The short-sightedness of ‘poverty punishment’ tools in Active Labour Market Policies

Hayley Bennett, Social Policy Research Fellow, University of Edinburgh

For many the loss of a job or a period of prolonged unemployment can lead to a severe experience of poverty. Understanding our policy approach to both unemployment and poverty is increasingly important and demonstrates the extent to which we are out of kilter with the rest of Europe and our previous welfare state approaches; for example the UK government does not properly engage with the Europe 2020 anti-poverty strategy and avoids setting anti-poverty targets. Instead the UK government has reduced minimum income payments and reformed most areas of social security (housing, child benefits, tax credits etc) and re-emphasised the importance that individuals should move into work to reduce their own poverty issues. The reality is that a person out of work and in receipt of Jobseeker’s Allowance, regardless of what some newspapers may claim, is experiencing poverty and that this is an intentional part of our design of active labour market policies (ALMP). If we add to that the reforms of our current system, which now allows (and actively encourages) those in receipt of the lowest payments to be further inflicted with seriously damaging levels of poverty through benefit withdrawal and sanctioning functions, then it is increasingly evident that poverty punishment is central to our approach to ALMP policies.

Our focus on moving individuals into employment is not new and in theory ALMPs enable people to move out of poverty by using a range of supportive policy tools or a mixture of sticks and carrots. George Osborne might claim that Britain is “The best place in the world to create a job; to get a job; to keep a job; to be helped to look for another job if you lose one” but sadly he is wrong and ignorant to limitations of our current ALMP approach. First, not all employment positions provide enough pay to move individuals out of poverty and in-work poverty is on the rise. Second, and perhaps more visible, is the issue of limited ALMPs and services for job seekers. These are extremely poor as we have a very narrow set of support options and we don’t provide services that attempt to reduce poverty. In fact we use the threat of increased poverty (through sanctions or benefit withdrawal) as a tool to manage and arguably punish those in need of minimum income payments.

Sanctions are not applied in a selective way or directed at the few. Instead they are applied on a large scale affecting many individuals for often the slightest thing; there were 897,690 sanctions on people receiving the main out of work benefits last year in Scotland alone. The impact and high use of sanctioning mechanisms has led to the Citizens Advice Scotland to launch a challenge sanctions campaign and Glasgow’s Poverty Leadership Panel recently launched an appeals pack to assist individuals affected by this aspect of service design. David Webster from the University of Glasgow produced a thorough submission to the Works and Pensions Committee outlining the increasing sanction levels and notes that they account for one quarter of foodbank users in Scotland.  

Our recent research (as part of the COPE project) with individuals experiencing poverty revealed the extent to which the respondents became frustrated with the lack of adequate support in the design of ALMPs, disheartened by their treatment from officials, and disillusioned with the whole system. For those respondents who had previously been in long-term stable work the loss of their job affected their identity, the sanctioning regimes affected their trust levels, and their poverty experience drastically affected their feelings of self-worth. The realities of poverty and living under the control of punitive sanctions had led some respondents to attempt suicide and others to develop severe depression- yet none were able access any health support for this from the activation agencies. Many did not complain, have the energy to appeal, and all were quite clearly becoming ‘deactivated.’

Our research along with other research projects highlights a number of important issues regarding the negative effects of having a heavy sanctioning system as a central component of the ALMP.  First, with reduced income and narrow job centre functions job seekers are unable to afford retraining, counselling or others forms of support to enable them to improve their position in the labour market. There are no proper careers, benefit or jobs advice services available to them (unless they find it from alternative locally funded organisations). Second, it is clear that the activation services work in silos from health, housing and support services. Many people are negatively affected by one service provision whilst waiting to access others. Third and most notably, not only is the benefit rate keeping individuals in poverty but when sanctions and conditionality are applied, individuals are plunged into weeks of absolute hardship; respondents spoke about being unable to heat homes, cook food, and buy groceries. Those who are sanctioned (and who may have already been experiencing poverty for a number of weeks) are plunged further into difficulty. 

Poverty (and the threat of increased poverty) is used as a way to push people into work and it is now fundamental to the policy tools designed in the activation system. This is a real problem if we think we are currently paying for active labour market services that support people into work and in the process move people out of poverty. Instead we are debilitating people, crushing them with extreme poverty experiences, and reducing their agency or ability to act (see Wright, 2012). Other countries do incorporate some conditionality functions into ALMP but usually as part of a broader package of policy tools; e.g. Germany has extensive retraining programmes, Sweden provides predominantly non-means tested payments, and Poland provides social workers and counsellors at the front line. We offer job seekers unpaid and mandatory work experience, computer systems and technocratic processes, and once they have endured unemployment for a prolonged period, we offer access to the limited service provision of Work Programme providers.

There is, on the whole, a lack of political will to spend money on supporting people into the labour market and job seekers are increasingly demonised for their situation. Despite this the government actually spends a lot of effort on fraud squads, IT systems that aren’t fit for purpose, incorporating new conditionality processes, and large scale employment programmes that provide no training or ‘expensive’ support options (such as counselling). At the same time the sanctioning schemes inflict extreme poverty on those in receipt of out of work benefits and in need of proper support mechanisms. Such reforms of Jobcentre Plus are both short-term punitive measures, but also poor policy-making. They do not get the best out of the individuals working in front-line services, and the narrow policy tools do not support individuals into sustainable employment, reduce poverty, or increase individual well-being.

If we are to recover from the (regular) economic busts in a more effective way we need to not only invest in the skills of the population (and unemployed people specifically), but we must also stop alienating individuals through poverty punishment. We must enable people to remain connected and appreciated so that they continue to contribute to society and build the connections, confidence and feelings of inclusiveness needed to find new work. Reforming ALMPs is not an easy task but there is much research and evidence out there on ways to do it that is currently ignored. Perhaps the first step is an honest conversation (without derogatory discourse about unemployment) to enable practitioners, citizens, policy makers, politicians and service users to design systems that are fit for purpose and supportive of a wider vision of a productive and inclusive society.

References:

Wright, S, (2012) Welfare-to-work, Agency and Personal Responsibility. Journal of Social Policy , Vol 41, 02, pp 309-328

Dr Hayley Bennett is a Research Fellow in Social Policy at University of Edinburgh on the COPE project. The Combating Poverty in Europe programme is co-financed by the European Commission in the 7th Framework Programme, COPE unites experienced researchers and stakeholders from Germany, the United Kingdom, Italy, Poland, Sweden and Norway. Hayley tweets @haylesben