before the summer recess.
Formal evidence from the DWP is a vital part of our scrutiny of benefit sanctions, so we have accepted the offer that a senior official attend to provide evidence today. On that basis I welcome Neil Couling, who is work services director at the DWP. I understand that you have an opening statement. Is that correct?
Deputy convener, I thought that I might pick up on a few things that were said in your previous evidence hearing and draw the committee’s attention to the memorandum that the department has submitted. For reasons that are outside my control, I think that it came to your clerk a bit late. It left my office on time, so we are investigating why the memorandum was late. I apologise to everybody for that.
As Jamie Livingstone was summing up in his last comments, I was thinking just how much the DWP agrees with him. Clearly, we need to tackle poverty, but one of the most effective ways of tackling poverty is to get people into jobs. The committee has heard a lot of evidence that suggests that the regime is not working—or is pointless, as some of your contributors have said—but actually the regime is not out of line with what other countries do. The UK has a strong reputation for its ability to implement policies such as those that we are delivering, with some great results. You are seeing employment rising in Scotland, unemployment falling and the number of people on workless benefits falling. We think that the policy mix and operational delivery on the ground—by our people in jobcentres, who do a fantastic job day in, day out—is achieving those positive outcomes for Scotland.
I do not know whether members have had a chance to read the memorandum, but it tries to put the academic case for what we are doing, and to give you a real evidence base—rather than the anecdotes that you have been hearing—about why other countries adopt active benefit regimes, why the UK has such an approach and the successes that flow from that.
Thank you.
In your memorandum you say:
“It is a mistake to see sanctions as a punitive measure”.
Do you think that benefit recipients see it that way?
I do not know. My experience is that many benefit recipients welcome the jolt that a sanction can give them. Indeed, I have evidence—which I can share with the committee if members want it—of some very positive outcomes from just those kinds of tough conversations. They are tough conversations to have on the jobcentre side, as well as for the claimants.
Some people no doubt react very badly to being sanctioned—we see some very strong reactions—but others recognise that it is the wake-up call that they needed, and it helps them get back into work.
11:30
So, jobcentres across the country have been inundated with thank you cards from people who have received sanctions.
Yes—that is not so remarkable.
It is certainly a surprise to me; I do not know about my colleagues.
In your memorandum, you mention that
“some jobseekers do not respond as positively”
and you say:
“Psychologically they withdraw into dependency and denial. Attitudes abound such as ‘there are no jobs’, ‘I don’t have the skills’ ‘I am happy on benefits’ are a defensive psychological response brought on by the unsettling circumstances.”
I am just wondering who, with a degree in psychology, came up with that assessment.
We have done an awful lot of work academically, and we also employ psychologists in our jobcentres. Moral judgments are often made about people’s motivations, but I have never made any myself. We hear language about people being “feckless”, “scroungers” and the like, but that is not the language that the Department for Work and Pensions uses. Becoming unemployed can be a traumatic thing to happen in somebody’s life. People respond to that trauma in different ways. Some people remain positive, as I mentioned in the memorandum; some people withdraw.
The system cannot just rely on one approach or two approaches; it needs to be multifaceted. We need to adopt different approaches, and that is what advisers in jobcentres are doing. Sanctions are part of that, but they are not the only thing that our jobcentres are doing. The impression that you might be left with from some of the evidence that you have heard is that all that jobcentres are doing is applying sanctions. That is not the case.
The memorandum contains an attitudinal group analysis, at paragraph 10. It shows how people actually respond and how active they are in their job searches. Only a small minority of people—less than one fifth—are actively seeking work. In order to get a job, people have to be looking for one. The system tries to calibrate a set of responses that will move more people into that group. That is why we have been having success over the past few years in terms of falls in the numbers of people on benefit and falling unemployment. It is because we are managing to encourage, support and move people through the different attitudinal groups into the “determined seekers” group. That is the essence of the policy.
At our last session on sanctions, Bill Scott from Inclusion Scotland, which works with disabled people, informed us that, in his understanding, the DWP and Jobcentre Plus were operating a system whereby a certain proportion of people going through the system had to be sanctioned—a quota, in essence. Is that true?
That is absolute nonsense.
Is it absolute nonsense?
It is absolute nonsense. Through one of the footnotes to the memorandum, it is possible to access the report on the matter that I did last year for the secretary of state, and which we published. I am sure that the clerk can do that for you. There was a set of benchmarks running until 2011. Ironically, it was the coalition Government that got rid of the benchmarks in 2011. It did so because targets being set in that area will prompt in jobcentre staff behavioural responses that we do not want.
My report pulls no punches about this: there have been isolated examples in which jobcentres have misunderstood the instructions and have put local targets in place. Where we have found that to be the case, we have taken quick action to remind them of our policy and of what we want them to do.
What was the instruction that was misunderstood?
I will tell you a little story. Jobcentre Plus is a target-focused organisation, which is one of the reasons why it is so successful. As you will see from the sanctions data, when the benchmarks were removed in 2011, many people came to the erroneous conclusion that because senior managers had got rid of the benchmarks, they did not want jobcentres to sanction people any more, so there was a drop-off in the sanctions total. When we communicated the fact that that was not the case, and that we wanted staff to sanction people appropriately, a number of people responded by putting in local targets. That reinforced the notion that it was not possible to do anything in Jobcentre Plus without targets being attached. That is not the case, but that was the simplistic way in which some people thought about it.
That is set out in my report, which is not a long report, so I hope that you will not be bored reading it.
You are saying that the DWP is target driven, but can you tell us categorically that it does not have a target in terms of—
Jobcentre Plus is a very target-driven organisation. For example—
You can categorically tell us that you are not driving a target to have a set proportion of people going through the system who have to be sanctioned.
Yes—exactly. Targets can lead to perverse behaviours. Whenever we set a target, we must be alive to risks of that sort. In terms of sanctions, we think that a set of targets would drive perverse behaviours. We want people to be sanctioned appropriately; that is part of the system. The outcome that we are seeking is not to have more people being sanctioned; getting more people into work is what we are about.
You say that you do not want more people being sanctioned as an outcome, but the number of people who are being sanctioned now is higher than it was previously, is it not?
The number is higher. As to whether that is a trend, we must wait for the next set of data so that we can understand that.
The committee also needs to understand that we have increased the amount of contact with claimants. The chances of a person’s being sanctioned are going up simply because the number of interactions with people is going up; for example, we now pull in young people once a week, as opposed to once every two weeks.
Yesterday, we announced the start of the help to work scheme. That includes a daily intervention regime for a number of people who have been unemployed for three years plus. The chances of having a sanction in the course of interaction with the state organisation are going up, so there might well be an increase in the numbers. However, that is not an outcome that we are driving towards.
Okay. I have spoken too long for a man with tonsillitis, so I call Alex Johnstone.
I am going to speak for as long as I can for a man sitting next to a man with tonsillitis.
The use of sanctions is controversial, of course. Could you briefly outline why sanctions are used, their effectiveness and the cause-and-effect relationship in use of sanctions?
The system has always had some form of contract for the person who is claiming benefits on receipt of those benefits. It is no surprise that the last two Governments have both spoken about new contracts in their approaches to welfare reform; the previous Labour Government did so, and the present coalition Government does it.
The reason for a sanction is that, where there is a responsibility on a claimant to do something, there has to be a consequence of not doing the thing that they are being asked to do. In essence, if we were to get rid of sanctions, as I heard some contributors suggest in evidence, it would mean our having to get rid of any conditions on benefit. Otherwise, the conditions would be essentially toothless. We want to ensure that the sanction drives the right behaviour. We are looking to have people engage with the system, rather than their being disengaged from it. It is a careful balance.
Rather than my organisation being sanction happy, the chances are that someone going into a jobcentre and observing what was going on there would see many more cases that advisers could sanction not being sanctioned, because advisers are using their common sense and intelligence to make judgments about who is actively engaging and who is not, and who needs to be reminded of their responsibilities.
We are doing hundreds of thousands of interventions a week in about 700 jobcentres across the country. We are bound to get some judgments wrong, but in general the DWP is not an organisation that is chasing sanctions, despite what the committee has been told. That they should chase sanctions is certainly not the message that I am giving out to the 30,000 people across Great Britain who are doing this work, and whom I lead.
I am sure that very few people regard being sanctioned as a positive thing. What proportion of the people who have received a sanction experience a positive outcome as a result?
Another way of thinking about the issue is to consider how many people are sanctioned for a second time. Typically, 80 per cent of the people on intermediate sanctions, for example, receive only one sanction. When people are coming round two or three times, I ask my advisers and work coaches to look carefully at what is going on. Why are those people not engaging positively with the help that we can offer in getting them into work?
The jobseekers allowance regime is a phenomenally successful policy intervention for getting people jobs. Some three-quarters of people who claim JSA have left the benefit after six months. The approach is copied in a number of countries across the world because it is such a successful intervention. We know that getting someone to comply with the system is the best route to getting them a job.
We have talked to people about the system and one group gives us cause for concern: people who have rather disorganised or chaotic lifestyles seem to be more likely to experience sanctions, which appear to be less likely to have a positive effect on such individuals. The statistics show that it tends to be young men who are in that category. Is that your experience? Is there specific support for that group? Are you making specific efforts to deal with people who seem to fall out of the system?
I think that it was Mark Ballard in your previous panel who talked about homeless people—I cannot recall whether he was talking about young men. His view is that sanctions are never appropriate; I am probably half way towards his position, in that it is clear that we need to understand, from the jobcentre perspective, what drives non-compliant behaviour.
I have witnessed really good work at my Gateshead jobcentre with the local Cyrenians—the charity that is responsible for some homeless hostels. Staff have gone in and explained to the hostel workers what is going wrong with young people’s job searches and how we can help people not to be sanctioned. That does not mean that we do not sanction people, because even after all that effort and explanation there are people who do not comply and do not want to engage with the system.
However, I agree with your suggestion that there are cases in which just piling in with a sanction is not the appropriate response. That is why we ask work coaches and advisers to use their judgment. Again, there will be instances in which we get that wrong, but there will also be instances in which there is a great intervention. When I visited Gateshead and met some of the young people there, one of the most pleasing things was that we had got people not just resettled in properties in the community, outside the hostels, but into jobs, and their lives were on the heal because of that.
This is not something that we can direct from a central chair; I cannot say, “This is absolutely what you must do in those circumstances.” We have to empower work coaches to make the right decisions and to make judgments about what is going on, and that is what we try to do. For example, I recently went out to talk to homeless charities through Homeless Link. We are doing the same thing locally right across the country, so that we review our relationships, with a particular emphasis on where we are with sanctions, because the rub points are quite hard and we need to take particular care with people who are in the group that Alex Johnstone asked about.
11:45
Mr Couling, a variety of people—you heard some of them today—have told us that the sanctions regime is a major driver of the growth of food banks. Do you agree?
No. I have been thinking about how, if you asked me that question, I might help the committee to understand a bit more about the growth of food banks and what is going on there. I thought that the end of your previous discussion was interesting: people were speculating about how to stop the growth of food banks, when the Trussell Trust’s objective is to put a food bank in every town in Great Britain—that has been the trust’s stated objective since 2004.
It is interesting to consider whether we are witnessing demand-led growth or supply-led growth. I can share with you two bits of evidence that suggest that growth is to do with supply and not demand. First, the Trussell Trust produced figures a couple of weeks ago and said that a million people had used food banks in the past year. The trust reckons that it accounts for about a third of the food bank sector, so if we gross the figure up to 3 million and work out weekly usage we get to about 60,000 people a week—that is with a generous grossing up.
In Canada, where the population is half that of the United Kingdom, at 32 million, the weekly use of food banks is not 60,000 but 700,000. In Germany, Deutsche Tafel, which is the equivalent of the Trussell Trust, reckons that in 2009 it helped a million Germans a week—not 60,000 but a million—and its most recent figure is 1.5 million. Germany is not some kind of welfare wasteland, where no help is available. That makes me think that supply is what is driving the growth. Why would poor people respond in a different way from rich people to incentives and things that they can claim or get?
The second piece of evidence on which I draw is the experience of the social fund in 2006. The previous Labour Government did four things: it reduced the rate of repayment; it extended the time over which people could repay their social fund loan; it increased the amount of money that people could borrow; and it made the fund much more accessible, by enabling individuals to access it by telephone, which took away the face-to-face challenge that used to go on in jobcentres.
In the space of three years, the number of applications for crisis loans trebled. It is ironic that, at the time, the Conservative and Liberal Democrat Opposition said that that was evidence of greater welfare problems and more crises. It was not; what we had done was expand a service for people who have not got very much money, and—surprise, surprise—they applied for it.
That is why, in my view, it is supply-led growth that is going on, which will continue over the years ahead, whatever the path of welfare policies. We live in a society in which we have poor people and rich people, and people will maximise their economic choices. That is just how economies work.
Dr Filip Sosenko, from Heriot-Watt University, told the committee that the growth is demand led, not supply led. He said that the evidence for that is robust and reliable and that welfare reform is a major factor—
He should look at Germany, should he not?
He said that welfare reform is a major factor in fuelling the demand for food aid, and a variety of people who work with folk on the ground have told us that people who come in cite sanctions and other welfare reform matters as factors. Are all those people, including Dr Filip Sosenko, wrong?
They should look at Germany and try to understand what is behind growth there. I think—
With respect, they have looked not at Germany but at what is happening on the ground here in Scotland and across the rest of the United Kingdom, and that is what they have found.
Indeed, and people will tell you things in order to maximise their economic choices. In the same way as people will tell you, “I am looking for work”, because they know that if they say that they are not doing so there will be consequences and they will get sanctioned, people will tell you things when they present to food banks. It might not be wilful deceit that is going on; it might well be their belief about the situation. Then, the food banks will record that and it will be presented back as a fact. However, that does not establish a causal link. The supply argument is a much stronger argument. Academics are not exploring the supply argument though; they are looking at what people are reporting in food banks and citing that as evidence. That does not make it right; it is just what they are doing.
I am bound to say that I find that a very unconvincing argument indeed.
I would go so far as to say that it is complete and utter nonsense.
You just need not engage with it, then; you can just say that it is complete and utter nonsense and not engage with the argument.
I would suggest that you go and speak to folk at food banks, as I have done—the workers, the volunteers and those folks who are presenting themselves, who without doubt are facing major difficulties in their life, often due to sanctioning.
Let us move away from that and look at some of the figures.
So, let us ignore what I have said, shall we?
Mr Couling, we are here to question you, sir.
Hold on. We will have the questions, then the answers. Finish your question, Kevin.
There has been a 209 per cent increase in the number of benefit sanctions since 2006. The number of cases in which a decision to sanction somebody’s benefits was made has more than tripled, from 25,953 in 2006 to 80,305 in 2013. In that time, the single largest increase took place between 2012 and 2013, when there was an increase of 15,463 benefit sanctions in a single year. In your paper, you say that you are looking for
“‘tough’ rather than co-operative attitudes of caseworkers”.
Is that the reason why there has been such a massive increase in such a short period of time?
I do not agree that there has been “such a massive increase” in the way that you set it out.
It is 209 per cent.
It is not a 209 per cent increase.
Those are House of Commons figures, Mr Couling. Are they wrong?
Yes they are—in that sense. The first thing you have to do is look at the number of people on benefits. You cannot just use a figure from 2006—of what unemployment was in 2006—and then compare it with today. It is a ridiculous calculation to make, to be quite honest.
So the calculation from the House of Commons library is “ridiculous”.
Can I ask you about the
“‘tough’ rather than co-operative attitudes of caseworkers”?
Is that attitude leading to more sanctioning? Where does understanding come into play when it comes to your caseworkers?
The international evidence, which I cited as an example in paragraph 3 of the memorandum, is clear. We are trying to walk a difficult path between showing understanding and being co-operative and making some challenge. In some locations, it is true that our folk—and I have witnessed them being quite open and honest about this—have not been applying the regime, and so when they started applying it, at first the claimants remarked, “What are you doing? We have never done this before”—that was the case with one claimant I met, because I was part of the interview. However, the results from that were positive and more people were getting jobs as a consequence. So, we are doing both.
Let us look at that regime and at cases that I know of from my constituency. Like many others round the table, my office is inundated with folk coming to me to help them, often in tragic situations. I refer to a case that I was handed this morning. It involves a man who has mental health problems and who has previously had addiction problems. At one point, he produced a sick line to Triage Central and was told that it was still mandatory to attend work-related activity, despite his having submitted a sick line, and he was sanctioned for that. The sanction was eventually lifted after a caseworker from the Seaton recovery project intervened. What do you have to say about that kind of situation, Mr Couling?
It does not sound as if there was a correct application of the sanction process in that case.
It seems to me that there are a lot of incorrect applications of the process.
You might say that, but when members of the Scottish Parliament, as well as MPs, write to the secretary of state about individual constituency cases, I often have to write back. I have started citing what has gone on in the case in my response to MSPs and MPs and, funnily enough, I have not had one subsequent response back from them.
Where we make a mistake, I am quite happy to admit that and to put the case right, and if necessary we will pay compensation to the individual. However, there are also a number of people who will present their case in your constituency surgeries and tell you that something has gone on, but from whom you might get not the full facts of the case, just a partial representation.
Triage said that, despite the fact that a sick line had been submitted, it was still mandatory to attend work-related activity. That would be wrong.
A sick line? I do not understand that.
A doctor’s note saying that somebody was unfit to attend.
It would depend on what their condition was. You would have to ask. For example, if it was just a repetition of the medical condition that they had expressed in the work capability assessment, there is a chance that the interviewer would say, “We know that you have that medical condition, but we still want you to attend for the kind of help that we are offering you here.” Or it could be that the person had contracted tonsillitis or something, and was therefore not well enough to attend.
So we are now—
I do not know enough about the case to tell you whether it is right or wrong.
We are in a situation where, if somebody presents a note from their doctor saying that they are unfit, Triage will not necessarily take that as being the case.
I thought that you might ask me about the danger in the system that people who move from employment support allowance, if they are found capable of work after a work capability assessment, might then present at a jobcentre bringing medical evidence and saying, “I’m not well enough. I should be on ESA.” There can be quite a nasty feedback loop around that if we are not careful, so I wondered if you were going to ask me about that, because—
I am not asking you about that. I am asking you about a situation in which it seems that doctors’ medical advice is being ignored.
If I could move on with the same case, convener—
Was that a question, that last bit, or was it a statement?
It was a statement.
Okay. That is good—
When the man—
I should just note that I do not agree with you there.
Convener?
I would rather that we spoke one at a time.
Thank you very much.
Later on, the same gentleman received a call from a Triage office saying that he had to be available to take a phone call at a said time. He phoned the Triage office and was told that they were running late and would call soon, but nobody called. That was on a Friday. The man phoned and got an answering machine over the course of the weekend.
The gentleman was extremely concerned that he was going to be sanctioned again. As I said, he has mental health problems. On the Sunday afternoon, very worried, he phoned Police Scotland and was admitted to the Royal Cornhill hospital, where he spent two weeks at God knows what cost to the public purse. Is that the tough rather than co-operative regime that you want? Is it a case of cost shunting and creating even more crises in people’s lives?
I do not think that it is a case of cost shunting; it sounds like a case of failing to phone back the person as we promised.
12:00
And how often are such failures taking place, Mr Couling? How often are people forced to take drastic action because of failures in the system?
The current requirement is to phone back claimants within three hours. We are not hitting 100 per cent at the moment, but in 96 per cent of cases, we are meeting the three-hour call-back target.
You talked about compensation earlier. How much compensation has there been in the past year to folks who have been sanctioned against all the rules that you have in place?
I do not have that figure to hand but I am happy to provide it to the committee.
That would be extremely useful. Monetary compensation is one thing, but how do we compensate those folks who are put through the mill and end up in situations like that of the gentleman whom I described, who had to spend two weeks of his time in a mental health unit after failures in the system?
Clearly, that sounds like a terribly regrettable case.
There are many such cases in my office and I could go on, but I will give others the opportunity to come in.
Alex, do you want to come back in?
I will wait until later.
I have a comment. After I have answered questions, there have been further comments and I have not been allowed to answer back, so I just want to say one thing. Clearly, I personally regret any case in which we get it wrong, but it is a mistake to infer a general view of the system and of the efficacy of a sanctions regime from the cases in which we get it wrong. That is a bit like talking only to victims of domestic fire to get an understanding of how effective the fire prevention policy is.
I will put my hand up and say that the case that was described should not have happened. However, from my perspective, such examples should not then lead to the conclusion that everything is wrong with the system, because that is not the case. As the memorandum shows, the sanctions regime and our overall approach to an active benefits regime are having positive impacts on rising employment, falling unemployment and falling numbers of people on benefits. I do not want the committee to lose sight of that point because it is really important in relation to our system design.
Mr Couling, I do not want to stop you from saying whatever you want to say—you are here to give evidence. If it seemed as though I was trying to stop you, I apologise. If you want to raise any point at any stage, I assure you that you are able to do so.
Mr Couling, you have made a number of positive claims for the effects that the sanctions are having on getting people back into the workforce and into the job market. Do you agree that the sanctions regime also has negative impacts and repercussions?
Can you give an example of what you consider to be a negative impact?
In today’s context, there is the increased use of food banks. Have the sanctions had any role in that whatsoever?
If somebody is sanctioned, they will have no benefit income for the period of the sanction unless they claim for hardship, so those individuals will present to food banks. In fact, there have been sanctions in the benefits system since it started. Is that a negative outcome? Clearly, when somebody has been sanctioned, it is a failure of the system. We have failed, in one sense, as well as the individuals who have put themselves in that circumstance. Whether that is a negative connotation, I do not know—it depends on how you define negative.
Earlier, the deputy convener asked about the rise in the use of food banks. We were talking about supply and demand. You talked about examples from Germany and Canada. We could also point to America and other places. Is it the Government’s intention for food banks to be institutionalised in this country? That is clearly a different approach to food banks.
The Department for Work and Pensions has said—I will paraphrase it a bit—that the growth in food banks is nothing to do with us. As somebody has pointed out, they are a community-led response. We support food banks to the extent that we signpost people to them from jobcentres, but the Government does not have a policy on the growth or otherwise of food banks.
We are looking at food banks as well as welfare reforms generally. You talked about the States. Food banks are an integral part of the approach to welfare there, whereas we have never taken such an approach in our country. Food banks have always been there as a charitable response from the community, but they have not been part of our welfare system. I am not sure whether you answer for the Government, but is the Government not even concerned that we are developing a system in which food banks are an integral part of welfare rather than just a charitable response?
I do not think that it has been proved that food banks are an integral part of the welfare system. They are responding to a desire of people to contribute to them—they are a charitable establishment in the main, although the Scottish Government has given them some funding.
Food banks are outside the Government and state sphere. General UK Government policy is to applaud voluntary and community action. For the Trussell Trust, food banks started as an evangelical device to get religious groups in touch with their local communities. As far as I know, the Government has no policy on evangelism.
You have justified sanctions in terms of employment and unemployment, but the welfare state is about far more than just employment and unemployment—it is about supporting people in their time of need. If people are sanctioned and left with very little or nothing, they will have to find something. In some ways, that is a breakdown of the welfare system. It might not be proof that sanctions are not working, but it is a fundamental breakdown—a big hole in the net of welfare.
I tried to say in response to Mr Johnstone’s questions that, if the system’s design put a premium on providing support in every circumstance, it would not include sanctions. We have a system of sanctions in the UK because popular support for the welfare system rests on there being responsibilities as well as rights. Challenging the individuals concerned about their job search activity has a positive effect for them, as it returns a lot of people to a path of proper job seeking, with a job at the end of that.
That is why we have sanctions. If that is accepted, it is in the nature of a sanction that not meeting responsibilities will have some kind of implication. There is no easy design way around that. If people buy into the fact that the system must involve rights and responsibilities, there must be consequences for not fulfilling the responsibilities. However, if people do not buy into that, it is possible to conceive of a benefits system that runs without sanctions.
I will give another bit of evidence. When Dr Webster spoke to the committee, he gave some information on the history of the system, but he did not take the committee through the experience of the 1980s. During the big recession in the 1980s, my predecessors—under pressure—abandoned the sanctions and conditionality regime. The unemployment figure grew to 3 million—it was probably going to do that because of the nature of the economy—but it is interesting that it stayed at 3 million until 1986 and started to downturn only when we reintroduced into the system such a regime—the programme was called restart then.
The counterfactual that proves that sanctions work is that, after the 1990s recession, when we worked hard—as we did in the 2008 recession—to hang on to the conditionality regime, the unemployment rate fell very fast. In the 2008 recession, unemployment was much lower than most external commentators suggested that it would be. Some former members of the Bank of England’s monetary policy committee said that it would rise to 5 million, but it did not—it peaked at between 2.5 million and 2.6 million, and it is now falling back towards 2 million.
We think that the evidence is there that the system is working. When we did not have that system, we saw some extremely negative outcomes for general society and for the 3 million people who stayed unemployed for five, six or seven years as a consequence.
I will ask about the use of sanctions. You said earlier that there are no targets and that you abolished the use of benchmarks. Do you believe that there is a problem with the unfair application of sanctions? Just one indicator that that is the case is the fact that more than half of the appeals against sanctions are successful.
I am concerned that we get the application right. In the organisation, we have spent a lot of time working on that.
However, there is a bit of a misreading of the statistics going on. I think it was Jamie Livingstone who said earlier that 40 to 50 per cent of decisions are wrong. If you do not understand how the sanctions system works, it is possible to look at the statistics and to draw that erroneous conclusion. I am not having a go at Jamie Livingstone for misunderstanding the situation, but it is a misunderstanding of what is going on.
I can see that Ms Ewing looks as unpersuaded—
What is the figure?
Hold on.
Jamie Livingstone mentioned that the application of sanctions is successfully overturned in 58 per cent of cases.
I know that Mr Couling was commenting on what was said earlier, but you will get a chance to respond. Carry on, Mr Couling.
It is fine. I moaned earlier; I will stop moaning.
I tried to explain matters in paragraph 28 of the memorandum that we produced for the committee. We are required to send cases from jobcentres to decision makers even when we do not think that sanctions should be applied, but I reassure the committee that sanctions are not applied at the point at which cases are sent to the decision maker.
In the cases that involve a suspension of benefit by jobcentres, as I set out in paragraph 29,
“83% of referrals are upheld with a further 6% cancelled”.
Cancellation will tend to occur because, for example, the person has got a job and they have signed off benefit, so the sanction is no longer appropriate. The application of a sanction may have been right or it may have been wrong. Of the adverse cases—the 10 out of 100 cases in which we get things wrong—a reconsideration is asked for in two of those cases. Less than half of those get overturned at appeal. In other words, decisions that are made in jobcentres are overturned in one out of 100 of the cases in which we are absolutely certain that sanctions should be applied, not in 40 to 50 per cent of them.
We are asked to refer cases. The biggest example is when someone leaves work voluntarily. All those cases get referred to a decision maker, even when we think that the employer has behaved badly. That has to be investigated. In the statistics, those cases show up as ones that we got “wrong”. There is some frustration in jobcentres about that, as it is not the case that we got things wrong; it is just that the process requires us to send off the case. In such cases, the individual is not sanctioned. The decision comes afterwards. That is why I said that it is possible to look at some of the statistics and to get an erroneous impression of what is going on.
There is also an issue of fairness to do with lack of consistency. If you do not benchmark, how do you assess whether the same process is being followed and the same criteria are being applied from one jobcentre to another?
I will give an example. West Dunbartonshire CAB recently produced quite a hard-hitting report on the impact of sanctions. This is anecdotal, but it was reported that the number of cases in which sanctions were applied subsequently declined. Dr Webster, whom you mentioned, has done some analysis that shows that there is variation between and within areas of Scotland as regards the number of claimants. Do you recognise that that inconsistency will, in itself, create unfairness?
12:15
I do, and I am concerned about it. In fact, I advertently put pressure on myself and my organisation by recommending when I did the review for the secretary of state last year that we publish the data down to individual job centre level, so in the September statistics you will see for the first time, in effect, all the management information that I have at my fingertips set out for everybody. There is therefore no place to hide on any of the sanction numbers for anybody in Jobcentre Plus; it is apparent what jobcentre A and jobcentre B are doing and it possible to compare the two.
There is too much variation, so I have set out at paragraph 31 of the memorandum some of the things that we are launching this year as part of the new operational year. In effect, there will be a full check in which we look at every case to see whether there is evidence to support the decision. We are also having managers sit in on interviews to work out whether the individual has wrongly referred somebody for a sanction or has failed to sanction somebody when that would have been the right course.
We are investing quite a lot of activity in this. I have to say that it is very difficult to do it without a target, because we have to ask what “good” looks like. There is a lot of discussion of what “good” looks like, so I have reduced it down to the individual cases. I do not know whether or not this will comfort Mr Stewart, but we are looking at every case and trying to decide whether we have made the right decision, because there is too much variation in the system for me to be confident about that. At district level, the variations are not so big, but when we get down to job centres there is some really wide variance.
We also look at the outliers—the bottom 10 offices and the top 10—and have things called go look see visits, when we send people in from outside to work out what is going on and to establish whether there are other issues. We are taking the issue very seriously, but it is not an easy one to crack, because ultimately individuals make subjective decisions based on the evidence that they are presented with. Of course, a reconsideration process will often throw up evidence that was not presented when the decision was made. This is an imperfect science.
I have one last question on this issue. You made some positive claims for sanctions and I began by asking whether you accept that there are a series of negative effects and impacts. You talked about having external people come in and look at your work. Are you aware of the recent reports from the Scottish Association for Mental Health and from the deep-end group of GPs that Dr Ip mentioned, which are practices serving the 100 most deprived populations in Scotland? Both reports focus specifically on the fact that stress levels and mental health have been affected severely by the sanctions under the welfare reform regime and that it is not only having a personal effect but is putting a demand on other parts of the estate. Do you accept that that has happened?
I have not seen those reports. We talked about rights and responsibilities. The system is designed to challenge people and we are challenging people in ways that they perhaps have not been challenged before. It could well be the case that that is having some consequences outside the sphere of social security, but I have not seen those reports. Am I concerned about that? We are dealing with some quite deep-seated problems. One of the best things that has happened in the past 10 years-worth of state delivery is the coming together of agencies to work together more.
A recent case in Margate in England involved an individual who was a lone parent and whom we would normally have sanctioned because he was struggling with his job search. However, when we contacted other agencies we found out that his children were misbehaving at school and getting suspended, and that when the health authorities had gone into the home they had found that the individual’s wife had died and that he had no idea how to care for his children. They were misbehaving at school because they were hungry and they were being teased because they were dirty and had not been cleaned, and so forth. The intervention in that case meant, in effect, putting in a supernanny to explain to the individual how to keep house and look after children. The children’s behaviour at school then improved to the extent that he could then get a job.
I think that there is a case for state agencies, however they are configured, to work more closely together because the issues that we encounter in our work are also encountered by other agencies. I would not call it, as someone did earlier, a form of cost shifting. Although having the best of intentions, organisations have inadvertently created more negative outcomes. I think that the way forward is the coming together of agencies, which is going on across the United Kingdom under various initiatives: in England it is the troubled families programme and in Scotland a similar initiative was already well developed because of the devolution settlement.
Thank you.
Good afternoon, Mr Couling. I will just pick up on a few points. You said in your earlier remarks that the vast increase in recourse to food banks was not demand led but supply led. If I recall correctly, you used phrases such as “wilful deceit” and “maximising economic position”. However, the committee has heard on a number of occasions, including in our earlier evidence session today—I understand that you listened in to that—that the considerable increase in the imposition of sanctions by the DWP has had an impact and has led to increased recourse to food banks. We have also heard that the Trussell Trust has reported that 22,387 children have used its food banks in the past year in Scotland. I just want to be clear. Are you saying that those children are engaged in wilful deceit? Are you saying that they are maximising their economic position by having recourse to food banks? Are you saying that they are not hungry?
No.
No. Okay. So that is the—
Well, it was a ridiculous question, wasn’t it?
Excuse me?
It was a ridiculous question.
Well, I find that actually—
It was twisting the words that I had said and then trying to throw them back at me. Look—
Mr Couling, you said those words, and I gave you the opportunity to recant.
Yes, but not in—
You said those words and the fact of the matter is that the DWP’s imposition of sanctions, particularly the unfair, overly bureaucratic and inflexible way in which they are being imposed, is having an impact. It is having an impact on children, who have got nothing to do with the situation. They are hungry and need food, but the DWP is taking away their parents’ ability to feed them.
Well, the sanctions—
You have given me a one-word answer to my question.
Well, we sanction—
If we could move on to the issue of mental health—
Fine.
Mr Couling can come back in a minute on that issue, if he wishes.
We are helpfully provided by our clerks with a weekly digest of various activities in the field of welfare reform. The one that we were provided with for this meeting referred to a recent freedom of information request to the DWP about the level of sanctions against ESA claimants with mental health conditions. The report that we have before us indicates that the FOI response disclosed that the proportion of ESA claimants hit with a sanction who have a mental health condition has increased from 35 per cent of sanctioned claimants in 2009 to a massive 58 per cent in 2013. Going back to your comments a moment ago on the mental health issues that were raised by my colleague, perhaps you would care to comment on that disturbing report.
I will comment on that, and also on the point regarding children. There is a chance that those without a detailed knowledge of the benefits system might be inadvertently misled about the position regarding children and sanctioning. What we sanction is the single adult component of somebody’s benefit entitlement. For instance, for a family that is sanctioned, the amount that is initially sanctioned is £71. The amounts for child benefit, child tax credit and housing—and, if it is a two-parent family, the money for the couple—are untouched. Those families then qualify for a hardship payment, which adds back in 60 per cent of that £71. It is not that there are families or children being left with no money at all. It is misleading to suggest that that is the case.
On the question about the increase from 34 per cent to 56 per cent, I think you said—if I have got that wrong, I apologise.
It was from 35 per cent to 58 per cent, referring to the DWP’s own figures.
Okay. We are talking about a very small number of people. We are talking about 1 per cent of people in the ESA work-related activity group. That increase is statistically significant if we consider the number of people who have been sanctioned. As a total of the population on ESA, however, it is infinitesimally small.
It is presumably of importance to those who are suffering the sanctions.
Indeed.
On the issue of children, I do not know whether you realise that, if you take away a bit of the money coming into a household that is under severe pressure, particularly a lone parent, that household will then be under further severe pressure. I do not know whether you really understand that, Mr Couling, given the remarks that you have just made.
Of course I completely understand that. It was the suggestion that families are somehow being left with no money because of sanctioning that I was trying to correct. That is a misleading impression.
Perhaps you do not have the figures to hand, but in how many cases of sanctions in Scotland are hardship payments made? In what percentage of cases? In all cases? Is it 50 per cent, or 1 per cent?
Nationally—and I have no reason to think that the position in Scotland is any different—about 90 per cent of applications for hardship payments are met.
That begs the question of how many applications are made. What signposting to hardship payments exists? You did not really answer my question. The question is how many hardship payments are made in cases where sanctions are applied. You could then break that down into cases where there has been an application and cases where there has not been an application.
Let me see if I have that information somewhere.
To be fair, I did preface my question by saying that, if you have the information, we would be happy to receive it, but I do not expect you to have all the statistics in your head at the moment.
I am slightly infuriated, because I was looking at that information this morning.
We are happy to get that information subsequently.
There are some technical issues that I also wanted to deal with. In the memorandum to which you have referred and which is before us, which is about six and a half pages of A4 text and one and a half pages of annex—for those who have not seen it yet, it is not exactly a tome—I do not see anything addressing the issue of communication. According to the evidence that we have received, which I think you have had the opportunity to read, communication is a very considerable concern. A question that has been posed is why there is not prior written communication in every case where money has been withdrawn. That is certainly not happening on the ground.
The memorandum is indeed not a tome. The committee asked for tomes not to be sent to it, for very good reasons. If you follow the footnotes, there is a wealth of reading with which you can while away the summer hours.
We have asked Matt Oakley to do a review of communications. I did not put in the memorandum what we are doing on that issue, because we need to wait for Matt to report and the Government then has to respond. What I would say to the committee is that, although we sometimes get it wrong, a lot of the time people who have been sanctioned will say that they were not aware. When we go back and show them that they agreed in their claimant commitment or jobseeker’s agreement to take certain steps, that we warned them and that they had conversations with their advisers, there is an acceptance that they were communicated with. However, that is one of the issues that Matt Oakley is looking at. I am sure that the Government will respond to that when we have his report.
12:30
Just to clarify, you gave these scenarios where people have been communicated with. Are you saying that they have been communicated with in writing or is it some other form of communication?
The claimant commitment is in writing.
But in the communication process that you refer to, is the fact that the sanction has been imposed always communicated in writing?
They will get a communication in writing.
Do they get that before or after the sanction?
It depends on the nature of the sanction. There are three different types, which the memorandum sets out: low, intermediate and high. In the case of some decisions, such as an intermediate decision, it will feel to the claimant as though they have not been told that they would be sanctioned, because, technically, they will not have been. Their benefit will have been suspended and they may feel that we have not communicated to them the decision on the sanction. Technically speaking, a decision will not yet have been made on their case; their benefit will have been suspended. In that case, that will have been communicated to them orally. However, how that is done is not always as clear as it could be, because the person in the jobcentre may tell the claimant, “I have to refer your case to a decision maker.” A claimant will not always understand that that could mean that they will not be paid benefit that week. I cannot prejudge what Mr Oakley will say, but that is a process that we could tighten up and help claimants more to understand.
I think that there is perhaps a slight misunderstanding of language here. You made the point earlier that a suspension is somehow very different from a final sanction decision, but as far as I can understand it from what you are saying—and indeed from the evidence that we have taken—a suspension can mean no money coming into a person’s bank account. For that person, to all intents and purposes, a decision has been made. They may have children to feed and expect the money to be in their bank account. However, despite there being no written communication, the money is not there. For them, a decision has in effect been taken. In your book, it may not be called a sanction decision, but it is a decision not to pay them the money that they had been expecting. They have had no prior communication to that effect and they have mouths to feed at home. Perhaps you can see why people feel that this system is not working.
I agree—that is exactly what I just said.
If it is the case that a suspension actually means that the money does not get paid, how do your appeal figures stack up? We heard from Oxfam that there is an overturn rate of 58 per cent when sanctions are applied. Perhaps it is the phraseology that you have a problem with. When suspensions are applied—in other words when the money is not paid—is that not a fair representation of what the overturn rate applies to? The DWP can call that what it likes, but it goes back to the point that, if the money is not paid, for the recipient that is a problem.
As I explained earlier, it is 1 per cent.
It is 1 per cent of all cases in which money has not been paid, be it suspension—
In suspension. It is a 1 per cent overturn rate.
Right, okay.
I have one last question—I appreciate that we have moved on and that time is pressing. One of the issues that arose when a small delegation from the committee spoke to people who have been impacted by benefit sanctions was the apparent disregard for any voluntary work carried out by claimants, which felt to me a bit short-sighted. Surely it is to be applauded that the individual is seeking to move on and, if no job is available, to do something to contribute to society. Would you care to comment on why voluntary work cannot be recognised?
Voluntary work is recognised in the system. However, where a conflict or clash arises, it is often because the adviser thinks that the voluntary work may be getting in the way of somebody’s job search. We encourage voluntary work. It is a good way of filling a CV; in fact, having gaps on their CV is one of the biggest problems that jobseekers face. There is no blanket ban on voluntary work.
However, if an adviser thinks that the individual’s voluntary work is not helping them with their job seeking—when they have been doing it for a while, their CV is up to date and they should be doing job search rather than voluntary work—that is when you will find these cases. It will be expressed as, “They won’t allow my voluntary work.” I am sure that that is exactly how it feels from that individual’s perspective, but that is not the system—it is not the rules doing that.
In this instance, perhaps the person did not feel that there was any conflict between their universal jobmatch search and their voluntary work.
I have one last, very brief question. You say in your memorandum:
“On the 8th April we launched a full quality assurance framework and checklist for the staff that work in our Jobcentres, and will be implemented consistently from 28th April 2014.”
Would it be possible to forward a copy to the committee?
Of course.
As Annabelle Ewing pointed out, time is moving on. That concludes this evidence session. I thank Mr Couling for coming along. It is probably safe to say that we did not agree with everything that you said, but we appreciate you giving us your time. That said, I—and, I think, other committee members—continue to believe that we would benefit by the attendance, on the record and in public, of a minister from the DWP. That is something that we will continue to pursue.
As agreed at the start of today’s meeting, we now move into private session.
12:36 Meeting continued in private until 12:56.Previous
Food Banks