Select Committee on Social Security Minutes of Evidence


Examination of Witnesses (Questions 112 - 119)

WEDNESDAY 15 SEPTEMBER 1999

MS MAEVE SHERLOCK AND MS ALISON GARNHAM

Chairman

  112. Ladies and gentlemen, can I declare the public session of evidence open and welcome Maeve Sherlock from the National Council for One Parent Families, who is the Director of the organisation, and Alison Garnham, who is the Policy Officer. We are very grateful to you both for submitting the evidence that you gave to the Government both on the Green Paper and the White Paper and it contains some very interesting ideas for us in the course of our current inquiry. Ms Sherlock, maybe you would like to open the session by telling us what you think the priorities are and whether indeed since you have produced the evidence any of your thinking on this has changed since the debate has developed.

  (Ms Sherlock) Thank you, Chairman. Broadly speaking, our position remains as it was when we gave written evidence to you. Our focus on child maintenance is really one that we see as being a fundamental part of an anti-poverty strategy. Most lone parents are poor, with one million families living in poverty, and so getting this right is fundamental to the future of poor children in Britain. For a child support system to work, it has to be reliable and regular. If a mother is to feed her children on maintenance and to be able to depend upon it, then regularity and reliability of maintenance are as important as the amounts involved. It is because of that and the untenability of the current system that we are happy to support the move towards a simplified formula even though we are aware that one of the consequences will be to reduce the average maintenance assessments for lone parents from about £38 a week to £30. Now, normally we would be jumping up and down and shouting about that, but we have been reassured by the Government that two things will happen: firstly, that lone parents on income support or Working Families Tax Credit will be better off because of the disregards; and, secondly, that the remainder will do well because the delivery of the system will improve as a result of the simplified formula and the fact that the Agency can then spend more time on making money change hands. Now, we are happy to buy that, but it means that in our view the entire success of the reform process is predicated on successful delivery in the future and so to us we think that successful implementation and ongoing administration are fundamental not just to our support of the reforms, but to the success of the Agency itself. At the moment the Agency, we think, has simply inadequate resources to deal with its current caseload on the current system and of course its caseload is increasing dramatically, so we do have some reservations about its ability in the future to deal with the reforms that are proposed. Finally, there are just two other points. We are very pleased about the disregards in the Working Families Tax Credit and also about that in income support, although in the case of income support, perhaps always wanting more, we would like it to start a bit sooner and also we would like it to be guaranteed. We are concerned that really the lone parent and child on income support can only benefit to the extent that the father can and will pay. Finally, we are concerned about good cause and we are very disappointed at the decision to retain a benefit penalty for those lone parents who feel that it is not in the best interests of their children to co-operate with the Child Support Agency and we are concerned that the move to have to opt out rather than opt in will mean that more people will be caught up in the system without understanding the implications. So our view is broad support, we are very pleased the Government is acting, we are concerned about specifics and worried about delivery.

  113. Thank you. That is a very helpful and concise opening statement. I wonder if we can ask you about the guaranteed maintenance payments. Would you go so far as drawing analogies with some other states within the European Union and slightly wider who actually do guarantee the payment, that is to say, they make the payments and then collect the money from the non-resident parent? Have you looked at these other systems and are you recommending that that is what we do here as a way of absolutely making sure that the money is reliably delivered?
  (Ms Sherlock) Yes, we are and yes, we do recommend that and have done in our written evidence. As you are aware obviously, most European child support systems do in fact guarantee maintenance. In this country it has always been rejected out of hand on the grounds of cost and we think that is simply erroneous. All you would have to do is set the guaranteed level below the mean assessment level and then actually the state would not be in difficulty unless of course delivery failed and that is a problem anyway.

  114. But have you done some work on that or have you done some work on the arithmetic, as it were?
  (Ms Garnham) We have not done work on the actual costs, but we have certainly done comparisons with other European countries. In fact the UK and the Netherlands are the only two welfare states that do not have a guaranteed maintenance system and we know that they are fairly cost-effective, so we would be happy to do some for the Committee if that was helpful.

  115. I think you have a view about which arm of government should actually do this work and I think that your evidence suggested that you might be happier if the Inland Revenue took over the responsibility. Is that so and could you say a word about that?
  (Ms Sherlock) It certainly is so, Chairman. Our concern really is two-fold. Firstly, it is very practical. Our view is that we would like to see the CSA completely re-engineered, renamed and reconstituted as a next steps agency of the Inland Revenue and that is for two reasons. The first is practical in that we think the Inland Revenue staff have experience and skills and knowledge in the very areas that are needed. The area in which the Agency has failed most singularly has been in the case, for example, of self-employed parents. Inland Revenue staff are skilled and experienced in deducing income from lifestyle, something which the CSA has singularly failed to do. They are also experienced in being able to implement and enforce payment in a way again that the Agency has failed to do, so we think there would be a much higher success rate. I think it is also partly a cultural question. We think it would send out a signal that paying child support is fundamentally important. People do not just not pay their taxes. We have a very, very high rate of tax-compliance in this country and we would like to see that extended to child support. We think paying for the welfare of your children is fundamental and is as important as paying your taxes and a move to the Revenue would facilitate that.

  116. You would not then just risk another administrative upheaval in the transition?
  (Ms Sherlock) There is going to be an administrative upheaval anyway and frankly there has to be. The only alternative to an upheaval is to allow the Agency to carry on as at present and that will just allow the current administrative disaster to continue rather than a new administrative disaster to be created, so we think an upheaval of some sort is necessary. It is likely, given the system in the future, that if the formula is so simple, the work is not going to be in calculation and assessment, but in collection and that is what the Revenue are good at. It is what they do anyway and they are already blurring the line between DSS and Revenue through implementing the Working Families Tax Credit and we would like to see them go a step further. I can understand that if I was a Treasury Minister, I would say no. They have got an impeccable record and of course they do not want the Child Support Agency, but it is not about departmental requirements; it is about the country's needs.

Mr Pond

  117. Could I continue with this transition question for a moment. As you know, the Government's feeling at the moment is that to go for the "big bang" option of switching everybody on to the new system immediately is dangerous in terms of the ability of the system to cope with it. On the other hand, we know that there are some difficulties with running two systems at the same time, starting with new claims and then over time, at the moment on an unspecified timetable, phasing in existing payments. Do you perceive that as a particular problem and do you have a preference as to which of those two options should be pursued?
  (Ms Garnham) Yes, we do foresee problems with that because the proposal in the White Paper suggests taking on cases over a period of time after the new system has come in, but then introducing them more from a common date, so that means running two systems in parallel for quite some time. Given that the CSA has seen a 22 per cent increase in workload from last year to this, it is difficult to see how they could take on board administering two systems side by side, so we think that they need additional funding in order to be able to do that. We know that the Government has committed an additional £28 million, but we are not sure necessarily that that is going to be enough for that. We agree that they should be taken on from a common date, but the concern is what happens in the interim and whether there is confusion set-up and whether in fact it takes a very long time to arrive at that point. It also has a knock-on effect, for example, for parents with care because until they receive their first payment under the new system, they do not get the £10 premium which is again one of our arguments for bringing that forward, so we are very concerned about that and we think a lot needs to be done now leading up to the 2001 changeover to prevent chaos happening.

  118. If the trade-off were to introduce the whole system in one go, but to do it at a later date which is currently unspecified, is that a trade-off that you would think would be worthwhile?
  (Ms Sherlock) We would be happy with that on two conditions. One is that first there was a commitment to fund the CSA's increasing caseload at the moment, so we did not simply abandon people until the new system was in place. The second is that we think that the £10 disregard on income support should be brought forward so that lone parents are not left waiting for that. The reason for that is not simply to give lone parents more money, but we think that the biggest job that the Agency has, and the Government of course, is to change the culture and attitudes to the CSA. We need to establish that paying maintenance is something good parents do and we need to remove excuses for not doing so which means that we have to rehabilitate the Agency and one of the best ways to do that is to give everybody who has to co-operate with it some benefit out of so doing and that will not happen until the £10 disregard is in place.

  119. Another element of co-operation in this is the whole question about penalties for non-co-operation and you have got a section in your evidence on good cause. You prefer that the penalties, I think, are reduced or removed altogether if possible. Do you perceive that the co-operation with the system is going to increase as a result of the changes regardless of what happens in terms of those penalties?
  (Ms Garnham) The answer is simply yes. The one thing that has not been tried so far is incentives to co-operate. What has been demonstrated beyond any doubt is that applying penalties to encourage people to co-operate does not work and you have seen that with the large non co-operation rates that have been in place so far. This will be the first time to actually try to see whether providing some advantages to applying for maintenance would actually work in increasing the co-operation of parents with care. We certainly think that there is no case once you have got incentives in place to have a benefit penalty and that it should be removed. If that is not to be done in the short-term then perhaps in the longer term but at least it should be reduced to its earlier levels in the meantime, something which was introduced fairly recently and was very unpopular with all parties at the time.


 
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