Guy Miscampbell is an Economics Fellow at Policy Exchange.
Channel 4′s recent documentary series, ‘Benefits Street’, shone a light on the reality of life on benefits in one of Britain’s most benefit-dependent streets. The programme sparked a nation wide debate: is our welfare system working?
A basic principle of fairness is that people who have fallen on hard times and need support from the State do all they can to find a job. If you are over 25 years old and are physically and mentally able to work, you will currently receive £71.70 a week in return for meeting a set of conditions that are based on doing all you can to find work. These conditions include attending a regular meeting with your Jobcentre adviser, applying for available jobs and updating your CV.
A large majority of people on out of work benefits desperately want to find a job. There are, however, a significant minority of people who – for a whole range of factors – are failing to meet their jobsearch conditions. If an individual is found not to meet what is required of them, they will be handed a sanction – a punishment which leads to a withdrawal of benefits for a specific length of time.
For people who break the rules for the first time, a four week loss of benefits will occur. On the face of it, this seems fair. However, a paper published today by Policy Exchange, Smarter Sanctions, shows that almost a third of people in this particular group – 68,000 people a year – are unfairly sanctioned. This could have been down to administrative errors, or other factors – such as having to rush a poorly child to hospital and therefore missing a Jobcentre meeting. Unless an individual has family or friends that they can ask for money, many of these people will undoubtedly end up relying on food banks, crisis loans or payday lenders.
We think this system is unfair and is need of immediate reform. That’s why we are calling on the Government to introduce benefit cards for all first time offenders. Instead of a four week withdrawal of benefits, a claimant would be issued with a “top up’” style card which they could use in supermarkets and other retailers. These cards are already being used in some US states and Australia. Someone who breaks their jobsearch conditions for the first time would be given a card for eight weeks.
Claimants who had to come and pick the card up would be more likely to engage positively with the Jobcentre to overcome their issues, and less likely to drop out of the system altogether. This would be a fairer outcome, and a better process than simply focusing on taking money away.
However, when benefit claimants are consistently being sanctioned there should be stricter penalties. One of the distortions of the current system is that for the more typical offences, such as missing interviews, repeatedly failing to search for work is punished no more than if it is their second offence. Every sanction after the first one lasts 13 weeks. Our report recommends that this changes, with each additional offence being punished more than the previous one. Tough love.
To some, sanctions sum up everything wrong with welfare reforms; an inflexible system and unfair results. To others, they are the only thing preventing widespread fraud. Our view is that they can play an incredibly important role both for the claimants themselves and for the wider public who view the welfare debate through a distorted media lens. Quite simply, we need a more compassionate but stricter regime that helps people back into work.