BBC slavishly follows government line on impact of benefits cap

It is disappointing to again see the BBC reporting government statistics on the benefits cap without even the remotest hint of challenge as to what they mean.

Ashwin Kumar is the director of Liverpool Economics

It is disappointing to again see the BBC reporting government statistics on the benefits cap without even the remotest hint of challenge as to what they mean.

I know that statistical competence isn’t going to be in the skill-set of every journalist; but surely the BBC understands the need not to repeat government figures without a more sceptical eye?

So what are these disputed figures? Well today’s announcement by the Department for Work and Pensions (DWP) of the national introduction of the benefits cap says that, of people contacted by Jobcentre Plus to warn them about their potential for being hit by the benefits cap, 12,000 moved into work and 32,300 ‘accepted employment support’.

Why do these figures prove almost nothing?

First of all, we don’t know how many people were contacted by Jobcentre Plus. Without this information, the 12,000 and 32,300 figures are totally meaningless. Was it 1 per cent of the total, or 90 per cent?

Surely the BBC must understand that the difference is crucial.

Secondly, what matters when making a labour market intervention is the additionality – technical speak for how many more people responded to the intervention than would have done anyway. If all of those 12,000 were very likely to have moved into work anyway, then calling them on the phone can’t be said to have had much effect.

When Labour introduced the New Deals and new ways of operating by Jobcentre Plus such as compulsory work-focused interviews for many claimants, these measures were subject to huge amounts of evaluation. Departmental economists attempted to estimate the counterfactual – what would have happened if nothing had been done – in an attempt to work out how much effect these new measures actually made.

Clearly no such rigour constrained today’s DWP announcement.

Thirdly, all these figures could at most tell us is the effect of a phone call from the DWP. All of that rigorous evaluation evidence from the Labour years tells us one thing absolutely clearly. How and when Jobcentre Plus engages with claimants makes a difference to their work-seeking behaviour.

So even if the Jobcentre Plus phone call has made a difference to some of the people in question, it is quite conceivable that it was the fact of receiving a phone call that made the difference, rather than the benefits cap.

Research by the DWP has shown that the actual financial incentives in the system have less impact on work-seeking decisions than expected because of lack of knowledge. Coupled with clear evidence that the nature and timing of Jobcentre Plus interventions does make a difference, there is a reasonable question as to whether the phone call was more likely to have an impact than the benefits cap itself.

This has additional resonance because the DWP took one of the larger cuts to its revenue budget in the recent Spending Round. This of course means it is less likely that the department will have the resources to accompany the benefits cap with a phone call to every claimant.

Let us not forget that Iain Duncan Smith has form for misusing statistics about the benefits cap: see here for a letter from the UK Statistics Authority criticising DWP claims about the employment effects of the cap.

Given this history, surely the BBC owes it to us to be more careful not to use government figures without challenge.

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