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Benefits sanctions cost more to administer than they save, a damning report of the Government’s welfare crackdown has found.
The National Audit Office (NAO), the independent watchdog of state spending, said that fining claimants for failing to meet certain conditions caused them greater hardship, and cost the Government almost twice what it gained.
The analysis found the Department of Work and Pensions (DWP) spent £30-50 million a year applying sanctions, and around £200 million monitoring the terms it set for job seekers.
But in 2015, it said, the measures saved just £132 million.
Opposition politicians blasted a “discredited system” where ministers have “no idea about the true cost of the sanctions regime”.
Elsewhere in the hard-hitting report, the watchdog said the department had not endeavoured to track costs and benefits of the sanctions – either to the Government or to claimants themselves.
It said the DWP had not known what the effects would be on claimants when it increased benefits sanctions in 2012. Sanctions, the report said, “can lead to lower wages and increase the number of people moving off benefits into inactivity”.
In further attacks on the Government the NAO claimed sanctions were paid inconsistently across the country, blaming “management focus” and “local work coach discretion”.
It also revealed large and growing delays in the system. In August 2016, it said, 42% of decisions about Universal Credit sanctions had taken longer than 28 working days.