Select Committee on Social Security Minutes of Evidence

Examination of witnesses (Questions 520 - 531)



  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.


  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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