Political & Treasury involvement
The importance attached by government to Treasury neutrality
The reformed scheme was heavily constrained to be Treasury neutral, and this minimised the amount by which the poorest children would become better off under the reformed scheme. Here are some telling statements.
Evidence to Social Security Select Committee after the Green Paper
Baroness Hollis showed her thinking on Wednesday 22nd July 1998 when giving evidence about the Green Paper to the Social Security Select Committee soon after the Green Paper was issued:
Social Security Select Committee Report after the White Paper
What fraction of money administered by the CSA is of interest to the Treasury?
The real question is what will it be when the reformed scheme is operating?
At the moment, about 40% of CSA cases are benefits cases where there is a Treasury interest, and 60% are private cases where there isn't. So a glib answer at the moment is that the Treasury is interested in 40% of the money. But often it is the better qualified PWCs who get back to work and become private cases, and these tend to have been associated with better qualified NRPs. It is probably the case that the average liability for the 60% of private cases is higher than the average for the 40% of benefits cases (and vice versa).
Once there is a £10 disregard in Income Support, the proportions change again. £10 is about one-third of the expected average liability in the reformed scheme, so even if the benefits cases match the average liability, about one-third of that money will cease to be of interest to the Treasury. That leaves about one-quarter. (The proportion of benefits cases is reducing year by year. They probably have a smaller than average liability. So the actually Treasury interest will probably be less than this).
Does this justify the extent of the Treasury's influence on the reformed scheme shown above? I suggest not.
(To be fair, there is another factor too. There is some evidence that the CSA is an anti-fraud tool. Some PWCs withdraw their Income Support claims when the CSA gets involved. But there are no convincing predictions from this, because PWCs sometimes do this anyway. The predictions end up being based on dubious assumptions which are sometimes designed for other purposes. For example, government is motivated to be seen to be effective against fraud, and some of the numbers appears to be intended to look good, rather than be a solid basis for designing a new child support system).
This influence of the Treasury in the reform of child support was at a time when other Treasury policies involved "give aways" to improve the lot of families. (For example, Working Families Tax Credit was a "give away"). It is widely recognised that the UK is a long way away from "joined up government". It is possible that "joined up Treasury" is just as far away!
|Page last updated: 17 December, 2003||© Copyright Barry Pearson 2003|