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Mr. William O'Brien: I appreciate the information that the Minister has given. The ombudsman has awarded compensation in more than 80 cases. Will that compensation come out of the savings, or is there another fund from which compensation is paid?
Mr. Mitchell: I will come to the issues that the hon. Gentleman raised about the ombudsman. I overhauled the system of compensation at the end of last year, and we now have a clearly established new system that relates specifically to the CSA and the cases that the hon. Gentleman mentioned in his speech.
As well as collecting maintenance that offsets benefit expenditure, the agency discourages abuse of the benefits system. In 1994-95, more than 60,000 parents with care withdrew their benefit claims once the agency began taking action. Overall since the agency started its operation, it is estimated that more than £644 million has been saved by that means alone.
Other tangible improvements in the performance of the CSA continue. The agency's increased emphasis on maintenance collection entails a strong and increasingly effective commitment to enforcement action when maintenance is not paid. As for payments of maintenance to parents with care, the improvements are clear. Some 98 per cent. of payments were passed on within 10 working days. In cases with difficulties in ensuring regular payments, deductions from earnings orders are now implemented quickly in all appropriate cases. More than 47,000 were issued between April 1996 and the end of January 1997.
I wish to record my appreciation, and that of all the Ministers in the Department of Social Security, to the Social Security Select Committee for the advice that it has offered on improvements to child support. The Committee has paid close attention to the policy and the operation of the scheme since its introduction, and has produced five helpful reports on the subject since April 1993. I am grateful to the Committee for its constant support for a properly functioning child support system and its determination to identify impediments to the effective operation of the agency. Both the hon. Gentlemen who contributed were somewhat grudging in their support for the Social Security Select Committee.
Mr. Skinner:
It was worse than that.
Mr. Mitchell:
I was being generous. The Select Committee is an all-party Committee, and we value what it says. I fully agree with the Committee's report, which was published yesterday and which states:
Many Members of the House, from both sides, have shown great patience and support during the agency's most difficult periods, when inaccuracies and mistakes tried the patience of many hon. Members and their constituents. While inaccuracies have yet to be eliminated, the improvement is there for all to see, as is our commitment further to improve the service for the agency's clients until it is fully acceptable. The emphasis on the continuing need for further improvement in service is clear from the agency's targets for the next financial year, which we announced on Tuesday.
The agency will be required to collect and arrange £500 million in maintenance, to achieve an accuracy level of 85 per cent. over the whole year and to clear at least 525,000 maintenance assessments while bearing down on work outstanding.
For all those changes and improvements, the House owes a particular debt of gratitude to Ann Chant, the chief executive, who will depart shortly to work on Business in the Community. She has done a superb job in turning around the fortunes of the Child Support Agency. I am particularly grateful to her for agreeing to stay on as chief executive for longer than she intended originally. She is an outstanding civil servant, and deserves all the praise that has rightly been heaped upon her by the Social Security Select Committee, Ministers and many others who have worked with her during her time as chief executive.
I turn now to several policy considerations. I appreciate the concern that has been expressed about the complexity of the system: a great deal of information is required in order to assess child maintenance. I acknowledge the fact that simplification of the system has been a key factor in improving the process and getting maintenance flowing. Progress has been made in resolving the difficulties experienced in establishing housing costs and wages. If the agency can continue to simplify and streamline its procedures, and can get it right, the way forward will be easier. Policy changes have also played their part. To this end, we have always made it clear that we shall listen to--and, where possible, act upon--any constructive suggestions for change that come from both sides of the House.
While I have had the honour of being responsible for the agency, I have made some 140 changes to the way in which it operates. The Child Support Act 1995 and the
regulations introduced in April 1995 added to the process of positive change. Those changes were based, in part, on suggestions by the Social Security Select Committee. However, they went further in some respects. The Act was supported by both sides of the House with good reason: it was a careful and prudent balancing act. The Government took into account the interests of the children, their parents and the taxpayer. The interests of the children were central to the proposals for change that were accepted by the House.
The Government's intention was simple: remain true to the key principles behind child support, but learn the lessons of experience. As a result, four main changes were introduced in 1995 which built upon earlier improvements. First, we introduced the 30 per cent. rule. That meant that no absent parent would be assessed under the formula to pay more than 30 per cent. of his or her net income in current maintenance payments. Even absent parents whose payments are in arrears would usually pay no more than 33 per cent. Secondly, we introduced a degree of flexibility into the formula, and I shall return to that point later.
Thirdly, the Government recognised that capital or property settlements made before child support was introduced might have been intended to offset regular child maintenance payments. That was not always properly reflected in the child support assessment. We introduced regulations to make allowance for a broad recognition of those property and capital settlements, and made provisions in the Act for more detailed allowances. On the same basis--I refer directly to the first case that the hon. Member for Normanton raised--we also recognised high travel-to-work costs of the minority of parents who travel long distances to work.
It had become clear that the agency experienced particular problems in collecting maintenance from self-employed absent parents. That is not a new problem: the courts experienced similar difficulties. Some absent parents have sought to exploit that difficulty in a bid to sidestep their legitimate responsibilities towards their children. I am pleased to say that we were able to make important changes that were designed specifically to address problems in that area. We introduced a new power that allows the agency to enter liability orders in the county court register of debt judgments. The threat of such an entry will be an incentive to secure absent parents' compliance--especially in the case of the self-employed, who generally rely on credit to conduct their business. I am pleased to tell the House that those powers are being used in appropriate cases. On Monday, I visited the Hastings Child Support Agency centre, and staff told me that results for the latest quarter show that a substantial proportion of those who are warned that they may face action subsequently comply.
As I said earlier, a crucial part of the 1995 improvements package was the introduction of a degree of flexibility into the maintenance assessment formula. The Government remain committed to using a formula to determine maintenance. A formula is successful and fair in the majority of cases, and it provides the best means of establishing a fair and consistent maintenance liability. However, experience has shown that a small proportion of cases were not being dealt with fairly by a formula. That is why I have introduced some discretion to "depart"
from the basic formula in special circumstances. The change will allow flexibility where fairness demands it. It was successfully piloted in the summer of 1996, and introduced nationally in December. Through the introduction of the departures system, we have addressed one of the biggest criticisms of the child support system. In doing so, we have gone rather further than the changes suggested by the Social Security Select Committee in its report.
Parents with care and absent parents can apply for a departure from the formula assessment. For example, an absent parent may face genuine hardship if a maintenance assessment fails adequately to reflect special expenses. Such costs include those incurred in maintaining contact with children or in meeting the needs of step-children in a current family. The discretion to "depart" from the formula will help a small but important number of cases in which people might otherwise face hardship. Conversely, a parent with care may have grounds to consider the maintenance assessment to be unrealistically low. It may be that an absent parent appears to be living a life style that is simply not commensurate with his declared income. In that case, the parent with care can apply for a departure order.
More recently, we have tackled the problem of parents with care who claim benefits but who are unwilling to permit action to recover maintenance from the absent parent. In the light of clear evidence that such reluctance can mean that benefit is being claimed fraudulently, we have increased the level and duration of the benefit penalty that applies when the parent with care has no genuine reason for her failure to co-operate. As well as being an effective way of tackling fraud, this underpins the principle that both parents must honour responsibilities for their children whenever they can afford to do so.
Those improvements are reflected in a substantial fall in the amount of correspondence that I receive from hon. Members: down by one third in 1996 compared with 1995. While there has been a modest fall in correspondence about individual cases, complaints about the policy have fallen dramatically by more than 50 per cent: from 1,520 in 1995 to only 723 in 1996. Those absent parent groups who campaigned so loudly against the child support scheme can no longer claim legitimate grievance. It is time for the small minority of outside groups who oppose the agency to acknowledge that times have changed. I hope that all hon. Members will acknowledge and reinforce the message that absent parents have a responsibility to support their children when they can afford to do so.
I am afraid that a small number of men continue to believe that they should not be responsible for supporting their children and can shuffle off their liability on to their neighbour: the taxpayer. Such people cloak in moral indignation what is a simple disinclination to pay up for their kids. Increasingly, society rightly regards such behaviour with deep distaste and contempt. I am sure that the process will continue to grow. Children have a right to be supported by their own parents whenever and wherever that can occur. While the House cannot legislate for the affection and concern that all parents owe their children, it can legislate--and has done so--for proper and fair levels of child support.
"the Committee was very encouraged that after a poor start, the Child Support Agency was showing a much more acceptable level of service . . . The figures . . . indicate that in the past two years there has been a substantial improvement in the Agency's performance. Whereas the Agency was heading for disaster in 1993/94, there is now no danger that this could occur. We are pleased that the Child Support Agency is on a sure footing and expect that the gains in performance will continue."
That was the judgment of the all-party Social Security Select Committee which underlines the bipartisan approach to child support that now exists between the Government and the official Opposition. I agree with the Select Committee's comments, and I pay tribute to its consistency.
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