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Mr. Newton: I will not repeat the points that I made earlier, but I add that occasionally collecting blood stocks sufficient to meet domestic needs--which is the point that I emphasised and which is the authority's principal
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purpose--leads to a surplus of blood products which can be sold abroad. I am advised that the alternative would be to burn the surplus, which is to hardly anyone's advantage. I will certainly bring the hon. Gentleman' comments to the attention of my right hon. Friend the Secretary of State for Health.Mrs. Ann Taylor: In view of the exchanges earlier, will the Leader of the House accept my word that, regardless of what he has been told by the Prime Minister or anyone else, my inquiries confirm that the Leader of the Opposition made no request to cancel the business on Tuesday next week? If that is the reason why the Leader of the House proposed that the House should rise on Tuesday rather than Wednesday, now that the reason does not hold up is it his intention to restore Prime Minister's Questions on Tuesday and will he withdraw his earlier statement?
Mr. Newton: The last thing that I want to do--especially at this time--is to raise the level of acrimony in the House. It is clear that there was a misunderstanding on the account of the hon. Member for Dewsbury (Mrs. Taylor), because it is manifest that the impression created in my right hon. Friend the Prime Minister's office was that something approaching a request had been made. I honestly do not think that we can carry that point further across the Floor of the House today.
I am not disputing the good faith of the hon. Lady. Equally, I hope that she will accept that what my right hon. Friend the Prime Minister and I have said was also in good faith. If there has been a misunderstanding, we should perhaps clear it up in other ways. Meanwhile, I am certainly not planning to announce an immediate change to the business that has already been announced for next week.
Madam Speaker: May I remind hon. Members that on the motion for the Adjournment of the House on Tuesday 20 December, up to nine Members may raise with Ministers subjects of their own choice. Applications should reach my office by 10 am on Monday next. A ballot will be held on Monday morning, and the result made known as soon as possible thereafter.
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Points of Order
Mr. David Harris (St. Ives): On a point of order, Madam Speaker. I wish to refer to early-day motion 284 in the name of the hon. Member for Plymouth, Devonport (Mr. Jamieson), and I have given the hon. Gentleman notice of my intention to do so.
A week ago The Cornishman newspaper published a letter, which the editor admitted to me he knew to be a spoof, from an organisation purporting to be the Penwith Conservative research group. No such group exists. The letter was damaging to the Conservative party when taken at face value, and it made outrageous statements.
It came to my notice that the hon. Member for Devonport intended to table the early-day motion, and it duly appeared on the Order Paper. Before the hon. Gentleman did so, I met him on two occasions and put him in the picture. I told him that the letter was a spoof, that the organisation did not exist, that the writer of the letter was not a Conservative and that his outrageous views could not be attributed in any way to the Conservative party which, of course, was the impression left with the many people who rang my office. I gave the hon. Gentleman a press release issued by my association agent which made the position clear, and I also alerted the Clerks to the situation.
Subsequently, the hon. Member for Devonport saw fit to table the early-day motion which gives credence to that scandalous suggestion, despite my having told him the background to the situation. Could you say something, Madam Speaker, about an hon. Member acting in such a way in using the facilities afforded to all of us through the Order Paper? As the hon. Gentleman is in his place--I am grateful to him at least for that--will you now give him an opportunity to withdraw the early-day motion and the scandalous points which he is seeking to make?
Mr. David Jamieson (Plymouth, Devonport): Further to that point of order, Madam Speaker. I tabled this early-day motion as a matter of good faith to give the hon. Member for St. Ives (Mr. Harris) an opportunity to refute the letter that had been put in his local newspaper. It is significant to note that the hon. Gentleman did not refute the contents of the letter, but just tried to deny that the person who wrote it was a former member of the Conservative party. Would it be in order, Madam Speaker, for you to give an opportunity to the hon. Member for St. Ives to correct his early-motion 289, in which he has misspelt the name of a village in his own constituency?
Madam Speaker: Order. I have had enough of these exchanges. The House knows that hon. Members take responsibility for the texts of their own early-day motions--
Mr. Tony Banks (Newham, North-West): On a point of order, Madam Speaker.
Madam Speaker: Just a minute. The hon. Member for Newham, North-West (Mr. Banks) is always on his feet asking for a point of order before I have finished talking.
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The fact that the hon. Member for St. Ives tabled early-day motion 289 has put the matter in context.Mr. Tony Banks: On a point of order, Madam Speaker. We have just had a series of requests to the Leader of the House for various debates--many interesting debates and many less interesting ones, but plenty of suggestions for business. If it turns out, when inquiries are made, that there was no request from the Leader of the Opposition to the Prime Minister not to have normal business on Tuesday, and given that the Leader of the House cited that request as the reason why the House would rise somewhat earlier than expected--despite all the business that we have suggested--can you make it clear that you would place no impediment on the Leader of the House coming back to the House with another business statement? That would ensure that we can have Prime Minister's questions on Tuesday.
Madam Speaker: The business of the House is not a matter for the Speaker, but for the Leader of the House in conjunction with the usual channels.
Mr. Harry Barnes (Derbyshire, North-East): On a point of order, Madam Speaker. You will have heard the Leader of the House say in answer to my question that normal conventions would be followed on the introduction of the Government Bill on rights for people with disabilities. I wonder whether you can inform the House of the normal conventions for Parliament-- I know that you cannot rule on the normal conventions of the Government.
Madam Speaker: The hon. Gentleman has a wry smile on his face because he knows that that is a hypothetical issue at the moment.
BILL PRESENTED
Town and Country Planning (Costs of Inquiries etc.)
Mr. Secretary Gummer, supported by Mr. Secretary Lang, Mr. Secretary Redwood, Mr. Jonathan Aitken and Sir Paul Beresford, presented a Bill to make provision authorising or requiring certain local authorities with functions under the enactments relating to Town and Country Planning to make to, or to persons appointed by, certain Ministers of the Crown, or to persons appointed by those authorities, payments in respect of the administrative cost of, or otherwise connected with, certain local inquiries or other hearings, examinations in public, or the consideration of certain objections, under those enactments; to validate the imposition by such Ministers on those authorities of requirements to make such payments, and the making by those authorities of such payments, whether before or after the passing of this Act; to make provision with respect to the remuneration and allowances payable to persons appointed to hold such local inquiries or other proceedings; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 28.]
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ESTIMATES DAY
[1st ALLOTTED DAY]
SUPPLEMENTARY ESTIMATES, 1994-95
Class XIII, Vote 4
Child Support Agency
[ Relevant documents: Fifth Report from the Social Security Committee of Session 1993-94, on The Operation of the Child Support Act: Proposals for Change (House of Commons Paper No. 470), and the Social Security Departmental Report on the Government's Expenditure Plans 1994-95 to 1996- 97 (Cm 2513.) ]
Motion made, and Question proposed,
That a supplementary sum not exceeding £45,825,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1995 for expenditure by the Department of Social Security on administration, for agency payments, the promotion of Government policy on disability issues, and for certain other services, including grants to local authorities and voluntary organisations.--[ Mr. Burt. ]
4.15 pm
Mr. Frank Field (Birkenhead): The debate on the supplementary estimates gives the House an opportunity to discuss the current report on the Child Support Agency laid before the House by the Select Committee on Social Security. I should like to make some general observations about the CSA and then to discuss some of the specific proposals that we made in our report, which we issued recently.
The nature of the debate allows me to begin by thanking the members of staff of the Select Committee for the work that they do. Given that our proceedings are now televised, it may surprise many taxpayers to know that Select Committees run their own establishments on a tight reign. Our own Select Committee has just four staff to cover all its functions. Although we may not live up to the expectations of American committees, we certainly give extremely good value to taxpayers in the way in which we attempt to monitor what is happening in government. I am grateful for the opportunity to put my thanks to those staff on the record.
The first and most important general observation about the CSA is that the whole atmosphere of the debate on its future has changed in the few months since we previously debated it. At one time, I seriously thought that the agency would collapse; that the difficulties of establishing it and the weight of its work load were such that before the end of this year the Secretary of State would have to come before the House, draw stumps and say that the Government were beginning again. I no longer believe that that is so. Although the Select Committee has some criticisms to make, to which I hope the Government will respond constructively, anyone who believes that the agency will collapse is either misleading himself or misleading others.
The nature of the debate now is how we reform the CSA to make it more effective and to fulfil the goals that the House thought it was voting for when it established the agency, rather than a mere moonshine debate about what will happen when the agency is replaced. It will not collapse, so the politics surrounding the CSA relate to
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how we should reform it. Certain reforms have been made and I hope that the House is clear about the significance of the change that it has made to that area of policy.Since the welfare state was established, with the first reforms that Lloyd George put on the statute book in this Chamber, we have been about redrawing the boundaries of duties between state and individuals. Each of those changes has redrawn the boundary in favour of collective action as against individual responsibility. The importance of the Child Support Agency is that, in that most sensitive of areas, we have for the first time redrawn that boundary restoring duties to individuals and withdrawing state support. If any hon. Members thought that that would be a popular move, they were clearly foolish to hold such a view. Given that we have decided to redraw the boundary, it is doubly important that we listen carefully to the criticisms that have been made about the running of the agency and that Governments respond sensitively, quickly and regularly to concerns that hon. Members express on behalf of their constituents. The most serious concern that we should all have is the fact that those of us who voted the passing of that measure, with widespread support, made it retrospective. The normal rules of the House have been hostile to passing retrospective legislation and that was not seriously considered when we debated the measure. Although we deplored the number of fathers--generally speaking-- who had deserted their families and left taxpayers to pick up the bill, for a considerable period there was very little activity by the Treasury to reduce the increasing number of families who were deserted and whose household bills were met by taxpayers.
Over the past 20 or so years, but particularly the past 10 years, we have witnessed fathers disappearing from the scene and taxpayers taking on the responsibility of surrogate parents. This measure was intended to draw a line and, we hoped, to prevent that trend from continuing.
Mr. Andrew F. Bennett (Denton and Reddish): I follow what my hon. Friend says, but am concerned that in my constituency the agency is failing to do what he wants. The agency is placing in most difficulty people who have been conscientiously paying, while it seems incapable of getting a grip on those who have washed their hands of all their responsibility and disappeared. I accept the fact that the courts have failed to do anything about those people, but so has the agency. The agency is therefore causing a massive upset to people who were meeting their responsibilities in the past and is failing to do the job that I and many others wanted it to do: to get a grip on those who were genuinely dodging their responsibilities.
Mr. Field: I hoped that the agency would get a grip on everybody, not just on one group or another. If parliamentary answers are to be believed--I see no reason why they should not be--the position has changed of late, given the groups of absent parents that the agency is now targeting. If I remember the answer correctly, some 70 per cent. of those now being contacted are parents who previously had not paid their contributions.
While the House must be aware of the value of representing single-Member seats and holding surgeries in those seats, which teaches us a great deal, it must also recognise that a selective group of people comes to see us. People do not come to our surgeries to tell us that everything is going well--thank goodness. Our lives
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would be made impossible. By the very nature of such surgeries, people come to complain. No one has come to my surgery to say, "This is a wretched agency. I dumped my wife and disappeared. Thanks to you lot in the House of Commons, I have now been not only chased but traced and am being presented with bills." I do not expect people to come to my surgery and say that, although it is clear from the figures that people are being traced and money is being collected. The point that my hon. Friend the Member for Denton and Reddish (Mr. Bennett) makes is valuable, in that, if we were starting again, obviously we would not have started with those parents--not always, but generally, fathers-- who were doing their level best to meet their commitments to their first families. They read about all the parents who were presented in an unfavourable light in the media and somehow felt that they were guilty by association and then, to add insult to injury, they were the ones who were on the learning curve of the agency as it tried to set up a new operation from scratch. The balance has changed, but by the nature of our surgeries, we do not expect people to come to them and say, "I have been a heel for several years and the agency has stopped that." That does not excuse some of the behaviour that affected some of our constituents who played the game, who felt strongly about their commitments to their first families, who have never thought of themselves as absent parents in that sense, and who felt that they were being tried, not only by the agency, but by the media.Sir Donald Thompson (Calder Valley): The hon. Gentleman, having said that about his advice centres, may be surprised if I thank him for doing something right. He and the Committee deserve the praise of the House. We have managed--and I am a big enough fellow to say it--to hide behind him in some respects. We have been able to tell our constituents that there was constructive debate, and that it was being listened to on the Conservative Benches. I shall hold an advice centre tomorrow, where I am sure that the administration of the Child Support Act 1991, not its politics, will be discussed in great detail by people who attend. I am glad that the hon. Gentleman has put the politics behind him and is now considering, as are hon. Members on both sides of the House, the complicated matter of administration. I thank him very much.
Mr. Field: I am grateful to the hon. Gentleman for his comments. However, before I finish, I may mention a few strains of criticism about the nature of our report and about what happened to some of the recommendations in it. I am sure that, on that subject, the hon. Gentleman will be with me and perhaps against some of his Conservative colleagues.
Given the nature of the agency, given what it was trying to do in redrawing the boundary of responsibility between the state and the individual, given that it was a complete innovation and given that it was trying to obtain a more adequate contribution to first families from second families, our debate obviously centres on how those second families--and especially the fathers in those second families--have fared. Indeed, most of the recommendations that we made, and most of the
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recommendations that were voted down by the Conservative majority on our Committee, were in favour of the absent father.I do not want the debate to pass without recording on the Floor of the House that the group that is often left out of our debates is that of the mother and the children. To listen to some of our contributions, one would think that they did not exist. Although it is true that some women have behaved badly to their husbands or previous husbands or partners, who are very much the injured parties, the overall statistics demonstrate what one mother in my constituency said to me: "We feel that we have been dumped by our husbands. We had no wish to be on benefit--that is an existence that we have had to endure. Although we can understand you, as a member of the Committee, making proposals for change that ensure the effective running of the agency, we sometimes feel that we are left out of the entire debate." That mother described to me the experience of being the dumped mother in the arrangement. I hope that that thought will not be lost. I shall return to that theme later.
Hon. Members will know, from the part of the report that was agreed unanimously, that there is a raft of proposals that we hope that the Government will consider seriously, but at the end of the report there are other proposals, which are more basic in their approach to reforming the agency. I wish to discuss those proposals at the end of the report, but first I make one comment about my reported remarks about the new head of the agency.
I felt that the Secretary of State was getting away--if I may say so--with murder, always appointing a woman to run the agency. Many fathers used that person as the lightning conductor for their anger about the agency. That anger should be directed at the Secretary of State and at us--the people who passed the legislation--rather than all that anger, criticism, hatred and so on being directed at the agency.
My comments were clearly unfair to the new head of the agency, whom I have had the pleasure of meeting on a number of occasions. I have rarely been so struck by a public official's ability to use common sense and elevate it to an intellectual level in discussing policy. That is a model which I hope we shall see reflected elsewhere in the civil service. After making her acquaintance, I am pleased to note that there are two people in the agency who could well take hold of the most senior position.
I come now to the reforms in the report that did not gain the approval of the majority of my colleagues. Again, I underline that the House must exercise its judgment. At one time it seemed that we might be debating the report against the background of a crisis arising from whether the agency could survive. We all know that, as Dr. Johnson said, to be hanged in the morning concentrates the mind wonderfully. If the Secretary of State thought that the agency would collapse, the agenda for reform would be much wider than it is today.
I make a different plea, not in an attempt to stampede people into reform, but for us to consider whether we have made the right judgment about how the agency should operate. The 41 proposals are all worth while, but they are not major reforms. We need to strike a new balance in how the agency will operate and we need to do that in three ways.
First, it is difficult to claim that, in the immediate future, the agency has the needs of children central to its operation. We all know why the agency is in existence. It
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is an attempt to limit the cost that taxpayers are at present meeting on behalf of absent parents. As income support is being paid, why on earth, logically, should any money go to the first family? But as so often in political activity, logic is not the key thing in determining what we should do.One of the ingredients that we lack for the success of the reform is a few million cheer leaders out there in the country. If the Government could accept the proposal for a disregard, we would have some important recruiting sergeants out there actively supporting the agency. There is clearly a mass of voters out there--millions of them--who support the agency unreformed. I would hope that they would want it to be reformed in the radical way that we are debating today, but we need some active supporters, which we do not have at present. The disregard would not only recruit such supporters but play an important part in lessening the attempts that some absent parents are planning to frustrate the agency's operation by coming to an unwritten agreement with the first partner or wife and saying, "If you say that I am threatening to beat you up, I will slip you £10 or £20, you will be better off, you will still be getting your income support and I shall certainly be better off because I will be paying less."
If the penalties in the Act for those whose story in such circumstances is not believed--those penalties should clearly operate in such circumstances- -were double-banked with a disregard, it would be difficult for individuals to try to put that pressure on their ex-wives or partners. The disregard should be seen not only in terms of winning supporters out there in the country, but as an effective way of preventing the increase in the number of those--generally speaking, fathers--who are trying to get their ex-wives or partners to say that it is unsafe for them to disclose the name, let alone the address of the father of their children.
Secondly, the House must accept that there is no right of appeal in relation to this executive agency. Is there any other body that makes decisions, let alone decisions as important as those taken by the agency, to which individuals have no right of independent appeal? I do not know of one. Of course, any appeal system would have to be carefully thought out and the basis on which appeals could be made must be carefully defined, otherwise large numbers of people would use an appeal system to try to wreck the CSA. An appeal system is an important matter of principle.
It is immensely important that individuals who feel so aggrieved that they cannot accept the agency's decision can appear before a group of their peers, eyeball to eyeball, and argue their case. That happens in our court system. We all know that sometimes we win in the courts and sometimes we lose, but we at least know that we have been able to put our case personally. This is an important and sensitive issue in people's lives and one cannot expect to run a service only by post or by telephone, however efficient the post or telephone system is. There needs to be that personal right of appeal. The third reform, to which I attach the most importance, was not supported by a majority of Committee members. It involves having a new simple tax-take formula. The formula is important. Hon. Members who pass legislation should be able to understand it. I know that one Committee member understands how the formula works. Committee members
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had the advantage of a tutorial from the Department for a couple of hours. When it was over, it appeared that we all understood the formula, until we were each invited to explain the simple examples that we had been given. We could not do it. That was not because Committee members lack intelligence--far from it. If we cannot understand the formula, how can we expect people out there to understand it?It seems a extraordinary dereliction of duty for a party that believes in incentives not to understand the importance of individuals knowing what the effects on their maintenance payments will be of getting a new job or new qualification, working overtime and so on. The formula needs to be understandable to Members of Parliament, let alone our constituents. It needs to take into account--this is the more substantive point--the retrospective nature of the agency that has been established.
We may all agree that we should never have reached the position where large numbers of families gained no maintenance support, but the Government allowed that to happen. We all know how word spreads through the grapevine from this place. People believed that it was all right to begin a second family and they did not expect to make any major contribution to their first family. In those circumstances, large numbers of individuals began a second family.
Having happily established a second family, those people now find that the Child Support Agency that we established is retrospective. Natural justice demands that the group of people to which we apply the legislation retrospectively should pay a lower contribution than people operating in the world who know not only that there is a CSA but that the CSA is working, will stay and will become more effective.
I underline the point that I believe that we are debating reform of the agency rather than its collapse or abolition. Neither of the two major parties is interested in taking this piece of legislation off the statute book. However, the fact that the Secretary of State is not likely to find egg on his face from having to announce the agency's imminent collapse does not mean that we should not look carefully at the necessary reforms. It requires basic structural reform if we are to do justice to our individual constituents. I do not believe that we are doing that currently and, however useful the majority recommendations of the report may be, I do not believe that they achieve that either. Some of the recommendations that were voted down by the majority go some way towards doing that.
From this debate we need to send out a message to a large number of people who are incredibly angry at the way in which the agency operates and what it has done to their lives. We must let them know that, although we are committed to the agency, we are sensitive to what they say and will try to draw lessons from it. Fiddling about with minor reforms on the edges of the agency does little justice to the social revolution that we began when passing the Act. We were redrawing the line between the role of the state and the responsibilities of the individual. For the first time in 90 years, we have drawn back the line towards the individual. In those circumstances it is crucial that we listen carefully to what our constituents say is still wrong with the agency and that we act on what they say.
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4.41 pmMr. Peter Thurnham (Bolton, North-East): The Christmas spirit seems to be breaking out. I enjoyed listening to the hon. Member for Birkenhead (Mr. Field), particularly when he said that he thought that our lives would become impossible, with people coming to tell us that things were going well. I take that as a fulsome compliment on the way in which the Government are running the country.
I join the hon. Gentleman in complimenting the staff of the Select Committee on Social Security on the help that they provide and, in the spirit of Christmas, I compliment the hon. Member for Birkenhead on the way in which he conducts himself as the Committee's Chairman. He has long experience and, having come to the Committee relatively recently, I feel that I benefit from that and from the fine way in which he conducts proceedings.
The hon. Gentleman was a little disingenuous in his criticisms of some of the items that do not appear in the full report. I listened carefully to what he said about maintenance disregard but I did not hear him provide a figure that he felt would be appropriate. He knows that substantial costs are involved. For example, he knows that a disregard of £15, which was one of the figures considered during the Committee's work, would cost anything up to £500 million. A £10 disregard could cost anything up to £350 million, depending on the take-up.
There are other disadvantages, because a disregard could be considered a disincentive to people wanting to go back to work. It could also be considered as unfair to parents who stay together, who would not receive the disregard if they were dependent on income support. Parents with care who were not able to have maintenance paid would be at a disadvantage compared to those who could. The hon. Gentleman will recognise that that introduces another element of unfairness. There is no easy answer.
Mr. Bernard Jenkin (Colchester, North): The recommendation for a disregard, which I also opposed as a member of the Committee, fails to acknowledge the proper role of family credit. As maintenance is received by a parent with care, not all the benefit that he or she may be receiving is taken away. The family credit system leaves them better off than they would have been. If the parent with care moves into part-time employment, the maintenance being received is not taken away like other benefits or the disregard would be.
Mr. Thurnham: My hon. Friend is right. Family credit is one of the best ways of helping people back into work. The parent with care can receive all the benefits not only of an additional income but of the social contact that can arise from going back to work.
The hon. Member for Birkenhead was let off the hook by the Committee. He was on record as saying that our formula should be changed to that which applies in Australia and New Zealand. The more evidence we received about the way in which the formula works, or rather does not work, in Australia and New Zealand, the more he realised that adopting that method would be a mistake. In fact, our report made the right
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recommendations and the hon. Member for Birkenhead realised that the Australian and New Zealand methods were not the most appropriate.Mr. David Shaw (Dover): Does my hon. Friend recall that as we looked at the Australian child support system we realised that it was still being questioned some six years after its establishment? We found that one of the principal questions was whether Australia could adopt a more complex formula along the British lines rather than its own simple formula.
Mr. Thurnham: If the Committee report was lacking in anything, perhaps it was sufficient comments about exactly what was happening in Australia. A Select Committee in Australia had reported on the difficulties. Mr. David Butler, the assistant commissioner for the Australian child support agency, said that the agency has been operating for six years and that
"meeting all expectations is proving most difficult."
Mr. Frank Bosch, the director of child support in New Zealand, said:
"Persuading people that parents should pay for their own children is a slow process."
Mr. John Spellar (Warley, West): Will the hon. Gentleman accept that a previous interim report from the Select Committee made the point that has been made several times by the Australians: that they cannot understand why we went for retrospection, which is the fundamental problem and the one that is causing the greatest difficulty? That problem was alluded to by my hon. Friend the Member for Birkenhead (Mr. Field).
Mr. Thurnham: I was coming to that. That was the other point made by the hon. Member for Birkenhead, although his view on that contradicted his opening remarks, in which he said that he wanted to stress the importance of the mother with care--it is usually the mother--and the importance of looking after those children. If we do not apply the system retrospectively, we will leave all those mothers with children out of the reckoning. We would have to say, "I am sorry, we cannot help you because we have decided not to look at it retrospectively."
There has always been a retrospective element. The courts have always had the power to look at current circumstances. If the father's circumstances are improving--it is usually the father--it is only right that there should be greater payments to help with the children. I do not think that we can say glibly that we can forget about retrospection. In any case, the scheme has been in operation in Australia for more than six years and there are considerable difficulties. Just saying that we will not bother with retrospective cases will not make life any easier.
Mr. Spellar rose --
Mr. Thurnham: We have already had an intervention from the hon. Gentleman. I must press on.
Mr. Alan Duncan (Rutland and Melton): In past settlements was there not, by and large, a division of assets rather than a provision for maintenance in the future? When one understands the distinction between the division of stocks and the provision for future flows of money for the maintenance of children, one realises that the old arrangements under the courts were usually
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deficient. None the less, the Committee has recommended in its report that some consideration should be given to the retrospective element of past settlements.Mr. Thurnham: My hon. Friend is right to point that out. We look forward to the Government's response in the latter half of January. I was sorry that the hon. Member for Birkenhead did not refer to one of the other items left out of the Committee's report. He may recall that he used his casting vote to rule out an amendment that I had tabled, which suggested that the Government might look more closely into the benefits that could be gained from contracting out. Those who have the report will find the details on page 31. We had an equal vote and the Chairman used his casting vote. I was sorry about that because I would have liked to have seen that appear properly in the report. I hope that the Committee will have time to look into contracting out. It was rightly pointed out that it had not had time to take more evidence on how contracting out should be applied more fully.
I shall direct my remarks a little more to the contracting out of the activities of the CSA and to the way in which the scheme would work. The private sector could have been used much more. The fact that the CSA was a new operation was no reason for not considering contracting out its services. I am sure that had the agency's services been contracted out, it would have worked better because firms that undertook to work for the agency, or perhaps directly for the Department of Social Security, would have been very careful about how they did it. They would not have landed themselves with the difficulties with which the Child Support Agency landed itself. Although Ros Hepplewhite has paid the price for those difficulties, they should not have occurred in the first place. I am rather sorry that we are meeting this evening to vote an extra £30 million pounds for the Child Support Agency because, had it been run more efficiently in the first place, I am sure that that money would not have been needed.
We have much experience of the benefits gained from contracting out by local authorities and by central Government. There is evidence that savings achieved in central Government by contracting out may amount to more than 20 per cent. and there is a great deal of evidence about savings in local authorities. The Audit Commission has achieved savings averaging 7 per cent., and in some cases higher. Savings range from those in refuse collection of 12 per cent., to those in building cleaning of 20 per cent. and so on through other local authority activities, saving many hundreds of millions of pounds. More than 40 local authorities are now reckoned to be setting a good example--Berkshire, Croydon, Brent and Wandsworth to mention a few. Indeed, the other day my own local authority in Bolton was able to save £250,000 per annum solely by outsourcing its computer services.
Those are examples of the savings that can be made and many firms can achieve them. At one time, the number of such firms was limited but, with the market building up, companies such as Touche Ross, and through it CSL, provide services. The American firm, EDS, has signed a £1 billion contract with the Inland Revenue to provide many of its computing services. The Cadbury-Schweppes firm IT Net, a French company P Sec, Anderson Consulting and IBM, ICL and many other companies now provide services.
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I am sure that private firms of solicitors could play a part in the work of the Child Support Agency. I understand that some 160,000 people are employed in solicitors' firms. The workload of 5,000 civil servants--and it is rapidly expanding to 6,000 plus--in the Child Support Agency could be taken over by private solicitors' firms and perhaps co-ordinated by one of the companies that I have mentioned. I was able to enjoy a meeting with the Secretary of State to let him know exactly how strongly I felt about contracting out. It was an opportunity for me to meet Ann Chant who, of course, was previously employed in the Contributions Agency. I am not exactly sure of the track record of the various people involved with the DSS. The DSS has perhaps been a little less successful than other Government Departments in contracting out. I do not know why that should be or whether there is some resistance in the Department to contracting out. Instinctively, I feel that the Government should contract out at every available opportunity. Indeed, there are examples of successful contracting out in the DSS, such as the Information Technology Services Agency, under which savings have been made. I do not see why the DSS cannot place greater emphasis on contracting out. Other Departments have set remarkably good examples. The Ministry of Defence has made a 47 per cent. improvement in the time spent overhauling Challenger main battle tanks by outsourcing that work, and the Ministry of Agriculture, Fisheries and Food has made savings of 34 per cent. from market testing the work of the intervention board. It is a question not only of reducing costs but of improving quality. I am sure that the two can work hand in hand. There must be plenty of opportunities in the DSS to open its work to competition and I am disturbed that it appears to have done much less compared with other Government Departments.The Child Support Agency could gain more than any other agency from working in partnership with the private sector. It does not seem to be right to resort to old-style solutions of recruiting hundreds and thousands more civil servants for the task when those already employed have failed to do it so abysmally. Those civil servants were recruited at a substantially higher cost than they would have incurred if they were working in the private sector. If the CSA's work is put out to the private sector at a later date, heavy redundancy costs will be incurred in trying to replace civil servants with people who are on less attractive remunerative packages. When the Committee considered other areas of the DSS, such as tackling benefit fraud, it was told--at an earlier stage of its work before I joined the Committee--that there was difficulty in tackling it sufficiently well because of a lack of civil servants to do the work. There does not seem to be any lack of civil servants to do the work of the CSA, so why were they not available to work at the benefit fraud office? All sorts of excuses were made to explain why the work of the benefit fraud office should not be outsourced. I was a little disappointed that the hon. Member for Birkenhead did not comment on those issues. We all look forward to the Government's response to the Select Committee report and perhaps an opportunity for the Select Committee to look into matters further, including, no doubt, outsourcing in the DSS. I was pleased to hear during my meeting with the Secretary of State that there was every possibility of certain work being outsourced,
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such as the collection of debts. I should like to stress that I wish to monitor the progress made by the Secretary of State in outsourcing that work at least.4.56 pm
Mr. David Chidgey (Eastleigh): The recommendations in the report of the Select Committee on Social Security are welcome, but there is a belief that they do not go far enough, as the hon. Member for Birkenhead (Mr. Field) said. More needs to be done to address what people see as a lack of balance in the operation of the Child Support Act 1991. Recognition in the report that the performance targets should be based on operational factors of the agency and not on Treasury demands is a major step forward, especially as hon. Members will know that in 1993-94, only some 6 per cent. of those who received maintenance awards were not on benefit. Because of the policy of back-to-back withdrawal of benefit on receipt of maintenance, the CSA is being seen by many as not so much a Child Support Agency as a Chancellor support agency, which is clearly not what was intended.
The report highlights the need for the CSA to meet performance targets for customer service. That is vital. We need to establish performance targets to construct minimum acceptable periods of delay in response to people's queries. We need to set targets for customer satisfaction, and, most important of all, targets must be set for the management of agency resources. I agree entirely with those comments in the report, especially as recent revelations have shown that in 86 per cent. of the cases handled by the CSA, it has either miscalculated the maintenance liability or misinterpreted the legal application of the Act. That is an appalling record for whatever reason and no organisation should continue on that basis. There must be a major restructuring programme for the CSA so that it can start to deliver an acceptable level of service. I am sure that many hon. Members will know from their advice centres of the effect of the current inefficiency on their constituents. We have already heard in the debate about the sort of problems with which constituents are faced. Let us lay that out. Attempts to clarify CSA demands are often met with engaged telephone lines or recorded messages. For those on low incomes who do not have access to their own telephone and have to use public payphones, making such phone calls is a costly and difficult burden. Letters to the agency meet inordinately long delays before they receive a reply and sometimes they receive no reply at all.
Because of inadequate liaison between the maintenance assessment and the debt collecting sections, parents receive differing and often contradictory figures and demands. To make matters worse, the CSA does not store historic computer-generated detailed assessment letters; only the latest assessments are kept on the computer files. That makes it almost impossible for a parent to pursue a query or to challenge a decision while an assessment is being developed. In my discussions with CSA staff--I am sure that many other hon. Members have engaged in similar discussions--I have been given to understand that when the agency was established it was assumed that staff would be able to assess maintenance payments, and collect them from non-custodial parents, purely by means
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of paper communication. Naturally, the first reaction of a parent faced with a large and often unexpected assessment is to want to question and to verify it. It is beyond belief that a state agency should be expected to demand major slices of citizens'income--deducted at source if necessary--without providing a facility for those citizens to meet the staff or at least talk to them on the telephone. If the CSA wants to improve its performance, it must restructure its organisation to allow parents to discuss, query and in some cases challenge decisions in person. The Select Committee missed an opportunity in that regard.
Many of the changes that the report recommends are no more than trifling. If more is not done, the Act will have difficulty surviving in its present form. For example, the report fails to address the pressures placed on non- custodial parents to give up work because of the financial burden of maintenance payments. The refusal to consider travel-to-work costs is one of the factors that force many fathers to give up work and live on benefits. No one welcomes that development, but I hear of it from my constituents week after week. Those costs must be allowed: if a person cannot work, that person cannot pay maintenance for his or her children.
The Select Committee's recommended concession is no more than an exercise in pedantry. The costs of a car will not be allowed if the car is to be used privately as well. Again, if a non-custodial parent can travel to work only by car, because--as is the case in so many parts of the country--the public transport system is inadequate, that parent will need to buy a car, and such a purchase will invariably be made by means of a loan. That loan should be recognised in the maintenance assessment.
In many instances, divorcing fathers have taken out loans and mortgages to provide funds as part of a settlement. They have a legal obligation to pay their debts.
Mr. Duncan: Recommendation (xx) in the Select Committee report is simple and explicit. It states:
"We recommend that travel to work costs are included in the calculation of exempt income."
Where the hon. Gentleman gets his notions about which costs may or may not be included is beyond me.
Mr. Chidgey: I thank the hon. Gentleman for his information, but I am content with the accuracy of the information that I possess. It is not acceptable for such obligations to be ignored; legally incurred and entirely necessary expenses such as mortgages need to be considered at the outset when the maintenance level is devised. That does not happen at present.
Mr. Jenkin: Will the hon. Gentleman give way?
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