Select Committee on Social Security Minutes of Evidence

Examination of witnesses (Questions 500 - 519)



  500. Can I come to the transitional arrangements? We have heard evidence from the PCS, and obviously we put questions to you, and we had evidence today from the CAB, that having two sets of cases side by side, the new cases and the current cases, will produce a nightmare both for staff and for those trying to advise CSA customers, and that the lengthy transition period seemed to be a contribution to that. What I seemed to get from the evidence is that people would rather see the system if necessary delayed somewhat if it meant that you could have a much shorter transition period, but I wondered what thought you could give to that bearing in mind all the difficulties which could arise? In particular, I think the point is this, that people now have had expectations, particularly those already on child support, substantially raised by the Government's announcement it is going to radically tackle the difficulties of the CSA, yet some will not see any benefit or change for many, many years, and it will turn out to be a damp squib and disappoint their expectations. Have those factors been taken into account and has any thought been given perhaps to slowing the process down to try and get the transition period shorter?
  (Baroness Hollis of Heigham) We have obviously thought about this. We are doing trade-offs here, as I think the Parliamentary Ombudsman was saying; there are real trade-offs here. All of the advice I have got and all the history of social policy suggests that big bang approaches are jolly risky. Even if there was not the issue of the IT system, which there is, all the social research suggests that if you can get pilots and so on and so forth so that you learn and can adjust and so on, you should. Now, we are not doing pilots obviously because that would be improper in all sorts of ways and we would have to get primary legislation for it and so on, but what we are saying is that by taking new cases first, which are clean and simple, then if there are teething troubles or if there are issues about staff training, we can learn from that before we roll it out. We actually think it is wise administrative policy not to go for big bang even though I accept that the trade-off of that is that there could be political difficulties. The second point I would make is that even if we went for big bang, given that we feel morally obliged to go for phasing, although the staff do not like it because it is too complicated, it would still, even if we went for big bang, be the case that existing cases might take three years or four years or five years to be on the identical figure with the person next door. As to why we go for phasing, it is because obviously he may find his contribution going from £30 to £60 on the same income, or that, as a parent with care, she may find her income dropping from £60 to £30 overnight, so you have to phase it so that people can adjust their expectations as their own wages and financial circumstances change, so even if we went for big bang, we would still have the problem of phasing and we would still have that political problem and the administrative risk would be extremely high. We are aware that there is a real downside to it and I am not trying to minimise it, but, on reflection, we thought it was wisest to go for a two-step process.

  501. I understand the point about phasing and I think that is more easily sold to the customers in that at least they can see progress being made in whatever direction and they can see that their case is actually being looked at again and reassessed even if it is on a phased basis, but the point put to us by the PCS was that the Department was being rather unambitious in the time-frame in that they seem to think that the transition phase could be dealt with within about a year rather than the five years which have been predicted. They are wrong, are they?
  (Baroness Hollis of Heigham) No, I think that they may be confusing transition and phasing. Transition is going from the old system for existing cases to the new system for existing cases. And then on top of that there would be a phasing for existing case individuals which could be up to five years according to the discrepancies between what they now pay and what they would pay. Clearly it is administratively simple in some ways for the staff to handle if everybody is on it completely from day one, but the costs of that to family dislocation of both men and women and children were unacceptably high, so that ballpark figure for transition of a year may be one of the figures we are talking about as the difference between new cases and existing cases. It could be different from that, but we do not yet know. When we are sure that we have unglitched any issues that come up through the new cases, then we will take on existing cases, but phasing, as I say, will continue either way, whether it is big bang or not.

  502. The last of my questions is on the issue of staffing and, in particular, the face-to-face staff availability. We have had quite a lot of evidence questioning whether the figures that we have been given for the additional staff trained to do the face-to-face work are adequate. Perhaps you could, by way of example, indicate to me, for example, how many staff will be available to do the face-to-face work in London and how accessible they will be to, say, my constituents in Hendon?
  (Mrs Boardman) I think in terms of individual regions that would be most easily answered by my putting in a note, but in general terms, as we told you on Tuesday, we will be having 600 by the end of March. We do not have 600 as we speak because we are still rolling that system out and it will not be completed until March, therefore, the situation as we speak varies quite considerably between different areas of the country. The general principles that we have taken are that we will be moving to some 86 sites throughout the country and those have been chosen carefully so that they are very accessible both in terms of anybody wishing to come in for an interview, but, more importantly perhaps, in terms of our staff going out for interviews because the objective and the way in which we intend to operate this is very much for that force of 600 people to be peripatetic, to be available from all 400-plus benefit offices, to potentially use Employment Service offices as well, to potentially use citizens advice bureaux and other such premises and to be available to go to people's homes if that is appropriate and if it is necessary from the customer's point of view. So instead of asking people to come in, as we have done up to now in the limited number of cases where we have allowed interviews, to something like 200 sites, we will be having a service which is available in all 400 benefit offices and in a whole range of other environments as well and we have equipped those 600 staff deliberately with lap-top and other mobile IT support so that they can do the full service when they are away from their home base, which we expect them to be for a good part of the time.

  503. So if I were to ask for an interview with the CSA face to face, if I were a lone parent or a father worried about the assessment, how long would I expect to wait for an interview appointment?
  (Mrs Boardman) We have set service standards where if somebody rings into one of our main six centres and requires or requests an interview, we will make sure that the local officer who will be doing the face-to-face interview arranges that within two days of the request and that it takes place within ten days of the request. We managed to meet those targets very comfortably in the pilots. I know those sound fairly long—
  (Baroness Hollis of Heigham) Don't say that!
  (Mrs Boardman) Well, by my standards they are fairly long, but the experience of the pilots was that actually that was very much for the convenience of the customer because some 75 per cent of our non-resident parents are working and they need to arrange time off from work and ten days was felt to be about right.

  504. Are the interviews time-limited?
  (Mrs Boardman) No, they are not, no. We find quite a variation, it is fair to say, certainly in the pilot data.

  505. If I am a member of an ethnic minority or have other communication difficulties because I do not speak English or I am hard of hearing or whatever, what facilities are available there?
  (Mrs Boardman) That varies. If you are Welsh, we have a dedicated unit of Welsh speakers. If you are of other ethnic minorities, then it depends very much on the staff mix of the local office and that reflects the neighbourhood in most cases. There are some instances where I think we still have a problem with that and we will try to work on that in our recruitment policies.

Mrs Humble

  506. Yesterday my recollection is that the union told us that you were going to be closing down 120-plus local offices and centralising the 600 new people.
  (Mrs Boardman) No, there is a confusion there.

  507. Exactly, so can you please clarify it. You are talking about 86 sites, so what are these 120 odd that they were talking about which were going to be closed?
  (Mrs Boardman) Previously we had a field force of something like 2,500 spread amongst 200 sites and the large majority of those, 95 per cent of them, were doing clerical processing, but spread throughout 200 sites. We are taking all the clerical processing work out and we are putting them into about 18 or 19 large satellite processing sites which are spread throughout the country outside the big six CSA centres. Because that can be done a lot more efficiently in larger numbers than in these little 200 offices, we can free up sufficient resources to create a new force of 600 people and those 600 people will be spread throughout the 86 sites, but will be very peripatetic, as I have explained before.

  Mrs Humble: We need to see a map.


  508. You very kindly offered to give us a note.
  (Mrs Boardman) With pleasure.[13]

  509. The rumour in my area is that the nearest local face-to-face office is situated in Irvine, which is on the other side of the country, 127 miles away from Eyemouth, and that is causing some consternation. If you could do us a note that would be extremely useful.
  (Mrs Boardman) Yes, of course.

Ms Buck

  510. Somewhat at the other extreme, representing a constituency which has people from Angola to Zaire and all points in between, we must make sure there is a full range of ethnic languages available to interpret.
  (Mrs Boardman) I understand the point but there are practical difficulties.

  511. It is an increasing issue with a large refugee community.
  (Mrs Boardman) I appreciate that.

  512. A few points on disregard. You rejected the conclusions of Jonathan Bradshaw—although I have to admit I found Jonathan Bradshaw's evidence yesterday very powerful—on perfectly sound arguments that the past failure of the court system and the scale of demand which would be put into it means the court system would be untenable to manage. His research really challenges the assessment of compliance because of the case he makes that unless it is individually tailored and perceived by men to be fair, nothing you are going to do will get them to comply. I just wanted you to comment on that. Your conclusion seems to be based on the fact that you will boost compliance by the twin argument of greater simplicity and the fact that money will be seen to go to the mother. Does that not really boost the argument that we should be looking at the introduction of disregard now and as quickly as possible and for all clients if we are actually going to create a culture over the coming years and through the transitional period whereby men actually see the direct benefit to their first families?
  (Baroness Hollis of Heigham) Jonathan's recent research over the last three or four years has primarily been on the situation of non-resident fathers as opposed to lone parents, and a lot of his stuff has been reprinted in the NACSA newsletters and so on. He is arguing that either fathers do comply in the sense of informal care or, alternatively, they cannot afford to pay. We have serious questions, and have had elaborate correspondence with him, about the statistical validity of a lot of his research. I will not trouble the Committee with that but there has been quite a lot of academic exchange. For example, he will describe as a loser someone who is made to pay for the first time who has not been paying, he regards that as a downside. He says there are so many men losers, but by "loser" Jonathan means people who have not paid when they should, including people who are going to be paying £5 a week for the first time. There are philosophical problems here as well as research and statistical problems. As I say, we have engaged on this and discussed it and I understand where he is coming from but I still do not accept quite a lot of findings on that. To go back to the basic point, to what extent do I think compliance will come from the maintenance disregard and why are we not doing it earlier in order to make the introduction of the new system simpler, there are a couple of points. Firstly, we are not saying that the maintenance disregard is the solution for compliance of fathers. We do think it would help to ensure the compliance of mothers. At the moment we have something like 70 per cent of the fathers and 70 per cent of the mothers reluctant to co-operate with the CSA because mothers perceive the CSA as representing all hassle and no cash. What we are seeking to do is to get her co-operation so we can identify who the father is, because in something like 40 per cent of cases the father is not easy to identify, we do not know his address or employer, and we need her help so the maintenance disregard will help there. We hope it will have a spin-off to the father, he will see some of that money going to the children as opposed to the Treasury. But essentially we see compliance because the system is simple, he can see the tables at the back, he knows what he has to pay, he is paying what we hope he will regard as a reasonable sum and that people on the same income will be paying the same as he, and that the staff will have the resources to work with him so if there are any problems about his financial debts or something they can refer him to the CAB for financial counselling. A lot of our non-residential fathers are very young, their lives are pretty chaotic and they are not necessarily in steady work, divorced men find it much easier to cope with the situation than some of the very much younger ones. So we are hoping we can increase compliance in that way, we are not saying that maintenance disregard is the main solution for fathers' compliance, mothers' co-operation and child poverty. Having said all that, why are we not introducing it now? This is a package. It is a package which goes with simplicity, it goes with reduced levels of assessment, it has greater weight for step-children, it has the £10 maintenance disregard. It is a package. Though we are trying to improve customer service we do not think it is appropriate or prudent or financially right to bring forward all the costs which are quite heavy associated with maintenance disregard independent of the simpler formula and the increased compliance raising cash full-term. Obviously lone parent groups and the CPAG and so on would very much like us to bring it forward and they would like us to raise child benefit and other things, but the deal that we negotiated with the Treasury was a package deal which was cost neutral and that means that the maintenance disregard in my book has to come in with the full package. Parliament obviously can over-rule that but that is what we are going to be proposing.

  513. So it is driven really by the fact that you have negotiated a cost for the entire thing, even though it may well be that a combination of greater compliance for people in the existing system and the cultural change and greater tolerance and acceptance of the Child Support Agency amongst existing clients and people looking to the system might be boosted if you were to use the disregard?
  (Baroness Hollis of Heigham) That is the judgment we have made but, as I say, if Parliament disagrees with that judgment, we will obviously think again.

  514. We have had some representations from organisations that it would be better to raise the disregard to £15, bringing it in line with the housing benefit disregard. Have you done any calculations as to the potential impact of setting (a) the £10 and (b) the £15 disregard and how that might help with compliance?
  (Baroness Hollis of Heigham) We know the cost, it is an extra £35 million if it is £15 and £60 million if it is £20. That means therefore, given this is a cost neutral package—and this is a commitment to the taxpayers—we would have to find additional resources elsewhere. Originally, one of the reasons we had the lower figure was that family credit had a £15 disregard and now of course we have the whole of the maintenance under the WFTC disregard. So we were worried originally about the question of incentives which was raised in the Nuffield contribution today. Our judgment is that £10 is a valuable boost to low income families, obviously £15 would be better but £15 carries a cost and the argument, frankly, is pretty much identical to that which one would debate for child benefit levels or any of the other premiums on income support. It is a judgment about appropriate cost.

  515. As disregard is partly about compliance, particularly for mothers, I would have expected you to do some calculations on what the relationship would be between the amount of the disregard and the—
  (Baroness Hollis of Heigham) But the comparison would have to affect the father. We have no research which shows—and certainly the American research does not show—that by having the disregards for her that his rate of compliance goes up. It may do. His compliance is more likely to go up—although he may be influenced by that—because the actual level of assessment comes down and the staff build up the compliance expectation with him. That is where we expect compliance to be. I should say on co-operation with lone parents, we have also protected "good cause" as a result of pressure understandably from groups concerned, but we are also simplifying some of the administrative arrangements around that so it would be much easier to bring lone parents into the system at the point at which they first go on to benefit.

  516. Some representations were also made on turning the disregard into a guarantee which the state has a hand in.
  (Baroness Hollis of Heigham) Again we looked at that and as far as I am aware this is not done in Australia, New Zealand, Canada and the States. It is done in the continental models—France, Germany and so on. The problem is that it effectively becomes an addition to benefits and not maintenance and compliance actually falls. The evidence I have is that in France and Germany compliance is in the 40, 45 per cent figure where there is guaranteed maintenance. So, firstly, it turns what should be maintenance, him to her for their child, into a benefit paid by the taxpayer, which is clawed back from him if the CSA can get it. Secondly, it does not help compliance, it actually reduces it, and the Europeans are having to forget all about it. Thirdly, the cost is really quite high. The estimates we have done are anywhere between £300 million and £400 million up-front of debt that other parents would be carrying and we do not see why that should be the case. This is separate from the benefit system and we should use the CSA to do it rather than have this as an addition to the benefit system. That is our belief.


  517. I wonder, in passing, whether it would be easy to get copies of your correspondence with Jonathan Bradshaw about winners and losers. Is it possible to get those?
  (Baroness Hollis of Heigham) The letters that I sent to Jonathan were only engaged on the basis of what he was asserting. We were challenging some of his assumptions about losers and so on, but, as I say, I would not necessarily start from Jonathan's premises. Obviously I want to be as helpful as I can on this.

  518. I am less interested in that.
  (Baroness Hollis of Heigham) Can we reflect on it to see whether we can be helpful on this?

  Chairman: Yes, certainly.

Mrs Humble

  519. You will be pleased, Chairman, that many of the questions that I was going to ask have been asked and very fully answered, so I am down to the clarification of two issues. In your initial presentation, Minister, you mentioned and developed the response as to why you have rejected the court-based scenario. You mentioned in passing, but did not elaborate on, why you rejected the Inland Revenue taking over the function of the CSA and that has been an issue that has been raised with us by several of those who have given evidence. Perhaps you could just tell us what you considered?
  (Baroness Hollis of Heigham) Again when we did our first years of research, this was one of the options that was clearly available to us, and the point is that the Inland Revenue is not geared up to distribute money to people who are not taxpayers. Seventy per cent of our clients do not pay taxes. Secondly, the Inland Revenue in the past at any rate has not been geared up to making cash refunds as opposed to transferring monies through the pay packet on a weekly or monthly basis to people who are not in the tax system. Therefore, given that and given, thirdly, that something like 250,000 non-resident parents, fathers, are also on income support and are, therefore, outside of the tax system, it means that the current tax system only reaches a fraction of the CSA clientele and, therefore, to put in a system or to ask the Inland Revenue to extend its activities not only to the quarter of a million non-resident fathers who are on JSA and benefits and so on, but also to the 70 per cent of our lone parent caseload who are not paying taxes seemed not to be appropriate.

13   See Ev. pp. 202-3. Back

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