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Select Committee on Social Security Appendices to the Minutes of Evidence


APPENDIX 8


INTEGRATED CHILD CREDIT AND CHILD BENEFIT

Letter to the Chairman of the Committee from HM Treasury (ICC 17)

  Thank you for your letters of 16 January on the Integrated Child Credit (ICC) and Child Benefit. We thought that, given the overlap between the issues you raised, a joint response would be the most useful.

  As the Secretary of State for Social Security said in July, it is logical that Child Benefit administration should sit alongside Integrated Child Credit. This would help improve delivery and reduce bureaucracy for families with children. However, there are issues around capacity and timing which impact on the extent to which we might want to move Child Benefit administration and when it would be possible to do so. The Government will make an announcement in due course.

  Your letter also raises the issue of how changes to the system of support for children will be accommodated within the funding allocated to Inland Revenue and DSS. The Spending Review provided resources for Inland Revenue to continue its programme of modernising its IT systems, part of which involves the changes needed to prepare for the new ICC. However, as you will appreciate, breaking these down into separate and discrete streams is difficult, especially when some of the key policy parameters underlying the new tax credits are not yet fully determined.

  As you are aware, the Spending Review created a Welfare Modernisation Fund to start modernising DSS IT systems. If we are to ensure that ICC and Child Benefit work together, there must be appropriate IT support for the Child Benefit interface. However, only when final decisions have been taken on the best way to deliver Child Benefit alongside ICC, will it be possible to review the overall IT and funding requirements. DSS and Inland Revenue teams are working closely together on this work and will continue to do so to ensure the eventual solution secures value for money.

Dawn Primarolo

Paymaster General

Rt Hon Baroness Hollis

Parliamentary Under Secretary of State

5 March 2001

Letter to Chancellor of the Exchequer from the Chairman of the Committee

  The Committee is currently holding an inquiry into the proposals for an Integrated Child Credit. Following the useful evidence session in December with officials from the Treasury and Inland Revenue, we have a number of additional questions concerning the interface between Integrated Child Credit and Child Benefit, which I would be grateful for your help in answering.

  The gateway to ICC through Child Benefit is clearly of crucial importance and we note that a shared database between Inland Revenue and the Child Benefit Centre is envisaged.

  However we are unclear what will be the relationship between the Inland Revenue and the Child Benefit Centre, once ICC has been introduced. We were advised by Treasury officials that no final decision had yet been taken as to whether the Child Benefit Centre will be transferred over to the Inland Revenue, as part of the integration of Government support for children. Can you advise us when you expect a decision to be made on this important issue?

  A second area of interest is the development of modern computer systems to deal with ICC. The Committee would welcome details of the funds allocated by the Inland Revenue for the development of IT systems to support the introduction of ICC in 2003, and to what extent these funds will also cover the modernisation of systems at the Child Benefit Centre to allow proper integration between ICC and Child Benefit.

  I have written in similar terms to Alistair Darling, seeking information on the proportion of funds within the ring-fenced Welfare Modernisation Fund intended for modernising social security delivery which will go towards updating or replacing the computer equipment at the Child Benefit Centre in preparation for Integrated Child Credit.

  I am grateful for your help in this matter.

Archy Kirkwood MP

Chairman of the Social Security Committee

16 January 2001

Letter to the Secretary of State, Department of Social Security from the Chairman of the Committee

  The Committee held a very useful evidence session with officials from your Department, the Inland Revenue and Treasury in December. One area of discussion was the interface between Integrated Child Credit and Child Benefit. There are a few questions arising from the discussion, which we would like to pursue.

  The gateway to ICC through Child Benefit is clearly very important and we note that a shared database between Inland Revenue and the Child Benefit Centre is envisaged.

  When we met you in July you advised us very clearly that Child Benefit would be moved over to the Inland Revenue as part of the ICC changes. In answer to the question "do you see Child Benefit moving over to the Inland Revenue", you replied "Yes. If you want to integrate it you cannot have it run by two different Departments" (see Minutes of Evidence, 12 July 2000, Question 15). Yet, when we met Treasury officials in December we were told "it is one possible way forward" and that no final decisions had yet been taken. Can you help clarify the situation? It certainly appears logical that Child Benefit administration should sit alongside that for Integrated Child Credit.

  You also drew attention to the fact that the computer equipment at the Child Benefit Centre was 21 years old. We were therefore interested in the question of modernisation of the IT systems dealing with Child Benefit, as part of the preparations for the introduction of ICC in 2003.

  Please can you advise on what plans exist to replace the antiquated computer systems which handle Child Benefit with more modern IT to take account of the introduction of ICC, and the need for better integration with Inland Revenue systems?

  It would be helpful to know what proportion of the funds within the ring-fenced Welfare Modernisation Fund intended for modernising social security delivery will go towards replacing the computer systems at the Child Benefit Centre as part of the preparations for ICC.

  Also, to what extent will the funds within the Welfare Modernisation Fund intended for modernising social security delivery take account of the greater role being given to the Inland Revenue in the delivery of benefits, including the possible future administration of Child Benefit?

  I have written in similar terms to the Chancellor of the Exchequer, seeking information on the funds allocated for the development of IT within the Inland Revenue, and the proportion which will go towards the introduction of Integrated Child Credit and the (possible) absorption of the Child Benefit Centre into the Revenue.

  I am grateful for your help in this matter.

Archy Kirkwood MP

Chairman of the Social Security Committee

16 January 2001




 
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