Select Committee on Social Security Minutes of Evidence

Examination of Witnesses (Questions 360 - 367)



  360. I will put one counter-argument that was given this morning and that was the Inland Revenue deals with declared accounts but we all have instances of people who are self-employed who declare a very small profit for tax purposes. The suggestion was put to us that judges in court have more flexibility, more leeway, they can look at people's lifestyles and say "given your lifestyle we award a certain level of payment". How do you weigh that into the balance? What actually happens in Australia, do they have similar cases of people who live in large houses and drive big cars and yet are paying tuppence ha'penny for their children, or whatever a dollar is over there?
  (Professor Millar) I am sorry but I do not think I can say much about that, I would need to get more information. The point that Jonathan was just making, but I was also making earlier, about separating the setting of what the child support liability is, and then the issue of how you collect and how you pay that out, in a sense what Jonathan was arguing was that the Inland Revenue could be involved in the collecting of that money but not necessarily in the setting of it. If that were the case then the issues that you are talking about today of responding more flexibly to people who are self-employed or with incomes that are harder to determine, it would make sense for that not to be part of what the Inland Revenue was doing, but that is not to say that the Inland Revenue would not be the right place for collecting this money in.
  (Professor Bradshaw) If we had a tribunal system within the CSA system which had the capacity to be flexible at the margins, parents with care would go to that tribunal and say "look, this guy is hiding this income, these assets" and they would not be completely governed by the formula, they would be able to do what the courts do which is to take into account earnings capacity and impose something different from the formula driven system. This problem of hiding resources could be dealt with if there was a flexibility at the margins of the CSA system or some way for the courts to provide that service, but it cannot be done with a rigidly imposed formula within the disciplines of social security.

  361. Would you see that having special relevance to those who have investment income? Under the White Paper rules investment income usually is not going to be taken into account unless somebody has very substantial investment income and that is their main source of income. One of the problems for the parent with care is to prove that the non-resident parent does have that huge amount of investment income. Would you see the tribunal playing a role in that? As I understand it the proposals are that there will be officers of the CSA who will initially decide whether or not there is a case here for a departure or whatever it is going to be called with the new system. How can we help the parent with care in those circumstances to try to prove that the non-resident parent actually does have this income that they are hiding?
  (Professor Bradshaw) I am not sure. I think you have probably got to learn from what the courts do. They ask for loads of documents in evidence before these things are settled and take into account all different kinds of resources. Within a formula driven scheme you cannot do that, you have just got to have a very simple definition of what income is going to be taken into account and disregard the rest. That is one of the problems about dealing with these problems through rough justice.

Mr Leigh

  362. Your value to this Committee is that you have conducted a very considerable amount of research over a long period, Professor Bradshaw, on parental attitudes and you summarise this in paragraph 28 of your submission where you say: "The results of this research show that the child support scheme has a very limited prospect of success unless it is based on negotiation between the parents, which is recognised as fair and the perception of fairness on the father's part depends more than anything on their ability (and the former partner's willingness) to have shared parental responsibility of their children." Then finally in paragraph 43 you say, "We should be demanding that the Lord Chancellor and the Secretary of State for Social Security develop a joint approach to the settlement of issues following relationship breakdowns". Now, interestingly, this is actually almost exactly the same sort of evidence that was presented at the beginning of this afternoon by the National Association for Child Support Action and, coming from different points of view, you seem to be suggesting the same sort of thing, but I have got to put to you the same question that I put to them and they could not answer because they defended themselves by saying they were not a research organisation. How much is all this going to cost?
  (Professor Bradshaw) I think I would probably answer you in the same way as they did. I am afraid I have not done the costings and also, and I was preparing to say this, I do not think it is the job of voluntary bodies and certainly not researchers to design policy and then do detailed costings of it. One of the things which I think is disappointing about the Green Paper and the White Paper is that they did not look at the alternative options and evaluate them and say, "Look, if we had gone down this route, it would have cost us much too much. Therefore, we didn't go down it". They did not do that work and I think that it should have been done. They started from where they were and they just shifted forward a bit. Obviously in the light of what has happened in the last five/seven years, to go back to a court system is a very radical proposal and does need to be thought through, but it is a pity that this opportunity of reform did not try to think it through, particularly in the light of what has happened to the Family Law Act.

  363. I wanted to ask you about that because I was particularly interested in the Family Law Act and I was behind many amendments to that Act which were trying to promote the whole concept of mediation which apparently is now in a state of collapse. However, we still accept proposals, do we not, under the Family Law Act that a divorce should not be finalised until these matters of maintenance are settled, so I just wonder, if your ideas were adopted, whether we are talking about a hugely expensive process? After all, if we are talking about people getting divorced, everybody is going to the court anyway and everybody, as they get divorced, is talking in terms of access, custody, and potentially about finance as well. Could we not put much more emphasis on these matters in the divorce process?
  (Professor Bradshaw) No, I do not think it is radically different. The people who are not covered by the CSA are already settling their maintenance arrangements privately in the courts and registering their agreements with the courts, and they are not just settling maintenance and child support, but they are settling capital, access, property and that is the system which, because of the failure of the CSA, we have left for those people who are beyond the scope of means-tested benefits. What we are proposing to do with these reforms is to emphasise once again a distinction between agreements about child support and agreements about all those other things. Separate institutions are going to be doing the work and drag some people who are presently getting settlements in the court back into the CSA system, in jeopardy once again of the success of a formula-driven child support system. No, I do not think it is a big step to send the kind of maintenance responsibilities back in to the courts with some of the skills learned from the CSA and lessons learned about enforcement and collection.


  364. Going back to something you said earlier about trying to work out what the proportion of budget is spent on the upkeep and maintenance of children, is it your view that the Family Budget Unit has done the best and the most accessible work that would give us some kind of feel for that? Is there any other body of evidence that you know about which would help us work out whether the 15/20/25 per cent fixed formula addresses the costs adequately? Have you a view about it?
  (Professor Bradshaw) If you ask the academic community, you would get equally arcane and different answers from economists and social policy academics and nutritionists and so on, but I am an advocate of the power of budget standards for setting standards of living and I think that the work that was done on the cost of the child is very authoritative and because it has the value of being very flexible. If a person decides that what is included in the cost of the child, is not right, it can be changed. It is not a scientific process, it is a very boring kind of clerical process of costing what children need, although it does provide a useful mechanism for assessing the cost of the child. It is not the only work and there are other ways of doing it.

  365. I think we may as a Committee decide that we might try and get them to submit some evidence on the background to that recommendation. Just a final question from me, changing the subject slightly, which is that we are picking up some nervousness about the transitional process from the current system to the new system and the Minister was quite clear when she said that she was not going to put the existing cases into the new system until she was sure that the new system was efficiently operating. Are there any kind of academic tests that you could set that would give some satisfaction or some confidence that the new system was working before you took the leap of putting the present cases into it? Is that an impossible set of questions to answer, to be sure that you were not actually going to suddenly, or you would not do it suddenly, but you would start feeding it through, but that the existing cases could then be merged into the new system?
  (Professor Bradshaw) Can I try to answer it rather tangentially. One of the things that the Department of Social Security has been doing more of recently is experimenting and having trials and it seems to me that this scheme, if it goes ahead more or less on the lines being proposed, is a prime candidate for trialing and having a systematic evaluation of the trials, so that would be the kind of source of evidence on whether it was working. Going back to my special pleading about research, there was no systematic evaluation launched of the child support scheme whatsoever. Those people who have done the research on it have done it kind of by chance really and it would be a very good thing for the next tranche of policy in this area to be monitored more carefully.

  366. How long would it take to do really well, really professionally and assess it? How long would it take?
  (Professor Millar) I was going to make the same point about piloting and trying it out in different areas. You would have to be very clear about what you were looking for in terms of success measures, as it were, so how you were going to decide what was successful. That does not mean that you could not make those decisions and pilot the scheme and test it out in twelve months.

  367. And have the results in twelve months?
  (Professor Millar) Well, it depends, but you can begin to look at what difference it is making in terms of getting payments.

  Chairman: We could continue this for the rest of the week, I am sure, but that has been extremely valuable and I am very grateful to you both and your efforts will inform our process really extremely well. Thank you very much for your time and for your appearance.

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