Select Committee on Work and Pensions Minutes of Evidence

Examination of Witnesses (Questions 80-84)


17 JANUARY 2007

  Q80  Harry Cohen: If they go down this route of bailiff collection, what can be done to stop referring cases that have got these unfair implications, these serious complications, to the bailiffs? I am thinking, for example, of a case where paternity is still in dispute but the debt has built up and it has gone across to the bailiffs. Would it be possible to put something in the system for disputed cases?

  Ms Maclean: There would be a cost, and then you come into calculations about whether it is worth putting in the work to determine exactly what the circumstances are before you try to collect or whether you make some fairly brutal decisions about not looking for people who had interim orders made in the early 1990s on the grounds that they were probably inaccurate and probably the children have grown up and gone to Australia where they are probably being pursued by the child support system for their own children. You could do it by category rather than by individual if you wished.

  Professor McKay: It is probably a bit harder edged. I think people who have got to this stage have often ignored a whole sequence of letters and contacts and have failed to answer demands for payment. There are some people out there who are trying to wilfully dodge paying any money, and you do need the tools to deal with that group. That does not mean you should go after people in an unfair or disproportionate manner, but you do need these kinds of sanctions there just to show the organisation's teeth.

  Q81  Chairman: If they have owed money for the last 10 years, they have lost all rights to any sympathy, have they not, brutally?

  Professor McKay: Yes, basically, they must have ignored a whole sequence of correspondence, court summonses and all other kinds of things. There does come a point where you have to draw the line and say the sympathy is at an end. There are rights of appeal and so on.

  Harry Cohen: I am not sure I would pay if I strongly disputed the amount. I might pay a limited amount, but I am not sure I would pay if it was heavily disputed.

  Chairman: I think the issue is we are talking about people who refuse to pay anything. If somebody says, "I think you have got the figures wrong. In the interim I will pay this amount", then there is something to be said. When somebody is going on year after year after year using every available mechanism to avoid paying a penny, then, I think, sympathy has gone out of the window. That has always been the problem with the CSA: the enforcement has always been too poor.

  Q82  Harry Cohen: I agree with that, but I think the problem is the bailiff is still going after the other one. Can I pick up one more point from the White Paper, where it said, "Where the debt is due to be paid to the parent with care, it will only be factored (sold) with their agreement." That has got implications of its own, it seems to me. It could increase the animosity between the two parents, or it could be used vindictively by the parent with care presumably. Why should the collection be for a debt that goes directly with the parent with care? Why could there not be a system whereby the CSA, or the authority, in effect, pay the parents with care and then go after the—

  Ms Maclean: That would be guaranteed maintenance.

  Q83  Harry Cohen: Would that not be better though? Could we not take out of the system altogether the payment to the parent with care and pay the parent with care directly?

  Professor McKay: You are asking somebody to make a very difficult decision, which is, "We know you are owed 10,000. Would you be okay if we paid you £1,500, as it were, to get away, or would you mind if we passed it on to this other agency and you might get back £2,000?" You might as a parent with care turn round and say, "No, actually, I am owed 10,000. I would pretty much like the 10,000, thank you", or you might get, "Actually, I never expected to get it. I will settle for 1,500", but that is quite a difficult decision to make. It does depend partly on how much discount has been applied to this kind of Third World debt, how much it is really worth on the open market, whether it would be worth pursuing. Again, whether that would be called buying out the debt, or whether it would be compensation, a write-off, whatever, I think it is better that the parent with care is able to make the choice rather than someone makes it simply on her behalf.

  Q84  Harry Cohen: The example you gave will not work, because if the bailiff cannot get the full sum, the 10,000, he is still going to take his money (which would be quite substantial) as part of this process, which is effectively the money but for the parent with care, because she is not getting the full amount.

  Professor McKay: I think these are difficult judgments, and what you do with this big debt that may well be accurate and must have been through the process, is say, "Is this a case for compensation? Is this a case where we will buy you out of that debt?" These are all possibilities.

  Ms Maclean: That is a good example of a case where the parent with care would need independent advice rather than advice from the CSA or C-MEC.

  Chairman: Just on a final point, when you sell the debt, literally you sell it; somebody buys it off you at a discount and then if they collect more than that, that is where their profit comes. It is not a question of making a profit out of anybody else's debt. Thank you very much, that has been a very interesting session.

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