Sanctions briefing - SCVO appearance before Welfare Reform Committee

The Impact of Sanctions in Scotland

Our members will no doubt respond with details of the impact of sanctions on the people they work with on a daily basis. Across the third sector in Scotland, evidence of the devastation caused by sanctions, in many cases applied incorrectly, is quickly building.  This issue is fast becoming a key driver in increased demand for support as sanctions appear to be taking many people to the point of destitution e.g. some 120 people with disabilities have been sanctioned for the maximum of three years following the Work Capability Assessment.^[ii] Other examples shared by third sector organisations in Scotland include:

• A 400% increase in sanctions in a very deprived area of South West Glasgow alone^[iii]
• The impact of sanctions on tenants is affecting the work of Housing Associations; the Scottish Federation of Housing Associations is currently gathering evidence from its members
• During April 2012, over 200 sanctions were applied to claimants every working day^[iv]
• Citizens Advice Bureaux and other third sector organisations given examples of individuals and families left in extreme hardship because of sanctions applied with little or no consideration of personal circumstances and in some cases having wider impact on family and support networks (e.g. sanctions on those with caring responsibilities)^[v]
• 73% of referrals to food banks were related to benefit sanctions and delays^[vi]
• Poor communication around expectations of claimants and when/why sanctions are applied cause tremendous worry and stress
• There is evidence of “stockpiling” of sanctions – Citizens Advice in Scotland have seen a number of cases where sanctions have been applied retrospectively for issues which occurred up to 14 months previously. This is as a result of the change in law made through the Jobseekers (Back to Work) Act 2013 ^[vii]
• Sanctions are being applied for personal circumstances which a claimant cannot change – and which actually create savings for statutory services - for example, kinship and unpaid care situations. Examples are highlighted in the Coalition of Care Providers in Scotland’s response to the Expert Working Group on Welfare.^[viii] Anecdotally we are aware of unpaid carers moving towards Jobseeker conditionality but with no support for their caring roles to enable them to take up employment

What is increasingly clear is that the application of sanctions represents cost shunting to the third sector in Scotland – carer and disability organisations, housing associations, Citizens’ Advice Bureaux, condition specific organisations, and mental health charities all report increased demand for support and help as a direct result of welfare reforms. The impact of this combined with other benefits changes is continuing to place additional pressure on the third sector in Scotland. This was highlighted in stark terms during a recent session Increasing presentation of crisis situations diverts organisations from delivering preventative support services, as outlined by SCVO’s research into the impact of welfare reform on Scotland’s third sector.^[ix] More widely, the impact on public services – health, social care and others will be significant.

Questioning the Effectiveness of Sanctions

Sanctions generally work against people moving back into work for a number of reasons:

• Firstly, they are pushed toward destitution and therefore are unlikely to be able to take up opportunities to retrain, access employability support etc. In one case study supplied by Citizens Advice Scotland, an individual could not afford to make a 30+ mile trip to the nearest Jobcentre. Clients in rural areas may have to use a significant amount of their benefits upfront to meet stringent conditionality e.g. travel to interviews, support programmes – at a time when the cost of living is already placing unbearable pressure on many.
• In dealing with a crisis situation, the focus for families will be on trying to access the basics of life – food, shelter, heat – rather than moving back towards employment. It appears that the current system takes no account of the complexity of people’s lives, the barriers they face in a challenging economic situation – it effectively sets them up to fail.

The UK benefits system is already weak in terms of offering incentives to work – some of the potential “disincentives” in Universal Credit have been highlighted by the Institute of Fiscal Studies and others. ^[x] Strict conditionality and sanctions regimes do not incentivise people to move back into work – many are already keen to find work and express dissatisfaction with the support on offer.^[xi] Commentators argue that the impetus in driving stricter conditionality and sanctions is a moral one with little recourse to an evidential approach or underpinning rationale for policy decisions.^[xii] Moreover, the ability of claimants to truly understand the obligations they are under reduces any potential impact on job-seeking behaviour.^[xiii] The complexity of the benefits system is such that inevitably people get ‘lost’ and may not be able to meet the requirements to receive benefits. They are penalised for a lack of understanding of conditionality rather than their inability to meet specific requirements.^[xiv] The possibility of more discretion in setting the conditions of benefit receipt under Universal Credit may make this a more likely scenario.^[xv] As working families find themselves within UC conditionality, sanctions for not being able to increase their hours in work, for example, might lead to greater in work poverty. Making work pay is an ongoing challenge in a low pay, low skilled labour market – again, people may find themselves penalised for not meeting UC conditionality through no fault of their own.

Economic Impact of Sanctions

The fact that more vulnerable and disadvantaged groups are more likely to face sanctions shows a lack of understanding of the economic impact of the sanctions regime. Those who are already disadvantaged then move further away from the labour market not towards it as poverty increases. Alongside the range of policy decisions to cut benefit amounts/access to benefits, sanctioning leaves people with little or no income which they are more likely to spend in their local area. Less money goes into the community and into local economies thereby limiting demand and growth. ^[xvi] People forced into greater destitution are likely to turn to desperate measures just to survive. Their health will be substantially affected (increasing demand for health care).^[xvii] Early exit from jobseeker benefits as a result of sanctions (Europe) can lead to poorer employment outcomes including lower earnings and job instability. There are hardship impacts for children (US).^[xviii] This leads to more dependency on in-work benefits and is likely to lead to increased demand for support from other services, including third sector organisations. Any savings which might be accrued from sanctions are therefore negated by the impact of sanctions on crime levels^[xix], demand for other services as well as poorer health and wellbeing. As more children move into poverty^[xx], the medium to longer term effect on their life chances will have wider social and economic impact. We have little doubt that the effect of sanctions and other changes to benefits has been consider in terms of a reduction in social capital and the ability of people to create their own solutions in difficult times. It is clear that a fundamental review of conditionality and penalties is needed – and it isn’t clear that this review will achieve such a goal. More widely a new approach to supporting unemployed people back towards employment is missing. A ‘work first’ approach is inherent within the current system which doesn’t take cognisance of the barriers people might face to finding sustainable job opportunities. European funding has enabled SCVO and others to develop employability support programmes which are tailored to meet people’s needs – to empower them to overcome barriers which prevent them from accessing opportunities e.g. offering waged placements, driving lessons, etc., which the UK delivery model does not always cover. Other approaches are worth considering as part of this review.

Alternative Approaches

Community Jobs Scotland – A Positive Approach to Helping People Find Work

Managed by SCVO, Community Jobs Scotland (CJS) is a Scottish Government funded job creation programme. Supporting wider employability goals, CJS helps young unemployed people access paid work and additional training to progress into sustainable employment. It also helps to strengthen and develop third sector organisations taking part. Two evaluations of CJS have shown a range of positive outcomes which far outweigh those achieved by e.g. the Work Programme. Phase two of the programme will offer wage incentivised jobs targeted at disabled young adults with a further extension planned for ex-offenders and young people leaving care – recognising their distance from the labour market and specific challenges in accessing employment. With increasing evidence that the Work Programme is not reaching such groups^[xxi], this type of approach could provide a baseline for developing more tailored employability approaches. In a soon to be published evaluation of CJS, key outcomes include:

• The creation of 1,420 jobs across 383 third sector employers
• Jobs created across all 32 of Scotland’s local authorities
• 39% entered employment; 9% entered further education or training; 6% engaged in volunteering.

This compares favourably to the Work Programme – both in terms of time on the programme but also in relation to outcomes e.g. for those who moved into the programme in its early stages, 22.5% of the June 2011 intake achieved a job outcome payment.^[xxii] More importantly, those who take part feel supported through the programme and their employer: “They were positive about their CJS jobs, the support they received from their line manager and colleagues, and the training they could access. The experience enabled them to learn new skills, take on new responsibilities and get used to the working environment.” Across the lifetime of the scheme, and previously with the Future Jobs Fund, the third sector has created some 6,482 job opportunities since 2009. The total investment in the programmes was just shy of £37 million.^[xxiii] This shows the substantial potential of the third sector to shape a new approach to employment services – creating real opportunities for unemployed people to move back into the job market on a more competitive basis.

Conclusion

There is an increasing evidence base which demonstrates the devastating impact of sanctions and from a range of third sector colleagues, worrying examples of wrongful application of sanctions.  Combined with other benefit changes, there is a cumulative impact on individuals, families and communities which will continues to place additional pressures on third sector organisations of all sizes and all types. More widely, work needs to be done to consider the cumulative impact of a range of benefit changes implemented over the last 18 months to 2 years. Work will be done in Scotland through Advice projects (partly funded by reserved advice monies and added to by the Scottish Government) to better understand what that impact might be. The Scottish Legal Aid Board which is administering the “Making Advice Work” strand is likely to pick up case studies of real life “total” impact of the suite of benefits changes to date on people who may already be in debt and who are then, in turn, affected by jobseeker sanctions. The effect on people’s lives may be nothing short of devastating. Calls for a cumulative impact assessment of welfare reform to date must be met. We would call into question the difference this current review will make to stringent conditionality – exceptions rules must be included to take account of people’s needs and circumstances. We would also support the need for independent review of decisions to sanction outlined by the TUC and Child Poverty Action Group. ^[xxiv]

Contact

Lynn Williams, Policy Officer Tel: 0141 559 5036 E mail: lynn.williams@scvo.scot Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh EH3 6BB Web: www.scvo.scot

About us

The Scottish Council for Voluntary Organisations (SCVO) is the national body representing the third sector. There are over 45,000 voluntary organisations in Scotland involving around 137,000 paid staff and approximately 1.2 million volunteers. The sector manages an income of £4.4 billion. SCVO works in partnership with the third sector in Scotland to advance our shared values and interests. We have over 1300 members who range from individuals and grassroots groups, to Scotland-wide organisations and intermediary bodies. As the only inclusive representative umbrella organisation for the sector SCVO:

• has the largest Scotland-wide membership from the sector – our 1300 members include charities, community groups, social enterprises and voluntary organisations of all shapes and sizes
• our governance and membership structures are democratic and accountable - with an elected board and policy committee from the sector, we are managed by the sector, for the sector
• brings together organisations and networks connecting across the whole of Scotland

SCVO works to support people to take voluntary action to help themselves and others, and to bring about social change. Our policy is determined by a policy committee elected by our members.^[1] Further details about SCVO can be found at www.scvo.scot.

References

Scottish Voluntary Sector Statistics 2010, SCVO www.scvo.scot/evidencelibrary/Home/ReadResearchItem.aspx?f=asc&rid=1078