WEDNESDAY 19 JANUARY 2000

MS FAITH BOARDMAN, MR VINCE GASKELL, MR MICHAEL DAVISON AND MR JOHN LUTTON

  80. May I move on to uncollectibles. I am a bit puzzled here. One of the reasons according to the Report that collectibles are very high is because these are interim assessments and they are set at punitive levels in order to encourage people to pay. I find that concept a slightly curious one.
  (Ms Boardman) I think that this is another handicap within the current legislation where we do have a deficit of powers and penalties which again is being addressed in the new legislation. The IMA approach has proved to be necessary and helpful in some instances but certainly not the cure-all that it was hoped to be at the start of the Agency and that has caused problems over the years.

  81. By definition you are not likely to get uncollectibles but the legislation requires you to chase them. I recall when we had in front of us the poor lady who was trying to stop people importing cigarettes into Britain. I think her success rate was seven per cent or something. It did seem to me that it was largely a waste of effort. Are you simply going through the motions of pursuing uncollectibles because the legislation says you have got to?
  (Ms Boardman) We have with the NAO's agreement specifically badged them as uncollectible because that is our judgment and we pursue basically those that we believe to be collectible at the end of the day.

  82. They are not uncollectible, are they? They are either uncollectible or not but you are pursuing the uncollectible?
  (Ms Boardman) We certainly do not turn money away.

  83. It is a care and maintenance basis.
  (Ms Boardman) We certainly have a care and maintenance basis but our main efforts are inevitably around those monies that we think are potentially collectable.

  84. If you were a company you would have written that off.
  (Ms Boardman) That would be the normal accounting practice, yes.

  85. You have said that you find it very difficult to pursue some people to get them to pay and I accept that is a problem but I have had cases where nothing has happened for x number of years and the constituent says, "I have told them where he lives," and he does live there, he is has not done a bunk. He is not looking for oil in Saudi Arabia. I know some do go abroad and some move to particularly expensive accommodation so they can move out again when they have been assessed and there are manifest fiddles. How confident are you that in the pursuit when it is taking years and nothing has happened from the original inquiry, that you are going to be able to pull back that money?
  (Ms Boardman) Quite clearly the longer it goes on the harder it is to collect. I think that is the experience of any agency trying to collect debt and we do therefore have a legacy of problems dating from those early years when the resources and other problems that I have set out meant that very little effective effort was put into these areas. It is extremely difficult.

  86. You have used the phrase constantly the "legacy of the early years". Clearly the millennium did not happen a few weeks ago as far as you were concerned. When will you be able to say that is now passed, the book is closed and we no longer have a legacy hanging over us? When is the first date?
  (Ms Boardman) Not until we have the new system including the new IT and have successfully implemented that. There are clearly further improvements which we can make between now and then but I think that is the reality.

  87. That is a date which, following your exchange with Mr Page, we cannot ring in our calendar yet?
  (Ms Boardman) No, Ministers have said quite clearly it will not be before the end of 2001.

  88. When you have your new system, I realise this applies to quite a small minority of customers or clients, to what extent will you have the ability to exploit e-commerce and electronic exchange to speed things up?
  (Ms Boardman) That is certainly an aspect that we are looking at. The customer base that we have means that it will be necessarily limited. Many of the customers that are on benefit will not have access to those sort of facilities in reality for some years but for the minority of our private clients there may well be some scope.

  89. You are moving to analyse the customer base and some are fairly basic. What is this in aid of? What is the logic behind this? How far are you into it and what will you do with it when you have got it?
  (Ms Boardman) We have different customer needs in respect of different types of customers, both in terms of managing the risk and the likelihood that they will pay in respect of the non-resident parents. A good example is the self-employed which as a category tend to be less compliant, and to know precisely how many are in that category helps us to move our resources to try to deal with them more effectively. On the parent with care side the difficulties are largely about how much of the maintenance flows to them and directly benefits the child and how much goes to the Secretary of State to recoup the benefit payments that the taxpayer makes to the parent with care. Those customers who receive 100 per cent of maintenance payments clearly have some different customers expectations than those on benefits.

  90. When you say "move resources" give me an example of what you would do in Belfast, for the sake of argument, in the light of what this throws up?
  (Ms Boardman) A good example.

  91. What difference is there for the chap coming through my surgery—or a lady since there are some?
  (Ms Boardman) A good example would be in us trying to give priority to making full maintenance assessments which will actually lead to extra payments going to children and try to get those through as quickly as possible rather than perhaps giving priority to cases where the parent with care is on Income Support and the only beneficiary would be the Treasury rather than the child.

  92. Can you explain this for me, it is probably just a deficiency in my own understanding. You no longer do regular two-yearly reviews. Is that right? I picked that up from the Auditor's report and I did not quite understand what is happening.
  (Ms Boardman) We do case checks which are not as full as the previous periodic reviews in that they are not intended to be retrospective but simply to check that the current assessment is right at the date in question. We do those on average for every two years but there is flexibility which we use in a risk-based way so that those customers, like for example the self-employed where perhaps there is a higher degree of risk that we do not have accurate figures for their current earning, we would do perhaps rather more often and with smaller intervals than the average of two years.

  93. Would there be a case for restricting reviews to when people ask for it and you would then be able to put commensurately greater resources into people who are asking for them because of their change of circumstance.
  (Ms Boardman) That was certainly our experience on the periodic reviews where I think the retrospective nature was very unwelcome to many customers and did not improve compliance in practice.

  94. They wanted stability, they wanted to know where they stand.
  (Ms Boardman) That was the message many customers were giving us and was partly why we changed to the concept of case check, simply to do that from the current date and not to impose a retrospective change. Throughout we have tried to give priority to those changes of circumstance or appeals which customers themselves have put to us and we have now got to the position where on average we deal with those requests within six to eight weeks which is much quicker than it was two to three years ago. Those are the ones that customers want.

  95. Finally, Chairman, some people you are concerned with are obviously in and out of work, in and out of accommodation, and of course what they are supposed to do is to notify you when there is a change. Some do not. They are not quite sure how to or it slips their mind or, I have found, they come to a private arrangement with their other half that they make a bigger payment and that person is happy enough and even gets a receipt for it. Even if they might have done that with "goodwill" you are still obliged to pursue them if that does not correspond to the amount they should pay. Is there not a way you can evolve a system where there is a more consensual element where people can reach agreement without calling on the taxpayer to meet the bill, which is of course the reason you were set up in the first place?
  (Ms Boardman) Under current legislation we have extremely limited discretion. In legal terms that is not possible. In conceptual policy terms I think there are some potential real difficulties in that sort of approach. The experience is that it varies a lot between individual couples. Although there may well be some couples who can reach an amicable settlement in that way, it might subsequently break down or basic relations are such that they cannot reach it and I think that will continue to be a problem.

  Chairman: Mr Alan Campbell?

  96. Ms Boardman, I am sure you look forward to these meetings with a sense of foreboding and regard them as endurance, but we are trying to be helpful and that is how we met just over two years ago. You are looking forward to the new system and I think we all are, but I think I am also concerned about the position that we will start from when the system comes in and whether or not the lessens have been learned. Let me pick up on a couple of quick questions first. There was an earlier answer to a question referring to paragraph 2.3 which states that overpayments are more likely to be made and there is a four times greater chance than an underpayment. I doubt if I see many parents who come to my surgery because they underpay. We probably only see the overpayers. That is a very bold and worrying statistic. Have you given the Committee a commitment that you will look into this and will you particularly bear in mind that I am concerned that this is a matter almost of policy, that if there is any element of choice in here the CSA would rather there be overpayment than underpayment.
  (Ms Boardman) There is no such policy. We are genuinely puzzled at these results. Certainly I repeat my commitment that we will look into them further.

  97. Another point was the first one the Chairman picked up on in that Paragraph 2.2 on Page 3 could suggest that the number of correct assessments has actually gone down and the mistakes were going up. You said earlier that you had something like a million clients on your books. I do not think you used the term "statistical slack" but that term was used. On my basic maths it works out at the possibility of somewhere in the region of 20,000 more people potentially whose assessments are incorrect than the last time we met. They are the people who are bringing cases to our surgeries and to our doors. Do you accept that this is not just a statistical error, that there may be a case for saying that things have got worse for a significant number of people?
  (Ms Boardman) I think the basic underlying trend is that we have a lot more customers now than we did when I last spoke to the Committee. Our caseloads are now over one million and at the time when I last appeared they were closer to 600,000. That sheer increase in volume makes a lot of difference.

  98. This is a percentage, this is not an absolute figure. Therefore, from what you are saying, the more cases the CSA has, or gets on the current trends, the less accurate the assessments will be? Is that what you are saying?
  (Ms Boardman) That does not tie up with the other indicators and measures of accuracy, such as the accuracy of most recent assessment which we do measure on a more routine basis. I am genuinely puzzled about the figures which are suggested by the sample. I think I do need to ask to put in a more detailed note when we have done some more research.

  99. I look forward to seeing that[1]. On page 84 there is reference to the CSA's ability to defer debt and to settle with, if I have got it right, the parent with care out of taxpayer's money. Is there any evidence that this is proving a risky strategy for taxpayers?

  (Ms Boardman) No, it is actually proving to be a good incentive for compliance because our willingness to defer the debt depends on the non-resident parent being fully compliant for at least six months. Overall it certainly has met with approval from independent observers, such as our Independent Case Examiner, as potentially helpful.