Select Committee on Social Security Minutes of Evidence

Examination of Witnesses (Questions 349 - 359)




  349. Can we welcome Professor Bradshaw and Professor Millar of the Universities of York and Bath respectively, both well known in the territory. We are delighted that you were able to come and we are very grateful for your submissions which we have studied with interest. I would be obliged if one or both of you would say a few words in terms of what your perspectives are and particularly if you have got any kind of even glancing experience of the Australian experience. As the hearings have been unfolding, we have been getting some quite interesting evidence about some of the aspects and elements of the Australian system and even if you do not have yourselves first-hand direct experience, you must have academic colleagues and other contacts in Australia who might help us with that. Anyway, Jonathan, perhaps you could start with a short opening statement and we will take the session from there.

  (Professor Bradshaw) Thank you very much, Chairman. I think that we have been asked to perform this duet because Jane Millar and I were responsible for the first national survey of lone parent families which was published in 1991 and, by serendipity, contained data which helped to inform the White Paper on the original child support scheme and subsequently we both independently have done research on non-resident fathers and, in particular, that research has focused on their financial obligations, but we have not done the fathers research together and I am not quite sure what Jane's view is of the White Paper proposals, so you might find us diverging at some points. I had the temerity in my written submission, the courage indeed, to hope that the Social Security Committee would play a rather more critical role of these proposals than your predecessor was of the original proposals and as they were being reformed because I think that one of the things which has been very unhelpful in the whole process of thinking about child support policy has been that Parliament itself has not been terribly responsive to feelings in the wider community, particularly the feelings of fathers. It has been very encouraging in this process that fathers have been involved in discussions with ministers and have been invited to these meetings, which is really the first time that they have been incorporated into the debate. They are usually a kind of silent body out there. My own memorandum is based on a survey that we did of 600 non-resident fathers funded by the ESRC with some supplementary funding by the DSS and a couple of qualitative studies of non-resident fathers. A simple conclusion arising out of that is that I think that a regulated scheme run by the DSS is not going to work and I am afraid that I agree with the lawyers and the fathers' organisation that it would be much better if these things went back to a family court arena, that child support was negotiated rather than an imposed obligation and, in particular, that it was negotiated in the context of discussions about other aspects of life following the breakdown of relationships, in particular, contact with children. There is absolutely clear evidence from our research that if fathers have contact with their children, the chances of them paying child support increase exponentially. I think it is a pity that we have not taken the opportunity of the collapse of the information giving sessions and the mediation sessions under the Family Law Act and the hiatus there is in that area of legislation and the reform of this legislation to bring the two parties together, to get the Lord Chancellor and the ministers in Social Security together to work through a system that brings these different aspects together. I am not saying that child support should be linked directly to issues of contact but just that they should be negotiated in the same framework. That is what happens in most other European countries. The research that we undertook at York, Anne Corden's research on European child support regimes, shows that is how it works there and it works better than it does here. That is the first main conclusion. The second thing I would say in opening is that I think we have consistently over-estimated the capacity to pay of non-resident fathers. They are a very poor group, they are much poorer than normal fathers. Those ones that are going to be particularly affected by the scheme, who are the non-resident fathers of mothers on income support, are very likely to be on income support themselves. Quite a lot of the energy that is going into the legislation is really about transferring £5 from non-resident fathers on income support to the lone parents on income support. Is it worth it? My view is that it is an unfortunate thing that we are thinking of transferring £5 from anybody on income support because income support scale rates are inadequate as they are.

  350. That is very useful. Jane, could you do the same, just a short statement. If there are any lessons from Australia that you know about that would be good to hear about too.
  (Professor Millar) Thank you very much. I must apologise for not being able to get any written evidence in to you beforehand. This really follows on from the last point that Jonathan was making about transferring £5 across from one family to another. One of the things I wanted to argue that the Government should be considering is whether there should be a guarantee of some child support. A number of other European countries do have a system whereby the government guarantees an amount of child support and then seeks to recoup that back from the separated parent. That ensures that if one of the goals of the policy, and indeed the goals of the Government more generally, is an anti-child poverty goal then guaranteeing some money into the pockets of lone parents seems to me to be terribly important. I think there is an argument or a case for saying that on what is proposed at the moment, the £10 disregard for families on income support, many families will not benefit from that because they are not going to get the £10 in the first place but a £10 guarantee would make a substantial difference. That is the first point I want to make. I have not come prepared to talk about Australia particularly but I can indeed find out quite a bit of information. Let me tell you some of the things that I do know about the Australian system. I am sure you know the basic background, as it were, that it is a formula based system but it was not retrospective like the UK system, so it did not have that element to it. It is based in the tax office there. Some of the statistics that I do know are first of all that the CSA, like our system here, does not cover all lone parents, about 30 per cent are outside of that system with private agreements and private payments and, therefore, we know very little about those and about compliance in those cases and so on. It is true that both the numbers in receipt in Australia and the amounts that they receive have risen since the scheme was started. It is estimated that the receipts among benefit recipients have risen from about 26 per cent to about 42 per cent and the average amount has risen from about 48 Australian dollars to about 68 Australian dollars. It has seen an increase. Australia collects about seven dollars in child support for every dollar it spends on administration. Their figures, where they make comparisons with the UK, suggest that the UK only collects about one and a half for every pound or dollar spent on administration. It looks much more efficient. It is also true that, like here, a large proportion have nil assessments because their incomes are too low to pay. We have got about three in ten in Australia of separated parents who have nil assessments. Most lone parents, about six in ten, are still getting nothing, so it is still true that in many cases they do not get anything. There were about seven reports and reviews up to 1984 when there was a very major review of the child support scheme in Australia and there were about 6,000 submissions received to that review, about two-thirds of those from separated parents, and the most common complaint was about the level of payment. So the issue of legitimacy and so on is still a live issue in Australia. What the government is proposing there, as I understand it, are measures that will reduce the amount of the separated parent's liabilities, so in a sense they are responding to these issues that the separated parents have raised. They also want to encourage more private collection, get people off the scheme altogether and making their own arrangements and making their own arrangements for paying. Some Australian critics of these proposals have argued that this would undermine the anti-poverty goal even further because it would drop more people out of the net, as it were, and mean that the child support system becomes even less capable of ensuring that lone parents receive adequate levels of support. I think actually the Australian experience reinforces some of the criticisms of the experience here. There is not a pot of gold waiting out there and if the state does not guarantee some form of child support for lone parents and their children then in many cases it is not going to be transferred to them.

  351. Thank you very much. Can I ask each of you, what do you think the main provenance of the White Paper proposals is in terms of policy, of child poverty or restitution to the taxpayer or whatever? If you are looking at the White Paper proposals, what do you think is the main thing that is driving them really?
  (Professor Bradshaw) In my view there is the same ambivalence about the principal objectives as there was in the original scheme. I think the main thing driving the proposals is an aspiration on the part of the DSS to sort out the mess they have got in their department. I do not think the opportunity has been taken to think fundamentally about what are the best interests of children, what are the best interests of taxpayers, how can we resolve this in the best interests of all the parties. If they had sat down and asked those fundamental questions I am sure they would have involved themselves in discussions with the Lord Chancellor's office but, as I understand it, there has been hardly any serious discussion between them. It is obvious that the Lord Chancellor does not want to pick up this poisoned chalice. That is where they would have looked if they wanted to start again and make fundamental reforms. I agree with Andy Farquarson when he said that what is happening here is we have got another Child Support Act, not a fundamental rethinking of the principles of the scheme from scratch. Also, if I may say so, I think the process has had very little regard to research. There is hardly any research relevant but there is a bit. In the Green Paper there were not any references to any research and in the White Paper I think there are three references at the bottom of pages which is quite surprising from a Minister who has got two PhDs.
  (Professor Millar) Two goals appear in the text of the White Paper, one is the anti-poverty goal and the other is the parental responsibility goal, that it is the business of Government to ensure that parents take responsibility for their children. Those seem to be the two goals that appear in the Paper. There are questions then about how compatible those two goals are and it might be argued that they are not particularly compatible. There is certainly controversy over the parental responsibility goal and how far it is the business of Government to be involved in this area or how far using financial measures is actually the best way. If you wanted to argue that it was a good goal for public policy to ensure that parents are fully involved in the care of their children after parental separation, whether you drive that through financial measures or some other measure seems open to question.

  352. Are both of you really, really saying that we should stop this process now, we should go back to the drawing board and it might take, I do not know, a couple of years to do adequate research, get the Lord Chancellor's Department involved and meanwhile the existing system continues for another two years and it might be a five or a ten year period before we get some sensible long-term reform? Is that a price worth paying?
  (Professor Bradshaw) I have said in my evidence that I would not have started from here, but we are here with the White Paper and I think probably the much more sensible strategy for the Government to pursue now is to take up some of the ideas that have been expressed by the lawyers and take out non-income-support cases from the scheme and let them carry on being dealt with privately. The way in which private settlements are being made is roughly what I think is what we need for the whole system, but in the absence of that for the whole system, I think it is madness for the child support system to even begin to think of taking on private cases and allowing people to come into the system after a court order has lasted a year—I think it is just asking for trouble—and concentrate on the income support cases. That is where the state has got most interest in the issue and there are lots of good things in the new White Paper, better things than the previous scheme for income support cases, of which the disregard is of course the most important, but I do think that there remain problems and you get away from the problem of the resources of the parent with care being an issue if you just concentrate on income support cases, but I still think that there ought to be some means within the child support scheme of the clients of the child support system being able to negotiate and discuss. It is the imposition without regard to circumstances that has lost the consent of fathers.
  (Professor Millar) I do not know the answer to that actually. I am not sure really. I think there are good things in the White Paper and there are certainly reforms which are necessary and should have been part of the scheme from the start. I do not know whether we can go back to a private scheme which deals with each case on an individual basis; even under the old system there were sort of guidelines and so on. I think though that it would be helpful perhaps if we thought more carefully about child support as a process, if you like, in which there are stages. One stage is about accepting the amount of child support which needs to be paid, there is another stage which is about collecting that money in and there is another stage about paying that money out and ensuring it gets to the lone parent and the children. I think it might be fruitful to think more carefully about when the state should be involved and in what way in each of those stages and indeed what government department might appropriately take responsibility for those stages, so I think there is more unpicking we could do. I am not sure I would say that we should go right back to where we were before child support.

Mr Pond

  353. You know the feeling when you are late getting somewhere, you are badly late, the engine is starting to splutter and you are lost and you ask somebody by the side of the road where you should go and they say, "You certainly should not start from here". I suspect that is how the Minister is going to feel reading Professor Bradshaw's evidence which does have a great deal of very valuable information in it, informing the process, but I think it would also be fair to say that in putting together the proposals, the Minister has consulted quite widely and in that process of consultation has had access to quite a lot of the research available. I wanted to probe some of the elements in particularly Jonathan's written evidence, if I may, Chairman, and first of all this point that what this is all about is that much of the energy is going into transferring that £5 from the non-resident parents to parents with care. In your evidence you say that on the basis of the research, two-thirds of non-resident fathers were in employment, which is admittedly much less than the four-fifths of resident fathers, but does that not imply that we are talking about rather larger numbers and that these are not all people on income support from whom we are transferring the £5?
  (Professor Bradshaw) No, certainly not, you are right, but initially anyway the new scheme is going to be focusing on the non-resident partners of caring parents on income support. Our sample covered all non-resident fathers. The non-resident fathers with lone parents on income support are much more likely to be on income support themselves. We actually do not know what proportion of non-resident fathers with lone parents on Income Support are on income support, but I would guess that about half are[18]. Even though only 30 per cent of the fathers in our sample are on income support or disability benefits, those people who are in work tended to be in very low paid work, so a larger proportion were poor. I am not sure if they come under the £100 a-week cut-off, but they certainly come under the £200-a-week cut-off.

  354. I think that is very valuable research to feed into the process. I would like to explore a bit further the issue about their ability to pay and one of the points that you have just underlined is the fact that they do not have very much income. We have to make a distinction here, do we not, between increasing the number of non-resident parents who are paying anything at all and the amount that those who are paying do pay, so is there not a balance here, that under the proposals it is expected that the amount paid by an individual non-resident parent will be less than they are paying now on average even though more non-resident parents will be brought into the system?

  (Professor Bradshaw) Yes, Baroness Hollis and I corresponded about this. They will be paying less if they are paying the CSA assessment, but most are not and most of them will be paying more. If compliance works and if it increases the proportion who are paying, most of them are going to be paying more and a very large group of them who will be paying more are those people who are on income support with second families to support who in the past were not expected to pay anything and who are now being required to pay £5. They are actually a very, very substantial body of losers who are new losers. So true, if people were paying what they should have been paying under the Child Support Act, they are going to be paying less, but most people, if they comply to this scheme when they did not comply before and as a result of the £5 minimum, are going to be paying more.

  355. And on the shared care issue that we talked about at some length in the last session, you say in your evidence that in particular financial obligations cannot be separated from the issue of contact, so you would be much in support of the idea of, for instance, reducing the assessments for non-resident parents where that non-resident parent had at least an average of one night a year with the child?
  (Professor Bradshaw) Yes. I am not sure that our findings are authoritative on shared care because we did not get a lot of shared care cases in our sample as a result of the way we drew it, so I would not say that I could be very authoritative about it, but on the whole I think that the present formula is too rigid on shared care and I think that the proposals in the White Paper would be fairer than the present scheme with the proviso that I think there are going to be caring parents and non-resident parents who attempt to manipulate caring arrangements in order to maximise their benefit from it which I think will be a very bad behavioural result, and not the only unintended behavioural result of child support policy, which we do not really know anything about because no one has done any work on it.

  356. Can either of you tell us anything about the likelihood of there being shared care arrangements by the income of the non-resident parents, not in precise income bands, but is it more or less likely where the non-resident parent is on income support that there would be shared care arrangements?
  (Professor Bradshaw) Shared care is much more likely when there has been a period of residence with the father and so out of wedlock births and cohabitation break downs are less likely to lead to shared care arrangements and they tend to be the poorer non-resident fathers. That evidence would suggest that the shared care arrangement is more prevalent among better off parents.

  357. Finally, if I may, we had some discussion earlier, which I am sure one or both of you can throw light on, on this issue about costs of the child. The 15 per cent is based on the assumption that it takes 30 per cent of the parent's income if a child is living in a household full time. Is there any evidence that would support or deny that figure?
  (Professor Bradshaw) In the Green Paper there was no reference to that and I wrote to Baroness Hollis after the Green Paper saying "what is the evidence for this assertion?" In the White Paper they put in a reference to Sue Middleton's study at Loughborough on the cost of a child. I have since been in touch with Sue Middleton to find out whether her findings support the proportions in the White Paper and she finds it very difficult to discern how anybody could have drawn these proportions from her research. It is a curious statistic, is it not, 30 per cent at average income? I honestly do not see how anybody from any source of data available in this country could have calculated the cost of a child at average income.

  358. But there is plenty of other evidence.
  (Professor Bradshaw) There is lots of evidence on the cost of a child but, of course, the cost of a child varies with income, or rather expenditure on children varies with income. The Family Budget Unit has attempted to produce the most sophisticated estimates of the cost of a child based on two levels, modest but adequate and low cost. I do not think either of the cash figures they came up with could have led to a 30 per cent at average income figure.

Mrs Humble

  359. We have had two alternatives presented to us to having a radically restructured CSA. One of them is to look again at the court system and you have mentioned that yourself, that you are sympathetic to some of the cases put to us by lawyers this morning. The other suggestion is that the CSA should be incorporated in the Inland Revenue and that I understand is the way that the Australian system operates. I would like your comments on the pros and cons of that given the scenario now of the Working Families Tax Credit coming in to replace Family Credit, the Inland Revenue running it and the Inland Revenue taking over the Contributions Agency. If we are looking at hopefully more people coming off benefit and into work and perhaps being helped by WFTC that might be an ever growing group. I just wonder what your comments on that are.
  (Professor Bradshaw) My view is that the adjudication process should be separated from the enforcement and collection process. The Inland Revenue can certainly collect and enforce on the basis of a formula or an agreement which has been adjudicated but I do not think that the Inland Revenue will be any better than the DSS in the adjudication process. I think there is a case for going back to negotiated child support agreements, okay with the formula guiding those discussions but yet there being some flexibility at the margin, that is what we need. There are two alternatives. One is to go back to the courts and the other is to develop much more the role of tribunals within the CSA arrangements. In my evidence on the Green Paper I urged the DSS to expand the role of the tribunal system and make it have this capacity to provide flexibility, individualised justice within a formula driven scheme, but they have not budged at all on that, the role of the tribunal is still going to be very rigidly limited which I think is a pity.
  (Professor Millar) I would tend to agree with what I think was implicit in your comments, that some of the arguments about why the Inland Revenue did not want to take this on board when the child support was first introduced was that it was not part of their business and they were not involved in those sorts of things. I think things like the Working Families Tax Credit and the way in which the Contributions Agency is organised now will change the Inland Revenue. I think those arguments are much weaker and there is indeed a strong case for considering whether the Inland Revenue should be involved in the collection of this money. In Australia it is indeed within the tax office there and they also use information about taxable income, ie information from people's tax returns, as part of making assessments. There is some sense to having it based on taxable income measures to determine incomes and there is also some sense in putting it in the tax office.

18   See Ev p 145. Back

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