Examination of Witnesses (Questions 48-59)
PROFESSOR NICK
WIKELEY
21 JULY 2004
Q48 Chairman: May I welcome our second
witness of the morning, Professor Nick Wikeley, who is from the
University of Southampton? It might be helpful if you just said
a little bit about your own work and position. We have the advantage
that we know of your distinguished career and experience on this
subject, but for the record, so that it is all captured, it might
be useful if you were to say a little bit about your work and
where you think the issue is going, because professionally you
have spent a lot of your life looking at Child Support Agency
matters and in an international context too. If you could start
by doing that, it would be helpful and then we have some questions
to address to you, if we may.
Professor Wikeley: My name is
Nick Wikeley. I am a Professor of the Law at the University of
Southampton. I was previously an academic at the University of
Birmingham. I have been involved in academic study and research
into the work of the Agency since before its inception. I can
remember training lawyers in 1992 and 1993 about the introduction
of the 1991 Act. I have also co-authored a book which was based
on empirical research carried out in the mid-1990s, Child Support
in Action and more recently, in 2000, I was commissioned,
along with a number of colleagues, by the department to conduct
a client survey on a large scale and that was published in the
DWP research report series. I am currently working on a new project,
writing a book on child support law and policy, which is being
funded by the Leverhulme Trust. In terms of general opening remarks,
I appreciate the Committee's main focus is compliance and enforcement.
I should like to make four points about this. One: `twas ever
thus. If I may just quote this, it says "It was easy to get
an order made against a putative father for a weekly contribution,
but unless he was a man of property or position its enforcement
was quite another matter". That was Beatrice and Sydney Webb
writing in 1927 about the Poor Law. So: 'twas ever thus. The second
point is that enforcement is an endemic problem in the civil justice
system. It is not unique to child support. Anyone with any experience
of the civil courts knows that it is relatively easy to get an
order. You can do that as a lay person. Enforcing it is quite
a different matter. The third point is that we are necessarily
dealing with perhaps some of the most intractable cases in this
area. Many civil orders are simply contractual disputes, no real
emotions are involved, but obviously the Child Support Agency
is dealing in a very different environment. We are dealing with
particularly difficult problems in many cases and that has been
recognised by the Family Division in their own work, for example
in enforcing contact orders. The final point I would make, which
is about compliance—I accept everything Jodi Berg was saying
earlier in terms of improvements in service having an effect on
compliance, but compliance is a much bigger issue than that. There
are many other issues which affect compliance. We know, for example,
that people's relationship status will affect compliance. What
their relationship was in the relationship which has now broken
down and any new relationships they have are all factors. There
is a wider range of factors, many of which are completely outside
the Agency's control, which are going to impact on compliance.
Those are my four points and really a plea for realism. May I
also pick up on a point Andrew Selous made about the disparity
between the cash compliance and what you might call case load
receipts? I think the answer may partly be this. It may be that
there are large numbers of relatively low level orders and compliance
is poor on those. Cash compliance relates to the total amount
of child support which should be paid and you are told 73% is
being paid. There may be a large volume of parents with care whose
non-resident parents are also on low incomes and those sums simply
are not being paid.
Q49 Andrew Selous: So it could well be
correct—and I shall go back to check the Parliamentary Answer—that
70% of parents with care are either getting nothing or less than
they should in terms of number of parents with care.
Professor Wikeley: It could be.
When I heard you pose the question, that was the answer I first
thought of. I cannot say that is the answer, but that may be the
answer.
Q50 Andrew Selous: Thank you; that is
very helpful.
Professor Wikeley: One of the
features of the UK system is that ours is still very much a social
security driven system. Contrast that with the States and to a
lesser extent Australia, their child support agencies are about
the transfer of money from private households to private households.
Look at the States, for example, where 90% of the money which
goes through the enforcement agencies ends up in the hands of
the parents with care; only 10% goes to the state. That may of
course reflect the fact that the US have very low welfare. I cannot
quote you figures for Australia, but there is a much higher private
involvement in the agency; the coverage of the agency in Australia
is much greater. They have one million children in their agency;
we have one million children in our agency. You do not have to
be a social scientist to realise that there is an issue there
because Australia's population is one quarter of ours and breakdown
rates presumably are not that far apart.
Q51 Chairman: I remember in 1991 being
persuaded that in a relatively short space of time the culture
would change and lead to a willingness of people to pay and to
understand the responsibilities that they would have if they were
in relationships which produced children, the duties and responsibilities
which would flow directly from that; suddenly all the blood, sweat,
tears, pain and agony would be taken out of all this. Well, 13
years on none of that seems to be happening. Is it happening in
any other part of the international community? Is the cultural
issue about the need for people to accept their responsibilities
without people having to harry them through the courts making
any progress anywhere in the international community where these
set-ups are being legislated for?
Professor Wikeley: Very difficult
to say one or another empirically. What can be shown is that both
the American and the Australian systems are the more successful
in getting people to pay, even if they are not entirely happy
about paying. The Australian system appears to be more successful
than ours, so far as we can judge from statistics, but the Australians'
own research shows that their agency is still deeply unpopular,
both with NRPs and with PWCs.
Q52 Andrew Selous: I was fascinated by
your comment earlier that Australia, with one quarter of our population
has roughly the same, slightly lower, number of cases. Where are
the missing cases in the UK being dealt with?
Professor Wikeley: They are private
cases who are dealing with this matter between themselves or between
their solicitors. They are bargaining in the shadow of the Agency,
as the lawyers would say.
Q53 Mr Goodman: I listened with great
interest to your four opening points and the thought struck me
that three of them—the first cannot apply, because the Webbs
were not in Australia—would similarly apply to Australia:
the intractability, the relationship status and the other issues
which surround collection and difficulty of enforcement. Given
that the figures are roughly comparable, why is Australia more
successful than we are? Just going back to earlier exchanges which
you will have heard, is it because they have powers we do not
have or are they using the same powers we have more effectively?
Professor Wikeley: I think the
simple answer is that the answer to that is complicated. I suspect
that one of the reasons is that when the Australians introduced
their scheme, which was a few years ahead of us, they did not
make the mistakes we subsequently made. For example, their scheme
was not retrospective. It was also preceded by a huge amount of
consultation which fairly happened here before the 2000 Act, but
did not really happen before the 1991 Act. So there are several
reasons why their implementation was more successful than ours
back in the early 1990s. Other reasons which may account for what
appears to be more success—and the latest figure I found
is that the Australian agency claims to recover 88% of all cash
liabilities in CSA collect cases—is that they just assume
that everyone who pays privately pays in full. We do not know
that. In terms of collection through the agency, it is 88%. I
suspect a major factor in that is that historically the agency
in Australia has been placed in the tax office. It has now moved
out of that for ministerial purposes; it is part of the Department
for Family and Community Services in Australia, but it is still
very much governed by a tax office mentality, tax office systems,
tax office penalties and of course attached to that their standard
method of collection is through the payroll for employed people.
Q54 Mr Goodman: Yes, I wanted to ask
you about payroll, because you are in favour of using deductions
from earnings as a collection tool rather than an enforcement
tool.
Professor Wikeley: It certainly
deserves very careful thought. There are all sorts of implications,
but it certainly deserves careful thought.
Q55 Mr Goodman: Why do you think it has
been rejected to date by ministers?
Professor Wikeley: That is a question
for ministers, not for me. One obvious answer is that it is a
major administrative burden for employers. We know that employers
were not happy dealing with tax credits and I understand that
is now being taken back in house in the Revenue. There is a major
administrative burden there for employers. There may also have
been privacy concerns, especially in small companies, that it
was not thought right that the management should know the private
affairs of their staff; it may be an issue. It is not a concern
which has worried the Australians or the Americans, but that may
reflect cultural differences.
Q56 Mr Goodman: Do you think the new
scheme will increase compliance rates and if so, would you want
to hazard a guess by how much?
Professor Wikeley: I certainly
would not want to hazard a guess; I am not that foolish. In principle,
yes, it ought to improve compliance rates because one factor in
increasing compliance has to be understanding of the scheme and
perception that it is fair. Most people will grasp that a scheme
which levies 15, 20 or 25% is comprehensible and if overall the
figures come down a bit, they may think it is fair. In principle,
yes, it ought to, but obviously the devil was in the detail and
in the delivery, as we heard in the first session.
Q57 Mr Goodman: Which is why you said
"in principle" twice.
Professor Wikeley: Yes.
Q58 Mr Goodman: You are not actually
convinced, given the track record of the CSA, that it will improve
the compliance rate.
Professor Wikeley: I do not bet.
Q59 Mr Goodman: Do you think penalty
payments will help increase the compliance rate?
Professor Wikeley: They could.
The existing position, as I understand it, is that we are now
on the third version of penalty payments; the first two were completely
unsuccessful under the 1991 Act and then amended in the 1995 Act.
We are now on the third version, as amended by the 2000 Act, but
my understanding, having checked the guidance to staff on the
web yesterday, is that the computer system is not functional for
the delivery of financial penalties in that way. Again, it is
something the Australians do; they simply levy on the same basis
they levy penalties for late payment of tax. We are all used to
having that risk: if you do not pay your tax on time, you pay
a penalty, an interest charge. The Australian system is embedded
within the tax system and they simply apply the same system. As
you are going to Australia, you may wish to ask them how their
incentive scheme is operated. They had a scheme in place for about
a year which ended last month. They said basically that they would
write off any of the penalty payments if you paid up or made arrangements
to pay up within a certain period of time. That scheme closed
at the end of June and maybe by the autumn they might have a sense
of how far it has worked.
| 
