Examination of witnesses (Questions 520
- 531)
THURSDAY 16 SEPTEMBER 1999
BARONESS HOLLIS
OF HEIGHAM,
MRS FAITH
BOARDMAN and MR
MIKE STREET
520. Will that apply even given the introduction
of the working families tax credit?
(Baroness Hollis of Heigham) The statistics will change,
but clearly there most of the people on WFTC will not be the men,
but 50 per cent of those on WFTC will be lone parents themselves
and they will not be the men who are paying. Yes, obviously in
theory, but even there it is paid through an employer and there
is no suggestion necessarily that this would be paid through the
wage packet, so you would have to develop a different and distinctive
way of moving the monies across. It would affect the figures,
that is certainly true, but you would still have to do it in a
different way because WFTC, as you know, is paid by the employer
in the wage packet with the calculations done by the employer,
whereas under any system that the Inland Revenue have, there would
be no possibility for the employer being responsible for putting
maintenance payments into her pay packet if she were in work,
so we would have to have a different system. We could not use
the WFTC system to carry payment of child maintenance to a lone
parent even in work, or I do not think so at any rate. We can
obviously pursue this, but certainly that is the advice I have
had.
521. The second area I would like to explore
a bit with you is the exceptions to the new formula and some of
those who have given evidence to us have said that given that
the new formula will be rigid percentages, there has to be an
efficient and effective departure system and they have criticised
the fact that in the White Paper the gateway to the departures
has also been narrowed. I would like your comment on that because
we have had some who have said that the tribunal system can cope
with dealing with more cases and that perhaps the courts could
deal with more complex cases, but there has also been some concern
expressed at the flexibility to be allowed to CSA staff in looking
initially at whether or not there ought to be a variation on the
formula, so I just wonder if you would like to comment on those
areas.
(Baroness Hollis of Heigham) Our approach has been
that if we are taking a complexity out of the basic formula, we
do not want to reintroduce it again at the level of departures
because all you do is push the pressure somewhere else and push
it on to the tribunal system, in which case it will again go into
a black hole. What we have basically said in the White Paper,
and I think this was supported in the consultation exercise, is
that there are essentially two grounds for going for a departure.
One is where there is some evidence of fraud, that is, he is misrepresenting
his income, there is undeclared income, there is substantial private
income, or he is self-employed or whatever, so it is fraud and,
therefore, the tribunal system is well skilled at trying to get
to the facts and can give broad-brush statements, like, "You
are living a lifestyle as though you are earning £500 a week
even though you have only declared £200 a week and, therefore,
you will pay maintenance as though you are earning £500 a
week". The second ground for departure will be child-centred
where the formula is such that it undermines what we are trying
to achieve which is child support, so this means the exceptional
contact costs, for example, it might mean extra costs for a disabled
child, issues like that, and where they come into play, then it
would be reasonable for the non-resident parent to seek a departure.
They will be exceptional and it will not be, for example, his
new housing costs, but it will simply be the costs associated
for him in helping to support that first child. That is the basis
of the departures and obviously what we are hoping is that because
of the three-step procedure they will be able to explore any problems
or misunderstandings at the face-to-face level. Now, the role
of the staff will be that where the grounds for seeking a departure
are objective, in other words, the information is agreed and he
does indeed spend X on travelling because he lives in Newcastle
and the child is in Norwich, then it is stupid to go to a tribunal
and wait 20 weeks for that to be determined and an experienced
CSA official can say, "Yes, that means there is an offset
of Y". That is the level of "discretion", although
it is not actually discretion, but it is saying that similar cases
which meet the guidelines for departures which are based on objective
information of that sort, like the contact costs, can be sorted
at the local level, in other words, where both parties are likely
to agree. However, where there is a dispute which is likely to
arise over his income, for example, he is declaring X and she
is saying that actually he should be declaring Y and he is self-employed
and she actually did the books, so she knows, that is the sort
of case that we would expect to go to the tribunal. Therefore,
I do not actually see a problem about the discretion of departures.
If it is information based and there is basically broad agreement
about the facts, there is no point in going to a tribunal, but
it can be sorted locally. If it is a matter for debate, it goes
to the tribunal, and the two grounds would be fraud, on the one
hand, and, as I say, costs associated with supporting the child
which should influence the level of the formula on the other.
Mr Swayne
522. The Agency will deliver rough justice which
normally is better than no justice at all, but, nevertheless,
those who would prefer a better quality of justice will seek to
make different arrangements, as already many do, but in the future
more will be able to do so. Is it the intention of the reform
to reduce the caseload of the Agency in that way and was it the
intention of the reform to introduce this principle of less eligibility
for those people who find that their circumstances require them
to throw themselves on the state as far as child maintenance is
concerned?
(Baroness Hollis of Heigham) What we are saying and
what the current law is and what we continue to propose is that
where there is the taxpayers' interest, that is somebody is receiving
income support, those cases must come to the CSA and their maintenance
will be determined by the formula as proposed. For everybody else
it is an option. In other words, all of the family credit cases
now become private cases. I think in practice there will be a
certain amount of drift. If someone starts off with the CSA and
goes on to income support and she then goes into work and gets
working families tax credit, in practice she is likely to stay
with the CSA, I suspect, although she does not have to, but she
can do. If the couple choose not to use the CSA, they are a private
case, and they come to voluntary arrangements which are mutually
satisfactory to both sides, in other words, there is more maintenance
in kind and less in cash and she is content with that, we do not
get involved at all and that is up to them. CSA for private cases
is only there as a failsafe, as a last resort, where they cannot
agree or where maintenance is faltering. Even then they have to
give notice, as we said, if there has been a court settlement,
to come to the CSA. So insofar as the CSA wins private cases because
of the quality of the service, I will be cheering them on, insofar
as the CSA wins private cases because there is increased hostility
from parents, I would be very sad. What we are seeking to do is
to try to make that movement across the benefit line as smooth
as possible, by trying to get into lawyers' heads that because
a private case could come to the CSA on grounds of future hostility,
they would be wise to use the CSA figure as the benchmark for
their child maintenance settlements and that should, we hope,
reduce aggravation in the future.
523. But the Family Policy Studies Centre are
concerned that the arrangements for shared care produce an incentive
for fathers on purely economic grounds to seek care for their
children which hitherto they have expressed no interest in. They
say this is something which needs to be monitored. Is it not something
which needs to be prevented and avoided?
(Baroness Hollis of Heigham) I think we have conflicting
evidence on this. I think the Committee has heard conflicting
evidence. On the one hand, Families Need Fathers say, "There
is not enough financial support for fathers who are taking on
the care of children", the other evidence which you quoted
is that that creates too much financial incentive. We are trying
to get out of people's lives. We are saying, "It is up to
you and ultimately the courts as to what contact and access arrangements
you negotiate, but if you do and if he is properly taking some
financial responsibility in his own home for the care of the child,
it is proper and decent that his maintenance should be abated
to reflect that." Insofar as that is an encouragement for
him to have the child every other weekend and so on, frankly I
would be very pleased. I think children do value their father's
contribution to their life and I think they have a much better
life as a child if that can happen. But it will only happen and
the courts will only agree to it if those relationships are decent
and civilised. If there is any risk of impropriety or violence,
of course that will not happen. The amount of abatement for the
parent with care will be one-seventh of the notice, and it is
a judgment whether you think we have that about right. At the
end of the day what matters, I have to say, is not whether he
is worse off or better off, or even whether she is worse off,
what matters is the well-being of the child. In our view the well-being
of the child is best served by having financial support and, as
far as possible, the emotional support of the father, and that
is made more possible by some contact and access. If we can help
by having a decent abatement of maintenance for the parent which
is in the best interests of the child—and all the research
says it is in the best interests of the child—that is what
matters.
524. Finally, the Centre also are concerned
about the balance between the rights of the first and the second
family, and they imply that you have got that balance wrong, that
your slight preference for the first family is not strong enough,
and that the arrangements for the second family are really rather
generous, particularly on the basis that they say the evidence
always points to the fact that the first family is the one which
is in real danger of being in poverty rather than the second where
the father is resident. Those are economic concerns. I have an
additional concern which is the normity one. Should not the incentive
clearly be to give a powerful message that if people take on other
responsibilities they ought to, before they do so, consider whether
they can afford those responsibilities and not expect those additional
responsibilities to be able to diminish what they have to pay
out on account of their existing responsibilities?
(Baroness Hollis of Heigham) I take much of that last
point. I think it is right that, just as in "intact"
families, parents decide what additional responsibilities they
can take on—another child, a new house—in the light
of their financial circumstances, fathers breaking up from a relationship
should, knowing through easy access to the tables what they may
be expected to pay for the child, then enter into any other arrangements—housing
costs, a new car, loans, whatever—in the light of that information.
That is absolutely right. We are treating him as grown up, frankly,
and expecting him to take on these responsibilities. On the broader
point about the balance between first and second families, I think
we are re-visiting some of the points Andrew was rightly pressing
me on. All I can say is that Jonathan Bradshaw, who speaks with
the voice of somewhat angry non-resident parents actually—there
is a lot of pain there—and Families Need Fathers say one
thing, that we are not being generous enough to second families,
and NCOPF and Gingerbread say we are not being sufficiently generous
to first families, and the Child Poverty Action Group and NACAB
to some extent say that both families are poor and there is not
money in the family to support two families. I think all three
positions to a degree are correct and what we have had to do is
get that judgment right. We made a conscious choice that we would
not, in terms of looking at second families, seek to impoverish
one set of children at the expense of another set of children,
because at the end of the day the taxpayer can and necessarily
will come in and support a lone parent on income support or a
lone parent going out to work on WFTC. We thought it was no kindness,
equally, to put such pressure on second families that they in
turn broke up and produced a new set of lone parents and a new
set of problems. You may judge that we have not got that balance
right, but all I can say is that we have agonised over that issue
over the last two years, trying to get that balance right. We
hope and believe we have, the consultation exercise suggests we
have, but certainly there are at least three view points out there,
both the fathers and the mothers and some of the poverty groups
who worry whether a lone man can sustain two families anyway out
of low pay. These are dilemmas which I think will be familiar
to many of you around this table wearing your DSS hats, so to
speak.
Dr Naysmith
525. One of my questions arises out of what
you were saying a few moments ago about tribunals. A couple of
the witnesses here made the point that other changes in government
means it is much more likely there will be one person tribunals
in future and they thought this was not appropriate for single
mothers in difficult circumstances facing a male authoritative
figure, and they were suggesting there should be at least two,
maybe three, in these cases. I know it is not your direct responsibility
but is there anything you can do to look at that?
(Baroness Hollis of Heigham) I handled that DMA Bill
and there was obviously a lot of debate about whether there should
be one, two or three person tribunals, and what the Government
agreed—and I was very pleased they were able to agree—was
that the chairman of each of those tribunals should be legally
qualified, which means that if you are dealing with a one person
tribunal that person will always be, as far as I am aware, legally
qualified. That is why I think that the ring will be fairly held
between the competing parties, but clearly there is an appeals
system and if either side feels that has produced unfairness,
they can go on to appeal. But we are monitoring this because the
Government gave a commitment. It is not the Government which determines
which cases go, it is the President of Tribunals who gives guidance
as to which cases go to one person, two person, three person tribunals.
Disability cases, for example, where you need medical experience,
will have two people—a legally qualified person and a medically
qualified person. If we find in the light of experience that your
worries are valid, and they could be, obviously we will be seeking
discussions with the President of Tribunals to see whether we
should change those guidelines.
526. Thank you. The other question is probably
more directed towards Mrs Boardman. There still seems to be a
little unhappiness in the staff of the Agency, there is still
a high level of sickness I understand and also staff turnover
is still about 25 per cent, and going into a new system we want
to make absolutely certain that we have the best possible staff,
that they are well-trained and happy and looking forward to the
challenges. How do you propose to make sure that happens?
(Mrs Boardman) I agree absolutely. It is a very important
factor. It is undoubtedly the case, I think, that our staff have
withstood a great deal of difficulty and often working in quite
stressful situations, as you will appreciate. I have a great deal
of sympathy for them and also a great deal of respect, because
I think they cope amazingly well considering the difficulties
they have. Their commitment to get the job done never ceases to
amaze me. I think there are a number of practical things which
we can do and which we are doing. A number of them are around
how we train staff, a number are around how we communicate and
involve them, which we are seeking to do far more than we did
a couple of years ago.
527. We had some scare stories about the training
they got in the early days before they were sent off.
(Mrs Boardman) Training, I think, in the early days
particularly was very difficult because the formula was new to
everybody. Many of the staff, as you will know, in the early days
were new to employment, certainly new to the Civil Service, and
there was not the time or the ability to give them the full range
of training. I think that has improved quite significantly and
the feed-back we get from staff attitude surveys and other focus
groups with staff do generally acknowledge that, although we would
still like to give them more training in areas of customer handling
and telephone skills and some other aspects of that type which
we would be able to do once we are freed from the necessity of
giving them weeks of technical training on the formula. I think
another key issue for staff is pay and the recognition that brings.
Certainly the evidence again from exit interviews and from staff
attitude surveys is that pay is actually the main determinant
of how many choose to leave. Obviously that is an issue which
is not entirely within the Agency's control but I think it is
an important one.
Chairman
528. May I ask two very brief, tail-piece questions.
The first one is, I do not know about my colleagues but I was
a bit concerned there has been some pretty colourful language
coming out of No.10 in the recent past about enforcement against
18 year olds or under. At the moment, as I understand it, enforcement
guidance does not pursue people who are under 18 years of age
and there is nothing in the White Paper about it at all. Is this
something politically which is in ministerial minds?
(Baroness Hollis of Heigham) The working assumption
is that you pursue for maintenance when there is an income to
be pursued, and that for most people under the age of 18 is minimal,
in the same way as it is for students, and I make that analogy.
Equally, of course, the child continues and if you have a child
at 14, 15, 16, 17, you may at the age of 26 be in an adequately
paid job and you should be contributing to that child. Maintenance
can only be levied on those who have income.
529. But if you are a 14 year old father and
you get an interim maintenance assessment under the current scheme
which is imposed when you are 25, you will need to be pretty rich
to be able to start paying it.
(Mr Street) As the Minister says, you would bring
that father into the scheme when he had income on which to make
an assessment. You would not make an assessment at the point when
he was 14.
530. I am very nervous about that.
(Baroness Hollis of Heigham) It has to be understood
in terms of trying to get youngsters to realise that there are
long-term consequences for irresponsible sexual activity which
results in a child. I think it was in that context. Just because
you may be under 18, it does not mean when you are 25, 26 you
can have had three children as a teenager and not pay for any
of them. I think it has to be understood in that context. The
right answer, obviously, is sex education.
531. I do not mind the headline, I just do not
want to see the legislation. Finally, when I started this process
I was under the misapprehension that the Social Security Advisory
Committee—and this takes us right back to where we came
in—had responsibility for secondary legislation which embraced
the whole corpus of social security law, but in fact I am now
better informed and am told that it does not. So we cannot have
confidence in the SSAC, who have a very expert body of people
with great expertise and the confidence of the community which
is interested in welfare matters. Would you consider setting up
some sort of equivalent? I do not want more bodies for the sake
of them, but is there not a case for either getting the SSAC brought
into the picture and given the locus in this area or indeed
maybe setting up some free-standing advisory committee to deal
with child support law? The regulations are very, very important.
(Baroness Hollis of Heigham) I agree with you the
regulations are very important and that is why there has to be
parliamentary debate and scrutiny. My understanding is as yours,
that because this is family law it does not go to SSAC, as opposed
to benefit systems which do. That is the distinction. On the wider
issue of how therefore you get continuous scrutiny, I am very
happy to take this back to my Secretary of State and discuss it.
I do think that affirmative regulations are being debated. If
you, as a body, wish at any time to bring us back to discuss some
of the import of this, we can. We have, I believe, an acceptable
degree of scrutiny, whether we should increase that and whether
you would recommend we should increase that, we can obviously
consider.
Chairman: That is extremely useful. Just for
the record, so people understand we have been earning our pay
in the last two days, the Committee has seen 16 groups of witnesses,
including 29 separate individuals, since you were last here, and
received about 40 written memoranda, 41 now with the DSS reading
list of research. It has been a very, very instructive experience
for us and very useful and it has been considerably helped by
your participation in it. We hope to be able to produce a report
by the end of November because we understand there is an element
of urgency about this and it is important. We are very grateful
to you and your officials for all the participation you have had
in the process to date. Thank you very much for your attendance.
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