INTRODUCTION
AND SUMMARY
OF CONCLUSIONS
AND RECOMMENDATIONS
1. The Child Support Agency (the Agency) was
established as an Executive Agency of the Department of Social
Security (the Department) on 5 April 1993 to implement the Child
Support Act 1991 and to operate a new system of child maintenance.
2. In 1995, the Committee of Public Accounts
examined the setting up of the Agency and the first two years
of their operation.[1]
The Committee's examination was based on a report and a subsequent
memorandum from the Comptroller and Auditor General on the 1993-94
Appropriation Accounts. The Committee were gravely disturbed
that at least 40 per cent of the child maintenance assessments
made in 199394 contained errors; severely criticised the
Department and the Agency for allowing that state of affairs to
arise; and made a number of recommendations aimed at improving
the accuracy and timeliness of the Agency's work, and their management
of maintenance debt.
3. On the basis of a report by the Comptroller
and Auditor General[2]
on the Agency's 1996-97 Client Funds Account, we examined efforts
made by the Agency to improve the accuracy of assessment work
since 1995,1 the speed with which they process work,
and their management of outstanding debt. We also looked at the
challenges facing the Agency over the next few years and their
plans to further improve the quality of their service.
4. We recognise that they have a difficult
task, that the legislation they administer is extremely complex,
and that they have improved their performance since 1995. But,
three main points emerge from our examination:
Some 39 per cent of payments made by absent parents
are for wrong amounts. The Agency have backlogs of 572,000
cases waiting to be assessed, over half of which have been outstanding
for more than a year. Outstanding debt by absent parents totals
over £1,127 million, of which £869 million may not
be collectable. And 85 per cent of debt balances contain errors.
The Agency do not intend to examine all the cases
they have dealt with and put the errors right. In the Chief Executive's
words, "We have not got the scale of resources to spare
for this particular task even though we recognise it is an important
one and one where, all things being equal, we would certainly
wish to take remedial action".
We think it is important that Parliament and the
public should know that the Agency have taken the decision to
let hundreds of thousands of incorrect assessments hang fire until
individual cases rise to the surface of attention or come up for
periodic review. Thus many thousands of people will suffer hardship
and distress at a difficult time in their lives and the Agency
expect them to accept this unless and until their cases come up
for review.
This is unacceptable. Individual citizens should
not suffer because of the mistakes of public bodies.
New Cases
The Agency's current accuracy target for new cases
is 85%. This means that 1 in 6-almost 80,000 in 1997-98 - of
the new people whose affairs were and will be examined by the
Agency are likely to have a wrong assessment. This is an unacceptable
standard of service in a modern society. We expect service providers
to do better than this; and the Department of Social Security
and the Child Support Agency should lead the way with an accuracy
target of 100%.
Resources
The Agency estimate that they face a 60% growth in
their cases by March 2000 at the same time as their resources
in terms of the core budget will be cut by ten per cent in the
next financial year and thereafter are expected to steady at that
level, excluding any allowance for inflationary elements. The
Chief Executive said "I think we are reasonably confident
that we can achieve what is being set for us". But on the
record so far, we do not believe that they can succeed.
5. We think that the problems should be openly
faced and properly tackled. Unless firm action is taken, the
work of the Child Support Agency will continue to bring unnecessary
hardship and suffering to thousands of our fellow citizens. We
therefore urge the Department and the Agency to look long and
hard at the complexity built into the scheme, and at ways of clearing
away the errors and irrecoverable debt of the past, and placing
the Agency's forward operations onto a firm footing. We also
urge the Department to set a firm timetable for implementing the
recommendations in this report, and to report this timetable back
to us.
6. Our more specific conclusions and recommendations
which underpin the general views above are as follows:
On the accuracy of the agency's assessment
work
(i) We note the steps taken by the Agency
over the past two years to improve the accuracy of their current
assessment work, and we welcome the Agency's recognition that
getting things right first time is the best way to avoid the burden,
costs and inefficiencies of reworking and correcting cases, and
reducing the effort needed to deal with the problems that have
arisen in the past. However, we find it unacceptable that the
Agency's current accuracy target of 85 per cent means that one
in six new assessments, or almost 80,000 new cases in 199798
are likely to be wrong. We urge the Department to set the Agency
more demanding targets for accuracy and to move more quickly towards
getting all assessments right first time (paragraph 19).
(ii) We are also deeply concerned at
the number of errors in previous assessments which continue to
impact on the accuracy of receipts and outstanding debt-two out
of five receipts in 1996-97 were incorrect and five out of six
debt balances at 31 March 1997 were wrong, many by more than £1,000.
These continuing errors cause hardship and distress to people
at a difficult time in their lives, and we are not convinced that
the Agency's plan to rely on the process of periodic reviews will
properly tackle this issue (paragraph 20).
(iii) Despite the resource implications,
we recommend that the Department and the Agency explore ways of
tackling this legacy of error quickly and comprehensively, in
order to clear away the inefficiency and ineffectiveness caused
by the past and enable the Agency to offer an accurate and responsive
service in future. One option might be to use a dedicated task
force funded on a "spend to save" basis (paragraph 21).
(iv) We note the steps taken by the
Agency, including the new Departures Scheme, to address inconsistencies
between declared income and actual lifestyles of some absent
parents, especially those who are self-employed. But we remain
concerned that many of those parents still manage to evade paying
appropriate amounts of maintenance by understating their true
income. Accordingly, we recommend that the Agency seek ways
of identifying inconsistencies, for example by monitoring disparities
in amounts of maintenance assessed between employed and selfemployed
absent parents, and look at ways of obtaining more reliable explanations
for the differences (paragraph 22).
(v) We acknowledge that the regulations
governing maintenance assessments are complex and reflect Parliament's
intention to ensure that decisions are equitable and consistent.
However, the very serious problems the Agency continue to experience
in implementing these regulations and the high levels of error
inherent in that process, raise serious questions about whether
the regulations achieve fairness and equity in practice. We therefore
urge the Department to look hard at ways of simplifying the system
(paragraph 23).
On the speed with which the agency process their
work
( vi) We are appalled at the continuing delays
in processing all aspects of maintenance assessment work and at
the considerable backlogs that have built up. Despite the progress
the Agency have now made, at the end of March 1997 they had 407,000
cases awaiting initial assessments, of which more than half had
been outstanding for over a year, and there were some 165,000
cases which had been deferred in December 1994 and were still
outstanding. We are seriously concerned at the financial impact
of these delays and the hardship caused to children and parents,
and we find it unacceptable that these backlogs will not be cleared
until March 1999 (paragraph 35).
(vii) We also find it unacceptable
that even in the normal course of business the Agency should be
working to a target of processing both initial assessments and
changes in circumstances within 26 weeks. In view of the impacts
of not processing this work promptly, particularly the more straightforward
changes of circumstances, we recommend that the Department set
the Agency more demanding clearance targets for each type of assessment
activity (paragraph 36).
(viii) We note that the Agency have
a statutory duty to undertake periodic reviews of assessments,
and we have already noted the importance the Agency place on these
reviews in tackling the serious errors in maintenance assessments.
We are therefore extremely disappointed that over 60,000 of these
reviews were outstanding at 31 March 1997, including some that
date back to assessments made in 1993. We expect the Agency to
clear this backlog quickly and ensure that they meet their statutory
obligations, in the interests of equity, by providing a quality
and timely service to their customers (paragraph 37).
(ix) We accept that in deciding how quickly to
pay over to parents with care the sums collected from absent parents,
the Agency have to balance the needs of parents and children against
potential loss to the Exchequer. However, we are sceptical whether
the 10 working day target is reasonable, and look to the Agency
to consider, in conjunction with the banks and other institutions
involved how payments can be speeded up in the interests of those
in need (paragraph 38).
On the agency's management of debt
(x) We are disturbed that the Agency's level
of outstanding debt now stands at over £1 billion, and
that the Agency expect no more than £258 million to be recovered.
Despite the improvements the Agency have made in their use of
interim maintenance assessments and in debt recovery, this suggests
to us that the arrangements need a more radical overhaul. We
note that a significant proportion of uncollectible debt relates
to interim maintenance assessments made in the Agency's first
two years. We urge the Department and the Agency to examine the
scope for eliminating a significant amount of this debt, since
it is unlikely ever to be collected, may divert resources from
the addressing the legacy of error, could delay the making of
maintenance assessments, and may distort the Agency's performance.
Where debt remains, we expect the Department to set the Agency
challenging targets for recovering the sums due (paragraph 49).
(xi) We note that delays by the Agency
in processing maintenance assessments are likely to cost over
£1.2 million in compensation over three years and that expenditure
is increasing. We expect the Agency to minimise the costs to
the Exchequer of the deferred debt scheme by avoiding delays in
making assessments (paragraph 50).
On the Agency's plans for the future
(xii) We note the immense task now facing
the Agency in dealing with the legacy of error, backlogs of work
and accumulated debt from the past, an increasing workload and
the need for further efficiency savings. We question whether they
can succeed without more radical action, including for example,
balancing the need for greater sensitivity to individual circumstances
with the need for simplification of the very complex regulations
and the injection of one-off resources (paragraph 58).
(xiii) We are not convinced that the Agency's
strategy of introducing a new computer system is sensible until
the high levels of error in the underlying information are removed.
We therefore look to the Agency to reassess their plans to ensure
that they take the opportunity to co-ordinate improvements in
data accuracy with the implementation of new systems (paragraph
59).
(xiv) We also look to the Agency, within
the confines of the Child Support Acts, 1991 and 1995, and in
tackling the challenges they face, to take full account of the
wider impact on their clients and other stakeholders (paragraph
60).
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