Menu
Tue, 27 February 2024

Newsletter sign-up

Subscribe now
The House Live All
Environment
New study reveals that card payments significantly benefit UK economic growth Partner content
Economy
Creating prosperity and growth: the importance of innovation in the UK economy Partner content
By Mastercard
Economy
Being a responsible, long-term partner to Britain Partner content
By EDF
Environment
Economy
Press releases

Forcing unready people into ill-suited work is not the answer

3 min read

The Chancellor made a lot of strengthening the sanctions regime in his statement. His focus on sanctions took away from several welcome changes.

From April 2024, the government will close the case of Universal Credit claimants who are jobless after 18 months and refuse to take part in a mandatory work placement. Those who have been on an open-ended sanction for six months will also find their case closed.

The Chancellor dedicated half a paragraph to this policy in the Chamber, more than he gave to the government’s expansion of Universal Support, Talking Therapies, or Support for Severe Mental Illness.  The rest of the paragraph spoke of 200,000 more people in work by the end of the forecast period. The Chancellor clearly sought to draw a link between being tough and boosting employment.

Except the link is only rhetorical.  The OBR estimates the whole welfare package will add 50,000 people to employment.  The rest of the 200,000 stemmed from measures – primarily improvements in childcare support – that the Chancellor already announced in March, as he himself recognised. 

Even the 50,000 increase had little to do with strengthening sanctions.  That number came from worrying changes to the Work Capability Assessment descriptors (contributing 10,000) and welcome expansions of Universal Support for the disabled (15,000), Individual Placement and Support for the severely mentally ill (10,000), Talking Therapies (10,000), and the Restart scheme (5,000).

It is unsurprising that strengthening sanctions contributes so little.  The government’s own evaluation of the impact of benefit sanctions found that sanctions do not significantly affect exits from welfare into work and actually reduce the exit rate of claimants into well-paid work.

Even if sanctions did increase employment, the government’s reforms are heavily caveated.  Claims will be closed for individuals who are eligible only for the standard allowance.  This excludes parents claiming the child element of Universal Credit and individuals claiming disability or housing elements.  

Nearly half of households on Universal Credit in August 2023 received the child element.  Another 1.5 million received the housing element and 980,000 households without children had either Limited Capability to Work or Limited Capability for Work Related Activity. The number of claimants impacted by the strengthened regime will be small.

The government expects the policy to save up to £10 million per year.  Total managed expenditure on welfare will be over £300 billion from 2024/25 onwards and policies such as expanding Talking Therapies are expected to save £25 million per year at a minimum.  How the government reaches the £10 million figure is unknown, since the working is not included in the Autumn Statement’s Policy Costings.

The Chancellor’s decision to focus on the sanction regime is a shame.  His Statement announced several positive measures aligned with the person-centred approach my committee has called for, such as the expansion of Individual Placement and Support, which outperforms all other models of support for jobseekers with mental ill-health.

Our inquiry into the earlier Plan for Jobs and employment support also found that 30% of people were economically inactive because of long-term sickness, while 46% of young people were out of work due to mental ill-health or caring responsibilities following the pandemic. The Chancellor’s plans to support the mentally ill and improve occupational health are welcome and should help a significant number of people who are out of work at the moment.

Our political conversation about social security is too often, and against the evidence, focused on forcing unready people into ill-suited work.  Media coverage of the Chancellor’s Autumn Statement should have focused more on the sensible policies which were announced than on the tough talk which accompanied them.

PoliticsHome Newsletters

Get the inside track on what MPs and Peers are talking about. Sign up to The House's morning email for the latest insight and reaction from Parliamentarians, policy-makers and organisations.

Categories

Economy
Podcast
Engineering a Better World

The Engineering a Better World podcast series from The House magazine and the IET is back for series two! New host Jonn Elledge discusses with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

NEW SERIES - Listen now